Stores try to lure in consumers
BY MAE ANDERSON Associated Press
Sunday, November 25, 2012
11/25/12 at 3:28 AM
NEW YORK - This holiday season, Burger King won't be the only place where you can have it your way.
It used to be enough for stores to promise discounts up to 70 percent to lure shoppers during the busy holiday period. But the ease of ordering online and the sluggish economy changed that. Americans are no longer impressed by discounts alone.
Now they want their shopping just like their fast food: not only cheap, but also convenient.
That means they're no longer afraid to walk away from the cashmere sweater with the perfect fit if the store is crowded. They're unwilling to buy those suede pumps in just the right shade of blue if shipping costs extra. And they cringe at the prospect of carrying around paper coupons; they'd rather pull them up electronically on smartphones.
Retailers from Wal-Mart to Macy's are doing everything they can to make it easier for more finicky shoppers to spend during the holidays. Several opened on Thanksgiving Day. Some are offering free layaway and shipping. Many are matching in-store prices with cheaper online deals. Others are allowing shoppers to buy online and pick up purchases in stores.
It's the latest effort by stores to court shoppers like Patty Edwards of Bellevue, Wash. Four years ago, Edwards made all of her holiday purchases online through Amazon because she thought it was the easiest way to shop. But this year, she plans to go elsewhere because stores are offering more shipping options.
"Now I'm not necessarily tied to Amazon," said Edwards, a retail analyst and principal at investment firm Trutina Financial. "I can go to Nordstrom, Saks or Target and have stuff available to pick up. It's a pretty simple process. That wasn't the case four or five years ago."
The have-it-your-way approach is partly a response to fear. Merchants are concerned that shoppers will spend less freely this season because of worries about high unemployment and a package of tax increases and spending cuts known as the "fiscal cliff," which will take effect in January unless Congress passes a budget deal.
The changes also come as the growth of smartphones and tablet computers has made it easier to browse and buy with the touch of a fingertip.
That puts pressure on brick-and-mortar retailers, which count on holiday shopping for up to 40 percent of their annual revenue, to get shoppers into stores. It's becoming an increasingly difficult feat: The National Retail Federation estimates that overall sales in November and December will rise 4.1 percent this year, below last year's 5.6 percent growth. But the online part of that is expected to rise 17 percent, according to research firm comScore.
"Retailers have to do a little more to grow sales this year," said Frank Badillo, a senior economist at consultant Kantar Retail. This isn't the first time stores have had to up the ante. As Americans cut back on spending during the economic downturn, merchants ramped up their already deep discounting.
Shoppers became addicted to the ever bigger sales and began fleeing to online retailers, which can offer much cheaper prices because they don't have the same overhead costs to operate brick-and-mortar locations. Plus, websites offer the convenience of shopping in the comfort of homes or office cubicles.
To better compete, brick-and-mortar stores concluded that they would have to replicate their online rivals' formula. Shopping needs to be cheap and easy, they figured. So stores began trying new ways to make shopping more convenient, such as free shipping and expanded hours.
This holiday season, they've expanded the scope and scale of those incentives.
Stores often opened in the wee hours of the morning on the day after Thanksgiving Day, which is typically the biggest shopping day of the year. But Black Friday openings are even earlier, and now are on Thanksgiving.
And retailers are going further. About 44 percent are offering free shipping this year, a jump from 12.5 percent last year, said Vicki Cantrell, executive director of Shop.org, the National Retail Federation's digital retail division that tracks retailers' online offers. UPS said retailers also are working to make returns easier by including return labels in packages or providing a link online that customers can use to print labels.
Frankie Lee, the first in a line of several hundred shoppers at a Walmart in Oakland, Calif., rubs his eyes shortly before the store opened at 5 a.m. If the economic downturn has taught retailers anything, it's that a 50 percent-off sale isn't enough to lure finicky shoppers. NOAH BERGER / Associated Press