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article imageTight budgets, cautious consumers cause Black Friday slump

By Kelly Fetty     Dec 4, 2013 in Business
Recession-weary shoppers used smartphones and tablet computers to home in on the best deals, but the 2013 Christmas shopping season still got off to a disappointing start, analysts say.
Although a record 141 million Americans headed to malls, shopping centers and big box stores during the four-day Thanksgiving weekend, spending fell by 2.9 percent compared to 2012, Bloomberg News reported.
The average shopper spent $407.02 during the Thanksgiving weekend, down 3.9 percent from 2012's average of $423.55, according to the National Retail Federation (NRF) .
It was the first decline in spending during the holiday weekend since 2009.
News outlets and retail analysts blamed the weak economy. An NRF consumer survey conducted in October found that 79.5 percent of shoppers planned to cut back their holiday spending.
“We expect consumers to set a modest budget for gifts and other holiday related purchases as they wait and see what will become of the U.S. economy in the coming months," said NRF CEO and President Michael Shay.
"Mission shopping" instead of "self-gifting"
Retailers have traditionally used showy "doorbuster" markdowns on specific items to lure Christmas shoppers, with the expectation that once shoppers enter a store they will be tempted to take advantage of other markdowns and buy items for themselves.
These extra impulse purchases are called "self-gifting." The NRF expects "self-gifting" to decline from last year's average of $140.43 per shopper to $129.62.
Instead, analysts are seeing a sharp increase in "mission shopping"— consumers seeking out the best price on one specific item and resisting impulse purchases.
Thom Blischok , chief retail analyst with Booz & Co. in San Francisco, surveyed 300 shoppers during the Thanksgiving weekend.
“They had an absolute plan,” he said. “I found virtually no browsing.”
Five years of stubbornly high unemployment and lackluster incomes have given American consumers a new skill set, says Pam Goodfellow of Prosper Insights and Analytics.
“Consumers have had years of practice when it comes to managing tight budgets while still spending on items they need to, whether it be gifts or groceries for the family,” she said in NRF's October report. “Retailers can expect to see practical and refined attitudes from their customers this holiday season as families make thoughtful decisions about what they need to buy and what they can pass on.”
"Cyber Monday" steals the spotlight
A surge in online shopping was the one bright spot in the opening of the 2013 Christmas shopping season.
"Cyber Monday"— the Monday after Thanksgiving when many employees return to work and continue their shopping online—saw a 21 percent spike in sales compared to 2012, Bloomberg News reported.
Both Amazon.com and Ebay reported single-day shopping records.
Holiday season internet sales are expected to grow by up to 15 percent, three times the expected growth of brick-and-mortar sales. Most of that growth is tied to purchases made using mobile devices such as tablets and smartphones, CNN Money reported.
“This is the first holiday season where mobile is absolutely having its mark on overall retail sales, whether that’s from a smartphone or a tablet. It’s not going away,” JMP Securities analyst Ron Josey told Bloomberg News.
Shoppers also used their smartphones and tablets to find the best deals before heading out to brick-and-mortar stores.
“Consumers increasingly research products online before entering stores," said Bill Martin, founder of ShopperTrak. "When they arrive, customers know exactly what they want to buy – retailers now need to make their experience a satisfying one.”
"Nowadays, you have to think about what you spend," shopper Adriana Tavaraz, 51,told the Associated Press. "You have to think about tomorrow."
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