retail news in context, analysis with attitude

by Kate McMahon

The internet is abuzz this week with record-breaking holiday season e-commerce tallies and anticipation that consumers may ring up a second $1 billion dollar online shopping day.

I did my part on Green Monday (not to be confused with Black Friday or Cyber Monday bracketing the post-Thanksgiving weekend), the second Monday in December that earned its profit-making moniker from eBay back in 2007.

Going into this week, consumers had spent more than $21.95 billion online in the first 40 days of the November-December holiday season, according to comScore. Those numbers marked a 12% increase versus the corresponding days last year.

The bell-ringer was Cyber Monday, Nov. 29th, when sales cracked the $1 billion mark for the first time ever. With most free shipping offers ending Friday, this is expected to be the peak week online.

It’s worth noting that numbers are looking up for the brick-and-mortar set as well, buoyed by positive shopper turnout over the Black Friday weekend. The Commerce Department reported yesterday that November department store sales jumped 2.8%, the strongest advance in two years. That news prompted the National Retail Federation (NRF) to raise its forecast for holiday retail sales to 3.3% from a prior forecast of 2.3%. The NRF rarely revises its forecasts, last doing so in 2006.

And as economists and retail analysts try to decipher the trends, one thing is clear. Consumers are looking for value, and they will do their homework online, in the stores and with an app on their mobile phone to find what they want at the most attractive price.

The consumer blogs feature spirited debate on the merits of online vs. in-store shopping, or the new hybrid – order online with in-store pickup. On the internet forums, and in reality at area malls and local shops, I’ve found that many people mix it up. For example, they will choose online for shoes (zappos.com, with free shipping AND returns), online with store pickup for electronics, and in-store when coupons and free gift boxes make it worth the trip. (Those three words - worth the trip - make up the phrase that should be top-of-mind for every brick and mortar retailer.)

As always, some of the most in-demand items are rarely discounted – the Apple iPad (of course), UGG boots (still), Squinkies (small squishy toys that are the new Beanie Baby) and designer jeggings (for those MNB readers who do not have teenage daughters or a resident fashionista, this is a jean-legging combo).

“Too many brands think the only way to keep and get customers is by cutting prices. In reality, consumers are more interested in high value than low prices,” said consumer branding expert Sheri Bridges, a professor at Wake Forest University, citing Apple products as a case study. “Value is a function of the bundle of perceived benefits offered at a given price.”

There is every reason to believe that the same consumer who price-checked online and in-store prices before making a holiday purchase in 2010 could carry that behavior forward when purchasing big-ticket items as well as the basics – a gallon of milk, a 64-ounce container of laundry detergent or a 2 pound package of ground beef. And the producers, marketers and retailers who recognize and act on that reality will come out ahead in 2011.


Comments? Send me an email at kate@morningnewsbeat.com .
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