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Black Midnight 2011

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New hours, new offers and a new approach as retailers brace for holiday season

BANGOR – With the holidays fast approaching, retailers are gearing up for their annual pilgrimage into what many are hoping will be a lucrative start to this year’s holiday shopping season. For many retailers, this year also means a few changes that will forever alter the shopping landscape where extended hours and online strategies will make or break this year’s bottom line.

According to the National Retail Federation, the nation’s largest trade group that tracks data from the U.S. Department of Commerce, holiday shopping beginning on Black Friday, Nov. 25, is estimated to increase 2.8 percent this year to just over $465 billion. That comes on the heels of a healthy 5.2 percent increase in 2010, which surprised many analysts who predicted sales would fall below the 10-year average of 2.6 percent.

“Retailers are optimistic that a combination of strong promotions and lean inventory levels will help them address consumer caution this holiday season,” said Matthew Shay, NRF president and CEO. “While businesses remain concerned over the viability of the economic recovery, there is no doubt that the retail industry is in a better position this year to handle consumer uncertainty than it was in 2008 and 2009.”

That uncertainty, including higher fuel prices, an unrelenting unemployment rate that peaked at 10.1 percent in October last year and still remains above nine percent today, and a housing market where prices and demand still lag pre-2008 levels and has many homeowners underwater, will only temper a season that will be hard matched to beat last year’s results.

“Just when you think the U.S. economy is turning around, another factor comes into play that changes the game,” said Jack Kleinhenz, the NRF’s chief economist. “Persistently high unemployment, an erratic stock market, modest income growth and rising consumer prices are all combining to impact spending this holiday season. How Americans will react to shaky economic data is the question, but the good news for retailers is that shoppers have not yet thrown in the towel.”

Keep the coffee coming

In a major departure from years past, when retailers typically took the Thanksgiving Day holiday off and began preparations for 4 or 5 a.m. Black Friday openings and shoppers were able to digest the day’s meal before getting a few hours of sleep, this year marks the first time retailers will take their opening times to the legal limit in Maine of midnight Friday to begin the 30-day shopping season.

“I can tell you that the ad is out and midnight is a go nationwide,” said Derek Simpson, assistant manager for Best Buy Co.’s store in Bangor. “We’re expecting bigger crowds since we’re open at midnight, so now it’s hopefully getting people in and getting them out in a timely fashion.”

Best Buy CEO Brian Dunn said in a statement released earlier this month that the Minneapolis-based retailer was changing its longstanding tradition to cater to evolving consumer habits where shoppers not only buy on the Friday after Thanksgiving, but also on the holiday itself.

“Black Friday has increasingly become an event, a ritual for so many," said Dunn. "And this year, Black Friday doesn't start the day after Thanksgiving, it starts the minute after Thanksgiving.”

Best Buy’s strategy of jumping on the midnight bandwagon stems from a slew of competitors who announced earlier this month that they would do the same. Kohl’s, Macy’s and Target Corp. all said the earlier opening times were in response to consumer demands for extended hours, and Walmart went a step further in announcing a 10 p.m. Thanksgiving night opening in states where it is allowed and midnight in others like Maine where it not. For one particular retailer, Toys R Us, this year marks the third in which they have opened at midnight

“The year before [in 2009] we were taken aback by the amount of people - the crowd was similar if not a little bigger than when we opened at 5 a.m. We let everybody in and it was hard for customers to even get across the store,” said Donny Elston, manager of the Toys R Us in Bangor. “Last year we were a little more prepared and we limited the amount of people in the store. As others come out, you sent more in.”

With two years under their belt, Toys R Us personnel are now accustomed to what’s required in backing up the workload for a midnight start after the Thanksgiving holiday. For Elston, who has been with the store for 22 years, much of the preparations for the holiday sales are already underway.

“I’m clearing the space as we speak,” he said, adding some of the merchandise that will be on sale Black Friday has already been delivered. “I know I better be done by the time we close Wednesday night.”

Similarly, Target’s move to midnight hasn’t changed much for store personnel, since most preparations are completed before end of day on Wednesday and employees tend to pick which shift they want for Black Friday.

“We always prepared the Wednesday before, and our plan has always been to be ready by opening time,” said Dave Scott, store manager for the Target in Bangor. “The people who are working that night are much more interested in working at midnight rather than at 4 a.m., and we even have some who want to close so they can go shopping themselves.”

Regardless of the starting time, retailers plan to exercise the same caution in shepherding shoppers into the store as well as how they navigate while inside, changes brought on after shoppers trampled to death a worker at a Walmart in Valley Stream, N.Y. in 2008.

“You have to staff your store for an onslaught of people coming in no matter what time you open, and we have very detailed plans of how people come in and leave,” Scott said. “The key to the whole thing is safety – everyone out there is shopping to get what they want.”

Leaking their way to success

Along with the increase in hours, this season marks a strategic turning point for the retail industry, which the NRF says has experienced 14 consecutive months of growth since last fall when the nation’s housing woes and consumer confidence leveled out. What’s different is the way retailers are releasing Black Friday information, including giving you a sneak peek of what’s to come.

Best Buy said Monday that the company will release more details of their early-bird specials in a sort of countdown until Black Friday itself. The company began releasing the specials last week in a bid to lure shoppers to its Facebook page and Twitter feeds, where the announcements are being made.

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And in a surprising shift from its attempts at past secrecy, Walmart followed the lead of other retailers and began leaking its Black Friday specials earlier this month. Previously, the company closely guarded its sales and went as far as threatening legal action to those who released the day’s details. However, the availability of the information on dedicated sites like Fatwallet.com, bfads.net, Leakedblackfridaydeals.com and GottaDeal.com, and even through apps like Android’s Colornote, led the company to placate to the online community and self-leak the specials to stay competitive.

“It’s actually pretty smart, and if you think about [shoppers] can plan out their night,” said Scott. “They plan their stops based on what they see and it will be a little more challenging for them this year since all the stores open at midnight. It seems to be the growing trend that people want to shop at that time day and Target wants to stay competitive.”

More than just a day

For many consumers, Black Friday marks the jumpstart to the entire shopping season. For retailers, however, it’s the one day they measure as the harbinger for what’s to come. And while last year’s Black Friday was a profitable one – in fact, it was the most profitable ever recorded – the entire weekend didn’t beat the sales recorded in 2009.

Chicago-based ShopperTrak, a retail analysis firm that tracks retail foot traffic and sales in the U.S., said in its National Retail Sales Estimate released earlier this year that Black Friday 2010 experienced a 2.2 increase in foot traffic, and the day’s total retail sales rose to $10.69 billion, the most ever recorded for the day. While a good start, sales for the remainder of the weekend failed to follow pace and ended up just below the year prior.

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Yet this year’s season adds a shopping day to the span between Thanksgiving and Christmas versus last year’s 29-day season. And Christmas falls on a Sunday this year, with Super Saturday – typically the second-highest day in sales for the entire season – falling a full week before since Christmas Eve is a day marked by early closures in anticipation of the holiday itself. Due to the shift in days, analysts expect the week before Christmas to hold the largest single day sales totals this year.

“Annually Black Friday weekend’s strong start is one bookend to the season and the week leading into Christmas is the other,” said ShopperTrak co-founder Bill Martin. “Successful retailers will prepare for these critical top 10 days, track their traffic internally and make adjustments to capitalize on shopper opportunities walking through their doors.”

And for the second year in a row, weather was no help either during the 2010 Christmas period.

Last year’s blizzard the day after Christmas paralyzed the entire Northeast corridor, which essentially shut down the region for two critical post-holiday shopping days. The storm, which had wind gusts of up to 50 mph and dumped up to 30 inches of snow in the New York City area alone, took days to dig out and cost the industry nearly $1 billion.

“It seems Mother Nature has impacted a very important selling day for retailers for the second holiday season in a row, moving a day that typically finishes second or third in sales to one that might finish outside of the top 10 this year,” Martin said in a statement following the storms. “Although sales and traffic levels picked up in the Northeast region later in the week, retailers weren’t able to recover all of the $1 billion that was postponed by losing Dec. 26 and 27.”

A different outlook

With the economy slowly recovering despite an unemployment rate that has remained historically high all year, seasonal hiring should follow last year’s pace closely, where 496,000 jobs were added for the holiday period. According to October data from the U.S. Department of Labor, the retail sector gained nearly a quarter million jobs this year versus the same period last year before seasonal hiring began. Reports indicate employers are expected to add about a half million jobs this season.

And similar to years past, many companies will focus efforts on their supply and inventory systems to stay lean and reduce excess merchandise. For others, the movement to online and mobile sales will be greater than ever before, with more apps available that will allow consumers to see what is available where instantaneously. Yet the Black Friday ritual of getting up early in the wee hours of the morning and camping out in front of their favorite store to land the deals is still alluring for many consumers. Last year, the day turned out to be the busiest of the season, but this year has seen retailers push the envelope even further and what used to be a few short weeks between the dual holidays has transformed into a cycle that begins even as far back as Halloween and lasts until the doors close Christmas Eve.

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Why so long and so early? In today’s fast environment where information is instant and the scarce dollar is king, the one who gets it first wins.

Last modified on Thursday, 17 November 2011 10:07

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