black Friday, cyber Monday, shoppers
Ed Betz/AP

Can Black Friday Pull Buyers from Shopping Doldrums?

November 27, 2008 02:58 PM
by Shannon Firth
Cautious shoppers have retailers nervously anticipating Friday’s turnout.

Black Friday Offers Hope to Struggling Stores

On Black Friday retailers are hoping to recover from poor fall sales by discounting items as much as 70 percent, but most marketing experts and buyers, aware of their suddenly tight-fisted clientele, remain pessimistic.

For the first half of November, according to Spendingpulse, an information service supported by Mastercard, retail and electronic sales were 19 percent lower than the same period last year, along with a 7.5 percent drop in online sales. As the holidays approach, in simplest terms, Forbes’ Lauren Sherman writes, “Discounts are up because sales are down.”

Many consumers, anticipating those big discounts, have put off shopping for holiday gifts. As of November 11, Time magazine reported that 72 percent of customers had finished only one-tenth of their holiday shopping, according to the National Retail Federation’s (NRF) 2008 survey designed by BigResearch.

Compared to more upscale markets, however, the outlook is better for discount stores like TJ Maxx, Wal-Mart, Costco and BJ’s Wholesale Club. Laura Sen, president of BJ’s, which saw a 7 percent increase in third-quarter sales compared to 2007, told Time magazine: “Our position is serving us well in this economic environment.”
So will steep markdowns be enough to entice thrifty shoppers? The Maryland Retail Association says no. For the first time in 23 years, the group is predicting that holiday sales will flatline or drop.  But Howard Davidowitz, chairman of Davidowitz & Associates, a consulting and investment banking firm in New York, told Newsday he expects a rush of shoppers: “It’s going to be 100 times fiercer.”

Dr. Robert Passikoff, founder and president of Brand Keys, Inc., a consulting firm, told Forbes he expects a mixed bag: “Traffic may be up, but spending will be down.” Marshal Cohen of the market research firm NPD group in Port Washington, N.Y., told Forbes that buyers know they have the upper-hand and are therefore less likely to succumb to predictable habits of panic-buying, emotional buying or self-purchasing.

According to Forbes, Forrester Research forecasts a 12 percent growth in online purchases this season, to $44 billion. However, Marketwatch reports that, according to Maritz Research Group, purchasing behavior on Black Friday may be age-dependent. Generation X and Y are more likely to participate, while Baby Boomers and those of the Silent Generation are more apt to buy gifts online on Cyber Monday. Tom Krause of Maritz Research said that Generation Y is the only age group reporting it will spend the same amount on purchases as they did in 2007—approximately $550. He attributes this to the fact that Generation Y kids belong to an age group that has never before dealt with a recession.

Reference: Tools and tips for better shopping in stores and online

Yahoo offers great Tips for shopping on Black Friday:  scour the ads the day before, determine which gifts take precedence over others, be prepared for long lines and consider shopping with a partner or a “strike team.”

Plan to sleep in this Friday? findingDulcinea’s Guide to Online Shopping will help you find those Jessica Simpson heels, browse through unique craft purchases and bid on priceless eBay items for that special someone on your list, no hassle and no waiting.

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