Retailers are holding their breath as they wait for Black Friday, the official start of the holiday season.
And while some analysts are betting on Internet sales and gift cards to save Christmas, others are bringing tidings of lower sales across the board.
Analysts are projecting that sales on the day after Thanksgiving will grow only 1.2 percent, down from 8.3 percent last year. Black Friday is the day when many retailers slash prices and open doors in the early dawn hours in an attempt to entice customers.
“While it is good to see growth, unfortunately, this is down significantly from last year,” said Ted Vaughan, a partner in retail and consumer product practice at BDO Seidman. “While seemingly dismal this year, it is important to remember there are some bright spots on the horizon. There is still enormous growth potential in Internet sales, which remains a fairly new phenomenon. Further, gift cards will be popular this year, because they allow the end user to decide on the gift based on their personal needs.”
The findings are from the BDO Siedman Retail Compass Survey, which examined the opinions of 100 chief marketing officers at leading U.S. retailers, including 13 percent of the top 100 based on annual sales revenue. The survey was conducted in October.
The results show that the majority of the CMOs — 68 percent — anticipate flat Black Friday sales. Last year, the group projected sales on Black Friday to account for 15.1 percent of total holiday sales.
But Colorado Springs hasn’t yet felt the effects of the sagging economy — at least not fully, said Tom Gruen, professor of marketing at the University of Colorado at Colorado Springs.
“I haven’t noticed that much change in behavior,” he said. “So it just hasn’t trickled down yet. And people want a nice celebration — so I think they’re going to get out there and shop.”
The National Retail Federation says the majority of customers will include personal and inexpensive items such as DVDs, CDs and books. Unlike previous years, 72 percent of shoppers have completed less than 10 percent of their shopping.
“Although many companies have already been featuring substantial sales and discounts, retailers might still have a few tricks up their sleeves to attract and entice holiday shoppers,” Mullin said.
Holiday sales growth overall is expected to be down, according to the CMOs’ responses — their companies expect that sales will decrease this year by 2.7 percent.
But the retailers agree with the NRF findings that consumer electronics will be the strongest category this year.
NRF found that 55.6 percent of the people will buy CDS, DVDs and video games. In addition, 30 percent will buy new games systems, Blu-ray DVD players and other electronic items.
Anxious retailers aren’t waiting for Black Friday to ring in the holiday season. Many stores are slashing prices as early as this weekend, trying to entice bargain-conscious shoppers to spend money now.
That’s because the big day comes later this year than last year — which means fewer shopping days until Christmas.
Big box stores like Wal-Mart have been running early morning specials since Nov. 8, with many electronic devices for sale. Best Buy marked down laptops and K-Mart’s Flat screen televisions also are on sale.
“Retailers haven’t really waited to offer the deals because of the shorter shopping season. Gruen said. “But people have been trained to get up early the day after Thanksgiving, and those who do are going to see fabulous bargains.”
Retailers would be wise to offer a wide variety of times for sale, as people are going to continue to shop at the same store, even after early-morning specials are gone. And they should be careful about opening too early — J.C. Penny’s plan to open at 4 a.m. Friday morning could backfire.
“It’s psychological,” Gruen said. “People might get up at 5 a.m. to go shopping, but 4? That’s too early.”
And there’s no way for small, local business to compete — at least in terms of mass market advertising. But through e-mail and social networking, small, local businesses can get the word out, he said.
“I’d suggest using Twitter,” he said. “That way they can let people who follow them know what items they have for sale.”
Small businesses should always keep an e-mail list — alerting customers about local deals is one way to compete with big box stores that have large advertising budget.
“Overall, I don’t think this season will be as dismal locally as it will be nationwide,” Gruen said. “But people are going to look for bargains, and shop carefully.”