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Heading into the Holidays

November 4, 2014

Catherine Salfino

Now that Halloween is over, retailers can unabashedly break out the holiday music and winter decorations — while reluctantly unveiling the inevitable sales and promotions to move product. Experts anticipate this season to be as discount heavy as ever, although there is no shortage of ideas to counteract that. [quote]

Retail forecasts from the National Retail Federation, the International Council of Shopping Centers and Deloitte call for holiday sales to climb in the 4%-to-4.5% range. While that’s good news for stores, the sizable promotional activity surrounding Black Friday and the last weekend before Christmas tends to generate the bulk of the business, which leads to lulls in buying — and nail biting for executives.

WSL’s Candace Corlett, president of the retail consulting firm, says after decades of grooming consumers to wait for sales, it’s hard to break the culture.

“Holiday season is certainly not the time to break shoppers of the deep discount cycle,” she states.  “These days, if stores aren’t offering at least 30% off, consumers say it’s not a sale. It’s the culture we’re in and retailers have no one to blame but themselves. Running a sale has become analogous to having pasta for dinner: You don’t know what else to do, you have pasta. You don’t know what else to do to move product, you run a sale.”

On average, holiday shoppers plan to spend $589 on gifts this season, up 16% from $508 in 2013 and up 4% from $568 in 2012, according to the Cotton Incorporated Lifestyle MonitorTM Survey. More than 8 of 10 holiday shoppers (83%) plan to increase (16%) or spend the same amount (67%) on holiday gifts this year compared to last year, relatively flat from 2013.

The NPD Group’s 2014 Holiday Purchase Intentions Survey shows 59% of all consumers say special sales prices, as well as overall value for the price (55%), will influence where they shop this year for gifts. Marshal Cohen, NPD’s chief industry analyst, writes on the firm’s blog that “until there’s some fashion freshness for consumers to anticipate, the appeal of door buster deals and other savings incentives” will be the Christmas magic that draws shoppers out this season.

Apparel is the second-most popular gift (58%) shoppers plan to give this year, right behind gift cards (60%), according to the Monitor™ survey. That’s followed by toys (48%), electronics (36%), and fashion accessories (27%). However, the bulk of the holiday budget goes toward electronics ($374), then clothes ($222), gift cards ($173) and home textiles ($114).

More than 8 of 10 apparel gift givers (82%) plan to spend more (18%) or the same (64%) amount on holiday apparel gifts this year compared to last year, the Monitor™ survey shows. The top gift items will be T-shirts (50%), socks (38% — up significantly from 25% in 2013), sleepwear (38% — up significantly from 31% in 2013) and jeans (35%). These items are also the top items consumers would like to receive this season. Consumers are also more likely to say they plan to buy and receive denim jeans compared to active pants.  About two-thirds (66%) of holiday shoppers say they would prefer to receive denim jeans as a gift this season compared to active pants.

The majority of gift givers are concerned with apparel fiber and quality, as the majority (65%) read the fiber content before purchasing, 56% look for cotton and cotton blends, and 52% will pay a little more money for apparel made from natural fibers like cotton and wool.

Despite the shopper’s desire for and willingness to pay a little more for better quality apparel gifts, Corlett says the promotions will be rampant and start earlier than ever this season.

“One of the holiday truths about shopping is consumers generally have a budget and whoever gets their spending first wins,” she says, “And that’s what is driving Black Friday sales to kick off 10 days before Black Friday even begins. Rushing the season does not move more full-priced product; it just means getting the sales out there earlier. Retailers know it works. Shoppers may say they don’t like early decorations and holiday music and door buster sales, but stores know if you display it, they will come.”

Corlett says stores can somewhat navigate away from discounts by making the holiday shopping experience easier.

To that end, Westfield Garden State Plaza in Paramus, NJ, has a number of services in place for the holidays, as well as a host of planned events. The shopping center is located a half-hour away from Manhattan and generates almost $1 billion in annual retail sales via nearly 19 million annual customer visits. Its location allows Garden State Plaza to take advantage of New York City’s talent: a celebration with Santa and the Grinch from Madison Square Garden’s Theater, as well as “Merry Makers,” a focal point in Westfield’s national campaign launching on Black Friday, wherein professionally trained actors will present give-a-ways, song and dance routines, and assist shoppers throughout the center.

Besides multiple locations for valet parking, Garden State Plaza spokeswoman Lisa Herrmann-Srednicki explains the shopping center offers a coat check service during the cold-weather season, as well as year-round “Answers on the Spot” — a texting service that allows shoppers to send a question and get an instant response on everything from store locations to pricing information to wheelchair assistance.

These are game-changing service plays, Corlett says. “Consumers say, ‘If you’re not going to make it easier for me, you’re going to have to pay by giving me discounts.’ So whoever gets out in front with services will benefit.”