December Sales Round Two

The standoff has started. Bargin shoppers vs chain-stores holding back on the big discounts. Round one went to the shoppers who didn’t shell out the big bucks this Black Friday.

According to UBS 9 out of 10 shoppers want at least 50% off and America’s Research Group ltd. reported that a third of the people they survey are awaiting 70% before spending.

The stores on the other hand are walking a thin line. If items are discounted to much than it will drastically cut into sales which will hurt struggling stores but sales that aren’t good enough will keep shoppers out of their stores and profits down.

However don’t count the chain stores yet. They have contingency plans in their back pockets that they will pull out as a last resort. The chief executive of Ann Taylor Stores Corp, Kay Krill, said that they have banners for discounts ready, but don’t want to go ahead with them until they have to. Other retailers carried over their Black Friday sales for the rest of the week or expanding those sales.

The next round will be declared this weekend with only two shopping weeks left. Who do you think will take it?

Instant Credit

Enter any department store or look at any ad these days to and it isn’t hard to see stores offering incentives for not only opening a card at their store, but also offering special sales to those who use their store card. The Federal Bank is on the move to make it harder for stores to provide instant credit at their registers. What do they want to do? They want customers to provide information about how much they earn before credit is granted. Currently credit scores of the customers, which checks their payment history, is checked before anyone can qualify. This is used as an indicator can or will pay their bills.

Major stores like Macy’s and Saks are fighting this proposal. Stating that asking someone to provide information about their income or assets could be awkward especially with other customers standing around. It also calls into question the accuracy of the information that would be provided. It also calls into question how this proposal will improve the credit-granting process.

If the this proposal is past stores are going to have to rethink their marketing strategies that include loyalty programs that spur sales with special discounts or promotions. It will also hinder their way of tracking spending habits.

Currently there is not deadline for the proposal that will also include attention to increasing intreats rates and increasing the requirement of when statements need to be sent.

After all would you feel comfortable about handing over your yearly salary to a cashier in addition to your address, name, birthdate, social security number and other personal information?

Black Friday

The numbers are in for Black Friday, but the numbers aren’t what some expected. Traffic in stores was up 13% from 2008, but according to the National Retail Federation, spending was down 8% per person. Why is this happening? Some stores say that warmer than usual weather left their seasonal items on the shelf. Others claim that in time of economic downturn people will spend closer to need. It is also no shock that many people are still watching every dollar. That brings us to the most likely reason: the discounts. Trolling the Black Friday ads very few stood out as offering better discounts than normal or even at all. With consumers looking for discounts comparable to last year (some stores cut as much as 75%) they are sending the clear message that they are willing to wait for a better price, but this may leave them in them in shock. Some stores like M. Fredric are not offering storewide discounts and consulting groups are advising their clients to do the same. Many stores and boutiques can’t compete with the large discounts stating that it would put them in financial ruin. Instead they opt to offer better prices on unique items. While the stores and consumers battle it out over the discount war many stores knew that this standoff was inevitable and calculated it into their strategy. They are offering deals until Christmas to encourage sales. How about you? Were you out spending Thursday or waiting it out the discounts?