Holiday shopping primer
Audrey Guskey has been an associate professor of marketing at Duquesne University for more than two decades and is considered one of the nation’s leading consumer experts. She started her career in retailing at Gimbels department store and was on Gimbels Teen Board while in high school.
We talked by phone Monday about what merchants and consumers can expect this holiday shopping season.
Q: Wal-Mart and Sears were open Thanksgiving Day. What does that tell us about the holiday shopping season?
A: Well, this is new for Sears. Kmart has been open in the past on Thanksgiving but their hours were limited, so this is the first time that Sears has done that.
I think it’s basically a couple of things. The economy, of course, isn’t strong and so retailers are doing everything they possibly can to get us spending more money this year.
But also we’ve had that Black Friday creep, more so this year than ever. And so what’s happening is … there’s been a lot of what they’ve been calling sort of hijacking that title, Black Friday, and using that title even before, well before Thanksgiving.
I think this is just one way to get people spending more and extending the holiday season.
Q: Wal-Mart said it would match competitors’ prices on Black Friday. Is that something new in the fight for customers?
A: I’m not sure if it’s new for them, but I know a lot of stores have been matching competitors’ prices. My advice to people who are going out shopping is to take ads that you have from some of the different stores, and if you can prove that a particular store has it cheaper than Wal-Mart would, then they would match that price.
It will be interesting. The basic premise is to get people into the store and buy everything in the Wal-Mart as compared to going around from store to store and trying to fight the crowds and get the best prices in different stores. It would save shoppers some time and money in the long run.
Q: In some of the industry projections that I’ve seen, the sales gains vary, but it looks like all the trade groups are saying that they are expecting customers to spend more this year. Could this be a good year for retailers?
A: I don’t know if I would call it a good year, but it won’t be a bad year. In ’08 sales decreased by 4 percent, which is absolutely unheard of. Last year they went up by four-tenths of a percent.
This year the predictions are about 2 percent, which would be fair. That would be average. Something average over the past decade or so that we’ve had, 2.5 percent would be OK. It wouldn’t be fabulous, but at least shoppers would be spending more than they have in the past couple of years.
Q: Are the stores carrying more inventory this year?
A: I don’t think they are. They may be carrying a little bit more than they did last year, but that’s not saying much because last year things were really, really tight. The previous year I think is when retailers got burned because they did not expect sales to be as bad as they were, and they were horrendous and retailers got stuck with a ton of merchandise and had to really discount it 70 (percent), 80 percent.
I think retailers are cautious. They have maybe a bit more than they had last year because they are a little bit more optimistic, but I don’t think there’s lots of inventory, as we have seen in previous years.
My advice to shoppers is get out there maybe a bit earlier than they anticipated in order to get what they want, because it might be picked over at a certain point.
Q: Will online sales increase this year?
A: Online sales should be increasing significantly, yeah, because there’s a lot of bargains. Wal-Mart, in fact, is one of the stores that’s offering free shipping if you shop their online store. So there’s going to be a lot of perks attached to online shopping.
It’s easy, convenient. You could really do price comparisons, and for a lot of gifts it works perfect for everybody. So yeah, online shopping is becoming more and more significant a player in the Christmas season.
Q: A double-digit increase for online sales?
A: That’s a good question. I don’t know. In the past couple of years it has been double digit. I would probably guess around 7 percent, which will still be pretty good.
Q: Cash or plastic?
A: You know, a lot of people, even if they are using plastic, are paying it off within the time period. So I think shoppers are more conservative. They are trying to live within their means. They are not trying to overdo it this holiday season.
They’ve learned that they don’t want, come January and February, to have tremendous amounts of bills that they have to deal with, and so I think shoppers finally get it and they are being cautious.
I think that’s what happened a couple of years ago. We were spending so much money that people really got in trouble, and you just don’t want to get in trouble with a credit card at this point because interest rates are so high.
Q: Given the overall state of the economy, will people spend more than the magic number of $800 per household?
A: People are still concerned about job security. The economy isn’t really strong. It’s been a really roller-coaster year. We’ve had some really good times where consumers are spending. October sales went up … partly due to automobile sales.
We had back-to-school season increases of about 2 (percent), 2.5 percent. That’s always a good indicator of how Christmas sales are going to be. I think people aren’t going to overdo it; they are going to spend a little bit more.
Q: All I see on TV commercials are electronics. Is that the big thing?
A: Very hot, yeah, very hot. Smartphones are supposed to be big and the tablets are supposed to be really big, too.
I think a lot of the Black Friday doorbusters are going to be the electronics … at really discounted prices.
The sales will continue throughout the holiday season, but I think … electronics are going to be the must-have items this holiday season.