Let the discounting begin.
Bargain-hunting shoppers turned out in droves for Black Friday markdowns, but they didn’t open their pocketbooks as widely as last year, according to several retail firms tracking the data. As a result, retailers are only cautiously optimistic heading into the mainstream holiday season, including today’s Cyber Monday, and experts believe that many stores will likely have to revamp promotions and discounting plans to ensure that inventories will be cleared by Christmas.
Already, retailers are moving aggressively. On Cyber Monday HP was offering a 15.6-in. laptop for $299.99, BestBuy.com was touting a 22-in. Toshiba LCD TV for $279.99 with free shipping and Walmart was hawking a Nintendo Wii “Value Bundle,” including the console and several games, for $249.
The lessons from Black Friday are already sinking in. Shoppers showed that “they’re thriftier, they’re savvier and every one of them wants to be the best bargain hunter out there,” said John Squire, chief strategy officer for Coremetrics, a Web marketing firm, in a statement.
The National Retail Federation estimates that 195 million people visited stores and websites over the Black Friday holiday weekend, up from 172 million last year. However, shoppers spent less, with average spending dipping 8%, to $343.31 a person from $372.57 a year earlier. Total spending over the holiday kickoff weekend reached $41.2 billion, up only slightly from $41 billion a year ago.
Ellen Davis, an NRF vice president, says shoppers were intensely focused on staying within budget. “Shoppers were looking for deals on lower-priced items such as $10 toys and $9 books, not $1,000 flat-screen TVs,” said Davis during a conference call on Sunday.
“They charged in and bought the door busters, and when the door busters were out, it was over,” says Howard Davidowitz, chairman of Davidowitz & Associates, a retail consulting and investment banking firm. “By 1 o’clock, there was no more Black Friday it was over.”
Scott Krugman, an NRF vice president, sees Black Friday as a barometer for consumer sentiment but says it’s not a slam dunk for how the rest of the holiday season will go. Last year, for example, shoppers spent 7% more over the Black Friday weekend than they did the year before. Yet holiday sales ultimately fell 3.4%, he notes.