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News and Notes
As predicted, it was certainly an unusual Black Friday weekend. Retailers opened as early as Thanksgiving or right at the stroke of midnight with doorbuster savings that expired at 3a.m.! These enticements lured in lots of foot traffic – over a quarter of billion people were shopping. But the big question remains, “can it sustain?”
Our forecast correctly predicted frugality. Early reports are showing that while consumers were out in droves and spending, specifically in consumer electronics, they were looking for deals and spending primarily only on discounted deals. Unfortunately, those deals may be difficult to sustain over the next month and no one knows for sure what the “deal threshold” is for consumers (the point at which a consumer thinks it’s a deal).
Our forecast also talked about the connected consumer. Online sales have already reported gains from last year and online retailers are expecting big results for Cyber Monday. Expect to see deals online more consistently throughout the holidays whereas deals in-store will be shorter lived or more sporadic.
Even with all the holiday weekend activity, most industry experts have not adjusted their forecast for holidays 2011. Meaning, they are still forecasting a moderate increase from last year (1% to 4% are ranges I’ve seen). If that holds true, with the success of this past weekend, the next three weeks are going to slow until we get to the final week before Christmas where we will more than likely see plenty of last minute savings deals. If it turns out to be a slow next few weeks, this could also be an indication that consumers may have completed their shopping earlier this year rather than waiting for last minute deals, indicating that last minute deals may not have the same impact as the deals this past weekend.
The next few weeks will be interesting. It’s definitely a shopper’s holiday season. Therefore, we stand by our forecast; this will be a tough holiday for manufacturers. At this point, it’s all about the deal. The frugal customer is not looking to spend more than they have to and if a manufacturer or retailer doesn’t offer a compelling deal, they could be left in the cold.
