NEW YORK — How CE dealers will fare this holiday season is anybody’s guess, with forecasts by merchants and analysts tracking all over the retail map.
ShopperTrak, a Chicago-based market research firm that measures store traffic, is projecting a modest 1.2 percent increase in CE and appliance retail sales for November and December, and a nearly 5 percent decline in foot traffic for specialty dealers and CE/majap departments.
In contrast, 62 percent of chief marketing officers at 100 leading U.S. retailers believe CE will be the strongest selling category for Holiday 2012 — as well as the most promotional, according to a recent survey by BDO USA, a Chicago consultancy.
Taking the middle road is the National Retail Federation (NRF), which suggests that holiday demand for CE products will be on par with last year. According a seasonal spending survey conducted last month by the retail trade group and BIGinsight, 35.8 percent of consumers would like to receive CE or computer-related accessories as a gift this holiday season, compared with 35.4 percent last year. Similarly, 31.8 percent of respondents said they plan to shop at CE specialty stores this quarter, dead even with last year’s tally.
NRF’s forecast jibes with the outlook of Jim Ristow, executive VP of Home Entertainment Source (HES), the A/V specialty division of the BrandSource buying group. Ristow is anticipating a solid holiday season that’s “good, not great,” and about on par with last year’s fourth-quarter take, he recently told TWICE.
Contributing to the glad tidings are vendors’ buildto- order production strategies, which will keep inventories in line and prevent the gluts of past holiday periods that led to excessively disruptive pricing and margin declines, he said. Another critical factor for the restrained holiday season are vendors’ new unilateral pricing policies and multichannel MAP policies, which have helped stabilize the marketplace and bolster margins within the mid- to premium-price tiers, where HES’s assisted-sales dealers dwell.
Like Ristow, Anthony Bruno, executive director of NECO, the Northeast division of the Nationwide Marketing group, is “positive” on the holiday season.
“Our expectation is that sales will spike as they have been all year during a holiday period,” he recently told TWICE. “We expect margins to improve slightly over last year due to prior price increases and less aggressive and comprehensive discounting, as vendors try to narrow model selections for promotions.”
Also working in retailers’ favor this year is a calendar aberration that will provide the greatest possible number of shopping days — 32 — between Black Friday and Christmas, including two extra weekends in the holiday season that result from Christmas falling on a Tuesday.
Still uncertain though is the impact that Hurricane Sandy and a subsequent Nor’easter will have on holiday sales in the beleaguered and densely-populated markets of New York, New Jersey and Connecticut. While many dealers may see an added boost in business due to replacement sales of TVs and major appliances, some analysts say the storms’ destruction and extensive disruptions are more likely to put a crimp in holiday sales. Writing in a CNBC guest blog, Planalytics senior VP Evan Gold expects storm-related spending “will likely cause many consumers to revisit their holiday shopping budgets,” while Paul Walsh, weather analysis VP for The Weather Channel, noted on CNBC’s “Squawk Box” that the massive, widespread power outages will likely have a major impact on November sales across the board.
Regardless of Sandy’s ultimate toll, “Every shopper in a store will be more valuable than last year, and retail stores should be ready to convert their holiday shoppers into sales,” advised ShopperTrak co-founder Bill Martin. “Retailers who pay close attention to their browser-to-buyer conversion rates and adjust their product offerings, store layouts and staff scheduling to improve those rates will be the most successful this year.”
BDO USA partner Doug Hart similarly reminded retailers that “consumers have more choices than ever,” and that savvy merchants are looking to avoid showrooming by “curating a mix of exclusive and top-selling products to get consumers in their door or on their site.”
Many retailers are doing just that. Best Buy, for one, said its go-to-market strategy for the holidays includes price matches, free shipping and a midnight opening on Black Friday.
The price-match plan, which went into effect last month, covers identical CE hardware and majaps sold by local stores and 20 online-only sites including Amazon.com, Crutchfield and Newegg, and those of B&H Photo, Dell, h.h.gregg, HP, Home Depot, Lowe’s, Target, Walmart, the office-supply chains, and Systemax’s Circuit City, CompUSA and TigerDirect sites. Third-party sellers are excluded.
Price matches will be authorized by Blue Shirt sales associates during a window that extends through Dec. 24, although the policy will be suspended Nov. 22-26 for the Thanksgiving/Black Friday period.
Stores will open at midnight on Black Friday, Nov. 23, for the second year in a row. Lead doorbuster items in its 22-page circular include a 40-inch Toshiba LCD (1080p, 60Hz) for $180; an 8GB Samsung Galaxy Tab 2 7.0 plus a $20 gift card, also for $180; and a 15.6-inch Samsung laptop with Intel Core i3 processor, 4GB memory, 500GB hard drive and bundled laptop sleeve, wireless mouse and 8GB flash drive, for $350.
Sales associates will begin handing out tickets for the limited-quantity items at 10 p.m. Thanksgiving evening.
In addition, Best Buy is repeating its free shipping offer on all online orders placed through Dec. 24; is stretching its return window to Jan. 24 for all purchases made Nov. 4 through Dec. 24; and will offer extended store hours and sameday pick-up of online orders during the holiday period.
To help handle the holiday crush, the company is hiring 24,000 seasonal employees including 12,000 temporary Blue Shirts, 10,000 customer support personnel, and 2,000 distribution center workers.
No. 2 CE retailer Walmart said its Black Friday plans, like last year, will include a phased rollout of post-Thanksgiving promotions, and that CE will be the focus of another one-hour sale that will commence at 10 p.m. on Thanksgiving evening.
But unlike past Black Fridays, which garnered notoriety when customers and staff were injured and even killed by deal-seeking throngs, Walmart is guaranteeing availability of three select CE doorbusters to customers who are on in-store queues during the electronics sales event. The short guaranteed items include a 16GB Apple iPad 2 with Wi-Fi for $399, plus a $75 Walmart gift card; an Emerson 32-inch 720p LCD TV for $148; and an LG Blu-ray Disc player for $38.
“We know it’s frustrating for customers to shop on Black Friday and not get the items they want,” said Duncan Mac Naughton, chief merchandising and marketing officer at Walmart U.S. “This year, for the first time ever, customers that shop during Walmart’s onehour event will be guaranteed to have three of the most popular items under their tree at a great low price.”
In addition, a two-day online-only sale on Walmart. com beginning early on Thanksgiving Day and extending through Black Friday will include a Samsung 50- inch LED 1080p 60Hz HDTV for $698, a 4GB Ematic 7-inch Android 4.0 tablet for $49, and a DSi XL “ultimate bundle” for $129.
Customers can also receive special online-only sales alerts by signing up for email at Walmart.com, “liking” the company’s Facebook wall, or downloading the Walmart mobile app.
Gisel Ruiz, executive VP and COO of Walmart U.S., said her division is bringing on 50,000 holiday hires and offering more hours to full-timers to ensure that the stores are adequately staffed during period.
At sister warehouse division Sam’s Club, customers will be greeted on Black Friday with a fresh cup of Starbucks coffee and pastries starting at 7 a.m. as they vie for such deals as an HP Pavilion 14-inch Windows 8 Sleekbook notebook with 6GB RAM, 500GB hard drive, HD LED display and Intel Core i5 processor for $399; Samsung’s Galaxy S III Android smartphone for 96 cents with two-year contract; and a 65-inch Vizio 1080p 120Hz smart LED TV for $998.
No. 3 CE seller Amazon.com got a jump start on the holidays with the early November launch of a “Black Friday Deals” store. The destination, located at Amazon.com/BlackFriday, features a “Deal of the Day” sale along with limited-time, doorbuster-style “Lightning Deals” and other steep savings on CE and other categories through Black Friday weekend.
“By visiting our Black Friday Deals Store customers can expect to find a large selection of the most anticipated products of the season, all for a great price,” said Amazon CE VP Ben Hartman. Customers can also take advantage of free shipping on millions of items through the e-tailer’s Amazon Prime membership program and “free super saver shipping” items.
CE items that will be discounted at various times leading up to Black Friday include Panasonic Viera ST50 plasma and E50 LED TVs, Samsung’s Series 9 premium Ultrabook in silver, and Xbox 360 250GB with Kinect.
Amazon global customer fulfillment VP Dave Clark added that the company is hiring 50,000 seasonal workers at its 40 fulfillment centers across the U.S. to meet increased customer demand this quarter.
At Sears Holdings, mobile point-of-sale devices are being rolled out to its stores to help speed up the checkout process this holiday season. The devices help shorten checkout lines by allowing customers to make purchases from anywhere in the store with a credit or debit card. Receipts can be printed, emailed, or both.
Sears and Kmart have also temporarily suspended layaway service fees, and customers can have their online layaway purchases shipped to their homes. In addition, the chains will offer prizes, loyalty rewards offers and stocking-stuffer sales throughout the holiday period.
“Sears and Kmart will win this holiday season because we provide best-in-class layaway options, new instore mobile experiences for added convenience, exclusive products … and weekly holiday sales for our customers,” said Ron Boire, executive VP/chief merchandising officer and president, Sears and Kmart formats.
For Black Friday, both Sears and Kmart stores will be open on Thanksgiving Day, the second time ever for Sears. Sears’ doors will open at 8 p.m. on Thanksgiving Day and remain open overnight until 10 p.m. on Black Friday. Kmart stores will be open from 6 a.m. until 4 p.m., and from 8 p.m. to 3 a.m. on Thanksgiving Day, reopening from 5 a.m. to 11 p.m. on Black Friday.
Like Best Buy, Target is matching competitors’ online prices this holiday season to take back share from e-commerce competitors. The new policy, designed to blunt the showrooming phenomena, is part of the discounter’s go-to-market strategy for the fourth quarter, which also includes mobile purchasing, free in-store Wi-Fi, and an extended return policy for Target’s private-label card holders.
The price-match plan, which will be in effect through Dec. 16, is limited to identical products sold by a short list of online competitors including Amazon.com and the e-tail sites of Best Buy, Toys “R” Us and Walmart.
Price matching will also extend for the first time to Target.com, and will continue to include local retailers’ ads. Both will have a longer window, ending Dec. 24.
In addition, Target will launch a “shoppable” holiday advertising campaign on Nov. 7 that will allow customers to place purchases from TV spots, bus shelter ads and catalog pages by using their mobile devices to send a text or scan a QR code.
QR codes will also be displayed in stores alongside select items, allowing customers to scan and purchase products from their mobile phones for free shipment anywhere in the U.S.
To encourage in-store QR code scanning, and allow customers to redeem mobile Target coupons, the chain has also begun offering free Wi-Fi in all stores. The retailer is also testing “wayfinding” technology in a small number of stores that can determine customers’ locations via their smartphones and guide them to specific products within stores.
The company will also extend its already liberal 90-day return policy by a month for holders of its private-label Redcard credit and debit cards.
Target said it was looking to hire 80,000 to 90,000 seasonal workers for the holidays.
Newegg, the leading CE-specific U.S. e-tailer, isn’t waiting for Black Friday to launch its doorbuster deals. Special weekend sales will occur every weekend leading up to Nov. 23, the company said, and deep discounts on laptops, Ultrabooks, tablets, TVs, cameras, computer components and video games will continue through the end of the year.
On Nov. 21, Newegg will launch its formal Black Friday promotion, which will include hundreds of deals that will be valid through Nov. 25, to be followed by two additional days of Cyber Monday and “Encore Tuesday” promotions.
“We understand holiday shopping can be stressful so we want to try to make the process as easy as possible for consumers,” said Soren Mills, chief marketing officer of Newegg North America, citing its wide product selection and more than 2.5 million on-site reviews.
Newegg is also running its Iron Egg guarantee program through Dec. 24. Designated items will be eligible for free shipping; will have an extended return date of Jan. 31; and are covered by Newegg’s lowest-price policy, which guarantees to refund the difference if the same product sells for less at select online retailers.
For its part, HES is urging dealers to drive traffic to their stores by promoting before and after the Black Friday period, using the group’s line-up of Expert Warehouse drop-in models and special buys and zero-percent financing offers.
During a pre-holiday webinar, Ristow also advised members to offset lowmargin promotional models by trading up customers to better-quality SKUs, attaching soundbars and BrandSource warranties to the sales, and offering component and wireless audio options.
NECO’s Bruno is anticipating greater competition for fewer shoppers this holiday season, but believes “There is still business out there to be had. If the value proposition and service is there, you can win the consumer.”
» 65-inch Vizio LED 1080p TV (120Hz)
$998, Sam’s Club
» 55-inch Panasonic 3D LED-TV, (120Hz) w/four pairs of glasses
$900, Best Buy
» 60-inch Vizio 720p LED smart TV
» 50-inch Westinghouse 1080p LCD TV
» 15.6-inch Lenovo laptop (AMD dual-core E-300 processor, 2GB memory)
$188, Best Buy
» 32-inch Apex LCD TV (720p)
» 7-inch Ematic 4GB tablet (Android 4.0, 1GHz)
» Samsung Galaxy S III
$0.96, Sam’s Club
Source: Best Buy, Target, Wal-Mart