The holiday shopping season is losing some of its power

NEW YORK – The holiday shopping season is losing some of its power in the year of the turnover.

November and December, there are now less than 21 percent of annual retail sales in physical stores, down from a peak of more than 25 percent, and experts believe that it will continue to decline. That extra percentage point would have translated into an additional $70 billion more in buying last year, said Michael Niemira, principal of The Retail Economist.

The season had steadily gained in importance and reached its peak in the beginning of the ’80s, before the dominance of the large discounters such as Wal-Mart stalled his growth as shoppers started to walk away from the department stores. Still, the period of two months, held its own by the middle of the years’90, when you are online shopping for deals picked up.

“There was a mentality that even for online shopping,” said Niemira, whose data go back to 1967. “But this is just accelerated it.”

In general, many people shopping for the holidays, all year long now, mirroring the trend of ‘ back-to-school-articles. Heavy discounting has diluted sales, and great promotions throughout the year, shoppers are not making their largest purchase to the holidays.

This year, the controversial presidential election delayed some shoppers, and with Christmas falling on a Sunday, stores expect a greater number of last-minute buyers. On a busy Target store in Brick, New Jersey on Saturday morning, a lot of shoppers seemed to be picking up small items to use as stocking stuffers. Others hoped to find a last-minute deal.

“I’m pretty much set for Christmas, so I thought I would come down and see what I could find on sale, like maybe a TV,” Terry Kreft ” she said and walked through the store. They have about $600 on gifts this year to make use of discounts during the traditional holiday-season shopping days after Thanksgiving, the so-called “Black Friday” and “Cyber Monday.”

“I was pretty much done with my shopping before December got rolling,” Kreft said.

But a late rush is not expected to make the difference.

“It is no longer a seasonal business,” said Marshal Cohen, chief industry analyst at consumer research firm NPD Group, Inc. “It is a long-standing investment for the consumer. And retailers need to change. They have to excite shoppers early in the season and later in the season and all year long.”

Here is what is behind the shift:

SHOPPERS do NOT WAIT TO PURCHASE BIG-TICKET ITEMS: Stores now offer good deals throughout the year on products such as Tv’s and devices, so wait until the end of the year less attractive. Deloitte LLP found 30 percent of shoppers planned to wait for the holiday sales to buy gifts, compared with 35 percent a year ago.

“People are not holding back and waiting, because they find a good price for all the things that they are looking for,” said Rod Sides, vice chairman of Deloitte.

Christopher Rogers, a research analyst at Panjiva, which looks at imports, says that he has seen a smoothing out of the input during the pre-holiday shopping season from July to November on important articles such as clothing, toys and furniture.

The shift complicates matters for retailers, who can usually concentrate their efforts on the capture of shoppers during the holiday window.

HEAVY DISOUNTING: With fierce online competition, notably from Amazon, shops are constantly trying to outdo each other and even undercutting themselves on the prices of the previous year. Shoppers are trained to ask the question to deal with, and will not break the habit.

“The increased competition driven by the impact of e-commerce largely is driving the prices down on the popular holiday items,” said Traci Gregorski, senior vice president of marketing at Market Track. “Retailers know consumers often compare prices on these categories online and discounting more heavily to the traffic and sales.”

An example: The average price for a TV of Oct. 1 through Tuesday was $829.52, a decrease of $1,009.41 during the same period last year, according to Market Track, which followed promoted prices about 40 major retailers in more than 19,000 Tv’s.

The RISE OF GIFT CARDS: Shoppers give more gift certificates as a gift, that will skew holiday sales figures because they are not booked as revenue until they are redeemed. And most cards no longer have an expiration date.

This holiday season, gift cards were ranked second as a top gift, behind only clothing, according to the NPD. Gift cards sales accounted for approximately 25.4% of holiday spending last year, an increase of 13.5 percent in 2003, according to Goldman Sachs and Retail Economist.

SHOPPERS WANT to EXPERIENCE: Major department stores, such as Macy’s shoppers are shifting their spending away from traditional goods such as clothing and more in the direction of gifts that provide experiences, such as beauty treatments and other services.

NPD found 10 percent of holiday shoppers said that they intend to give fewer tangible gifts than last year, and 8 percent said that they would not have any tangible gifts. About 14 percent said that they will give more experiences as gifts this year than last year, the research group said.


Associated Press writer Bruce Shipkowski in Brick, New Jersey, contributed to this report.


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