StrataGist
Local Perspectives On National Trends (Southern Oregon)
This month (November 2008), many local and national news outlets tracked potential impact the economic slow-down might have on consumer spending during the holiday season. Shopping activities on the day after Thanksgiving ("Black Friday") are a major indicator that analysts and retailers use for in-store sales forecasts.
November 2008 statistics will include Black Friday, but final numbers for online purchases won't be tallied for "Cyber Monday" until December 1st. [Preliminary estimates compiled by PriceGrabber for its web site showed a substantial increase in online activity early in the morning on Black Friday compared to last year. Consumers were probably comparing prices and shipping costs before making in-store shopping trips.]
Year-End Shopping Trends
National News:
Pricing has become extremely competitive, so savvy shoppers are seeking or waiting for the very best deals. Much of the positive mood generated on Black Friday, however, may reflect strong consumer response to the one-day-only bargains. Despite dire news about the credit crunch, in-store cards are readily available, netting anyone who signs up an additional 10% or 20% off the first purchase. [1]
Retailers are implementing other tactics, too. Sale items are being moved from the front to throughout the store. Others are expanding "door buster" items. (One New York City store increased its Black Friday offerings ten-fold over 2007 levels.)
Some retailers are in better shape than others. As reported on the CBS Evening News (November 27, 2008), the Gap Inc. experienced an 8% decrease in sales for the year to date, but net income rose as a result of operational streamlining (closure of unprofitable stores, inventory reductions, etc.). [2] Retailers take whatever measures they can in anticipation of consumer trends. The current outlook is bleaker than usual. Survey data suggest that most consumers (69%) will spend less or the same amount as last year.
Over time, a serious concern is whether some consumers will be able to pay off the debt they accumulate this season. An estimated 11% of shoppers haven't paid for their holiday shopping from last year. [3]
Rogue Valley Observations:
Southern Oregon consumers expected better deals and lower prices this year. Many shoppers found them during the early morning hours of Black Friday. Retailers anticipated lower numbers of shoppers due to the slowdown, but the crowds suggested it wasn't a deterrent. [4]
The overall impression is that people were looking for bargains, using coupons at their usual stores or abandoning them to save money at deep discounters such as Dollar Tree and Wal-Mart. In the week before Thanksgiving, Feed-back.com's lead researcher noticed that retail stores were very crowded. Consumers seemed to be purchasing small gifts and sale items in medium-sized retail stores and downtown shops. Next month's StrataGist will include detailed survey findings.
For past issues of StrataGist, visit the Archive.
[1] "Black Friday Crowds Hit The Stores", Mercury News, November 28, 2008.
[2] "Retailers Cross Fingers As Holidays Near", CBS Evening News, November 27, 2008.
[3] Ibid.
[4] "Local Shoppers Line Up Early For Black Friday Deals", KTVL News, November 28, 2008.
