Snowy Weather Clouds Holiday Outlook

Discussion
Dec 22, 2009
Tom Ryan

By Tom Ryan

The snowstorm
that blanketed much of the eastern U.S. washed out “Super Saturday” for
many stores in those regions and apparently caused some retailers to rethink
final-days marketing strategies.

The last Saturday
before Christmas is said to be the biggest shopping day of the year an
estimated $15 billion spent. The Northeastern corridor, stretching from
Virginia to Massachusetts, accounts for at least 25 percent of those sales, The
Wall Street Journal
reported. Still, many reports showed the sales
over the weekend were solid across other parts of the country.

To combat any
lost sales, some retailers may extend promotions into Monday and Tuesday
to attract shoppers, NRF spokeswoman Ellen Davis told Bloomberg.

Target
as well as Borders extended store hours in states affected by the storm
through Wednesday. “The majority of our stores in hard hit areas will open
one hour earlier than originally planned and remain open until midnight,” Troy
Risch, its executive vice president of stores told the Journal.
Some retailers, such as Macy’s, already had planned to be open round-the-clock
in select regions during the final week.

With many retailers
touting online specials early Saturday morning with guaranteed Christmas
delivery, online sales are also expected to benefit by being able to reach
snowed-in shoppers. Many are offering extra incentives for procrastinators. Amazon,
on Tuesday, extended free one-day shipping on all Kindle orders for shipment
in the continental United States made on December 23rd.

A few speculated
whether the storm could increase the importance of post-Christmas sales.
On Monday, Target said all stores nationwide will be open from 7 a.m. on
December 26 while JC Penney said stores would open at 5 a.m. – the earliest
opening on the day after Christmas in its history.

The International
Council of Shopping Centers stuck by its estimate calling for holiday sales
to rise one percent.

“At this time
of year, bad weather does not generally reduce demand,” said chief economist
Michael Niemira told Dow Jones Newswire. “It shifts it to another
time. The rest of this week will be crucial.”

The National Retail Federation
likewise kept its forecast that retail sales would fall one percent this
holiday season, noting that any drop-off in the East won’t overly hamper
large retailers’ national sales.

Scott Krugman, spokesman for
NRF, also said the online option helps buffer any shortfalls.

“Retailers have really invested
in creating a true multi-channel strategy and this is when it comes in
handy,” Mr. Krugman said. “If this had happened ten years ago, it would
be a lot worse.”

Discussion
Questions: How do you think last weekend’s storms affected holiday selling?
How can post-Christmas selling and online be used to the best advantage?
Overall, what last-days strategies do you think optimize holiday selling?

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12 Comments on "Snowy Weather Clouds Holiday Outlook"


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Bob Phibbs
Guest
11 years 4 months ago

Demand is still there. The storm for all but the Washington area was brief and it happened on the East Coast where they are prepared for snow. It made shoppers more harried but I doubt it truly hurt retail in large numbers. I wrote about how retailers should recover on my blog yesterday.

Joel Warady
Guest
Joel Warady
11 years 4 months ago

Maybe this question will sound naive, but if a retailer’s whole year of profitability can be sidelined by one weekend storm, isn’t there a bigger story at hand? What does this say about the health of the retailer, or retailing in general?

I think we have taken for granted this whole concept of Black Friday, the fact that retailers are not profitable for the year until the day after Thanksgiving. If all of the profit occurs after the Thanksgiving holiday, and runs right up to the end of the year, why don’t retailers keep their doors shut for 46 weeks, and simply open for the final six?

I think retailers need to get back to the basics, and attempt to make a profit on a monthly basis, each and every month. Then, when a bad storm comes, and foot traffic is down, it won’t destroy their whole year.

Too simplistic?

Doron Levy
Guest
Doron Levy
11 years 4 months ago

The snow could be used as another excuse to not spend money. Retailers are going to have to offer deals all the way up to closing on the 24th. These next couple of days will be critical as the digging out has only just finished. Can anyone say “Extended hours on Christmas Eve?”

Boxing Day and post-Christmas sales may offer some redemption but we are supposed to be stormy (here in Toronto anyways) from the 25th to the 27th, which could also prevent shoppers from coming out.

Merchants will have to work harder over the next few days to get people in through the doors. Have you ever seen an apparel retailer re-sell salt and shovels to get people in? Silly idea or is this what retailing is all about? I have seen it and it does work.

Paula Rosenblum
Guest
11 years 4 months ago

This has been sooooo overblown by the media.

– Are people going to tell their friends and relatives “Sorry, no gift for you…there was a snowstorm”?
– Apparently there was a similar (albeit not record-breaking) storm same time last year.
– Christmas is on Friday. That means people still have several days of brick and mortar shopping. Call that one a “lucky” thing.
– The storm happened way before the online shipping cut-off. What better way to spend a snowy day than to peruse eCommerce sites looking for gifts?

I think the impact will be negligible…but then, I’m an optimist.

David Biernbaum
Guest
11 years 4 months ago

Weather does have an effect on results. Even though most every consumer will purchase all the same number of gifts he or she planned, the lost opportunity will be from fewer extra sales and impulse purchases driven by traffic in the stores shopping the event weekends.

Mark Johnson
Guest
Mark Johnson
11 years 4 months ago

I think it makes it “easier” in this economic environment to say I am not going to shop because there was a snow storm.

Gene Detroyer
Guest
11 years 4 months ago

Joel Warady, your analysis is not too simplistic at all. I do not know what the trends have been over the last 50 or 60 years, but I am willing suggest that annual sales have skewed more towards those precious six weeks as the years have past, as retailers have continually looked for more volume and used promotion as their primary marketing tool. The promotions have focused on key selling periods and the result has been a skew that is counter to good merchandising and good profitable business.

As for the snowy weather…plenty of internet retailers extended their “free shipping” offers and arrival guarantees from Friday through the weekend. Be assured, many shoppers looked outside at the weather and turned to their computers. And many will find how easy it is.

Charlie Moro
Guest
Charlie Moro
11 years 4 months ago

At the end of the day, you need to remember it is “Christmas.” People are going to figure out how to get out to the stores, take advantage of online, leave work early and shop, or any other number of options. Yes, the snow was bad, but as you headed into the NY region, customers had the entire Saturday for shopping since the snow was mostly an overnight event.

The bigger question may be that after last year’s dismal sales, and this year’s flat sales in comparison, is frugal the new normal and will retailers in general be rethinking their offers and execution?

Mark Burr
Guest
11 years 4 months ago

The sky is falling! Oh wait, then there was Sunday, Monday, Tuesday, Wednesday and most of Thursday. But then again, the sky was falling–it was snow. It was expected. Folks knew it was coming. They knew it would pass. They knew they had a few buffer days to recover.

Any retailer using this excuse as the sole reason for their performance ought be launching a going-out-of-business sale on New Years’ Day. That might be a bit strong but you get the idea.

I think there are plenty of examples of retailers noted and not noted that were pretty nimble in reacting and creating an environment (no pun intended) and an opportunity for customers to shift their purchases. Winners, all in that area.

Roger Saunders
Guest
11 years 4 months ago

The folks that needed a “reason” to trim back, were provided with one in the communities that were impacted. Those are lost sales that simply will not come back. However, it probably represents a small percentage overall.

Holiday gifts that “need” to be purchased, will find a way under the tree.

Craig Sundstrom
Guest
11 years 4 months ago

“Still, many reports showed the sales over the weekend were solid across other parts of the country.”

There’s your answer; and I’m with ‘Scanner’ on this one: there’s always something “unexpected” somewhere–a snowstorm in the East, a rainstorm in the West, a Macadamia storm in the Tropics, etc. The only ones excited by this are the underperformers…and reporters.

Tim Henderson
Guest
Tim Henderson
11 years 4 months ago

The snow storms obviously slowed weekend shopping in the East. But as noted, merchants are doing plenty to keep shoppers shopping until the last minute, Christmas is on a Friday so there’s still plenty time for shopping and consumers are loathe to show up on Christmas day without gifts in tow. I’m in the East, got snowed in and I’ve been in the stores for the past 2 days doing last-minute gift shopping. I can confirm that the stores are crowded and so is my in-box–stuffed with offers aplenty for expedited shipping.

As for post-holiday shopping, I’d like to see more merchants working to get gift cards redeemed and redeemed for higher-ticket items, e.g., limited-time gift card redemption promos like free-shipping for e-shoppers or perhaps a percentage discount on a single item when purchased with a gift card.

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