The Atlanta Fed's SouthPoint offers commentary and observations on various aspects of the region's economy.
The blog's authors include staff from the Atlanta Fed's Regional Economic Information Network and Public Affairs Department.
Postings are weekly.
Retailers Channeling Elvis
Popularized by Elvis Presley in 1957, Blue Christmas laments feelings of missing someone during the holiday season. It could be said that, based on preliminary results, brick-and-mortar retailers are channeling Elvis as they too are missing someone this holiday shopping season...the consumer.
Merchants are experiencing a shortened holiday shopping season with Thanksgiving falling later in the month of November. With six fewer shopping days, retailers approached this season with deeply discounted merchandise in an effort to attract foot traffic on Black Friday, the day after Thanksgiving and the traditional start to the holiday shopping season. Many stores even opted to open on Thanksgiving to entice consumers to shop. However, the efforts appear to have fallen short of expectations as shoppers have been very cautious with their spending this year. According to the National Retail Federation, shoppers spent 2.9 percent less during the Thanksgiving weekend this year versus last year. Additionally, both the Conference Board’s (CB) and the University of Michigan’s (UM) consumer surveys indicated consumer confidence with current conditions decreased in November, and future expectations were mixed (CB decreased; UM increased slightly).
But all is not lost. E-commerce appears to be emerging as the shining star in the retail industry. Even though retailers may feel like it “won’t be the same dear, if you’re not here with me,” the expectations for Cyber Monday, the Monday after Thanksgiving, to be the busiest online shopping day of the year seem to have been proven true. Last year “showrooming” (consumers visiting brick-and-mortar stores and comparing prices on their mobile devices) posed a huge concern; however, this year retailers appear to be embracing the online shopper. With all indications that the consumer has become more comfortable purchasing items online using their smartphones and tablets, retailers decided to enhance their mobile sites by offering huge discounts, free shipping, and customized shopping experiences in order to drive sales to their own online sites. November’s retail sales numbers seem to support this. Although overall sales were up, nonstore retail (online) posted the largest gain. Other evidence that online shopping is the wave of the future is that of a major shipping company indicating double-digit percentage increases, year over year, in the volume of items processed during the Thanksgiving weekend.
So, will retailers “be so blue just thinking about you” over the 2013 holiday season? Will they at least meet their sales expectation or experience some growth? Only time will tell as there are only a few shopping days left.
By Christine Viets, a Regional Economic Information Network analyst at the Atlanta Fed’s Jacksonville Branch
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Happier Holidays? (Part Two)
In mid-October, market observers began thinking about the upcoming holiday shopping season and wondered what to expect from consumers given the tepid growth in spending thus far. Well, with Black Friday and Cyber Monday kicking off the season, it appears that this popular shopping weekend was a huge success. The National Retail Federation (NRF) reported that Americans headed into the holidays shopping in record numbers over the Thanksgiving weekend. The NRF said that 247 million shoppers went to stores and websites, which translated into a 6 percent increase in unique shoppers from last year. Spending reached $59.1 billion, up 12 percent from last year. Shoppers spent an average of $423 that weekend, up from $398 last year. As expected, online shopping played a major role, accounting for 41 percent of the total weekend shopping, up from 38 percent last year. CNET reported that some 57.3 million people visited online retail sites on Black Friday, an 18 percent increase over last year. Excluding auction sites such as eBay, the most-visited site was Amazon, followed by Walmart and Best Buy. Target and Apple rounded out the top five.
From a local perspective, Steven P. Kirn, executive director of the David F. Miller Center for Retailing Education and Research at the University of Florida, reported that "[The] weekend bodes well for holiday sales. Maybe most striking is how both the retailers' promotional strategies and timing—and customer behaviors—are 'spilling over' in both directions, to pump sales both before and after the actual 'Friday.' "
All this data and information causes me to ponder: Is this rate sustainable? My hope is that the positive outcome from the Thanksgiving weekend does indicate improving conditions, but I guess only time will tell. We'll keep our eye on this situation and check back in after the holidays. Happy shopping, everyone!
By Christine Viets, a REIN analyst at the Jacksonville Branch of the Federal Reserve Bank of Atlanta
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