Posts Tagged ‘Target’

Black Friday Sales Bring Holiday Cheer to Nation’s Retailers

Tuesday, December 4th, 2012

Black Friday holiday sales set a record in 2012 with 247 million shoppers visiting the malls or shopping online. That’s 21 million more people than in 2011.  Total sales topped $59.1 billion.  The typical holiday shopper spent $423 over the weekend, a $25 increase over the $398 recorded last year.  The National Retail Federation (NRF) defines the “Black Friday weekend” as the Thursday, Friday, Saturday and Sunday after Thanksgiving.  One of the big stories is that online spending alone soared past the $1 billion mark for the first time ever, according to comScore.

Cyber sales rose 26 percent compared with one year ago, when shoppers spent $816 million.  This year, the average online shopper spent $172.42 over the Black Friday weekend, nearly 40.7 percent of their total purchases.  Of online shoppers surveyed by NRF, 27 percent reported making purchases on Thanksgiving Day, while 47.5 percent shopped on Black Friday itself.  Amazon.com was the most-visited retail website, followed by Wal-Mart, Best Buy, Target and Apple.

Retailers’ door-buster specials drew shoppers to the stores.  “There’s no question that millions of people were drawn to retailers’ aggressive online promotions this weekend, making sure to research and compare prices days in advance to ensure they were getting the best deal they could,” said BIGinsight Consumer Insights Director Pam Goodfellow.  “However, with shopper traffic increasing at department, discount, and clothing stores over the weekend, it’s clear that consumers still recognize Black Friday as one of the biggest in-store shopping days of the year, as they have for decades.”

The NRF had forecast that worries over the possibility of the fiscal cliff and the anemic jobs market might put a damper on holiday spending.  Its guesstimate is that holiday spending will rise just 4.1 percent this year, compared with 5.6 percent in 2011.  A survey by ShopperTrak found that 307.57 million Americans shopped in stores, a 3.5 percent increase over last year.  Bill Martin, ShopperTrak’s founder, is more optimistic.  He notes that store traffic hasn’t reached this level since 2006, possibly marking a return to pre-recession levels and could be a sign of recovery.  “We’ve seen that consumers are willing to shop a few extra stores,” Martin noted.  “This could translate into more impulse buying and stronger sales.”

Burger King’s New Slogan? – “We Deliver for You”

Tuesday, May 8th, 2012

Couch potatoes of the world can find something new to cheer about.  If sitting at the drive-through at your local Burger King isn’t working for you,  a few stores in Virginia and Maryland are now home delivering meals — for a $2 charge on a minimum order of $8 to $10.  Burger King is is trying out home delivery in an effort to boost slumping sales and regain its position as the nation’s # 2 fast-food giant.  This is of an experiment, chains usually use discounts and other incentives at the start of the year to counter a seasonal sales slump.

During the fall, the Miami-based chain started testing delivery at four restaurants in the Washington, D.C., area. The company plans to expand the test to 16 more locations before deciding whether or not to make it a large-scale effort.  Customers can order online or by phone.  Although home delivery is widespread for some fast foods — like pizza — it is much harder to do with burgers and fries can get soggy very quickly, so fast delivery is key.   Jonathan Fitzpatrick, the chain’s chief brand and operations officer, notes that Burger King has developed new packaging technology “which ensures the Whopper is delivered hot and fresh, and the french fries are delivered hot and crispy.”

“There are some real food-quality issues here,” said Ron Paul,  president of the research firm Technomic. “But there’s no question that consumer expectation for having things delivered has risen.”  In some markets, Amazon.com delivers books the same day they’re ordered. Groceries are being delivered more often. And retail giants, such as Target, even offered home delivery of fresh-cut Christmas trees.

To promote its home delivery, Burger King has established a dedicated web page that makes it easy for customers in the right area send in their orders.  Delivery is available between 11 a.m. and 10 p.m. and does not include breakfast food (including coffee), milkshakes or fountain drinks. The drivers will “try to deliver” within half an hour.

Writing for MSNBC, Marisa King notes that “Why delivery? Burger King has run a delivery service outside the U.S. for many years and has had great success with it all across the globe including in Mexico, Turkey, Brazil, Columbia and Peru, according to a company spokesman.” But another reason for Burger King’s foray into delivery service could be that it’s about to be unseated by Wendy’s as America’s No. 2 burger chain (behind No. 1 McDonald’s) for the first time since Wendy’s was founded in 1969.

According to Burger King, it will use “new delivery packaging technology, in conjunction with thermal bags,” that will keep deliveries fresh. In a major metropolitan area like New York City, delivery service from big box retailers down to the local corner bodega is all but expected.  Hundreds of restaurants have signed on to Web delivery services such as Seamless and GrubHub as a hassle-free way to transport food to customers’ doors. Grocery delivery sites such as Fresh Direct and MaxDelivery.com have thrived in the Big Apple as a convenience for busy shoppers who want to avoid crowds.

Carmen Lobello of Death and Taxes magazine, takes a more negative note.  “While totally unnecessary, given that pizza home delivery has been standard for years it’s almost a wonder it’s taken so long for burger joints to catch on. Though not quite. One of the main problems with Burger King’s food — other than taste and ingredients — is that there’s a huge difference between a fresh fast food burger and fries and one that’s been hanging out in a bag for thirty minutes. The moment the temperature of a BK meal passes from hot to room temperature, it transforms from food into garbage.”

Domino’s, whose business is 70 percent delivery, is watching  with a smile. “We wish them luck,” spokesman Tim McIntyre says. “There is a reason that not all pizza places deliver: It isn’t easy.”

2011 Black Friday Pays Off for Retailers

Monday, December 5th, 2011

A record 226 million Americans shopped in stores and online during the four-day Thanksgiving holiday, an increase from 212 million last year, according to estimates by The National Retail Federation (NRF).  These eager shoppers also spent more: The typical holiday shopper spent $398.62, an increase from the $365.34 reported last year.  Approximately 24 percent of Black Friday shoppers were waiting at stores for a midnight opening, a 9.5 percent increase when compared with 2010 when only a few stores were open at that time.  Some 37 percent of midnight Black Friday shoppers were in the 18-to-34 age group.  “Black Friday has evolved from an early morning shopping activity to a late night entertainment,” said Ellen Davis, spokeswoman at the NRF.  “A lot of people stayed up until 1 a.m. or 2 a.m. to go shopping, and then went to bed.”

Sales soared 16.7 percent over the same period last year to $52.4 billion, according to the NRF. “American consumers are taking a deep breath and making the decision that it’s okay to go shopping again, in spite of high unemployment and uncertainty over the stock market and housing market,” Davis said.

The results for the initial holiday shopping weekend are proof that retailers’ efforts to tempt shoppers during the weak economy are working.  Some like Wal-Mart and J.C. Penney are making a stronger push online to compete more effectively with rival Amazon.com.  Major chains like Macy’s, Target, Best Buy opened their doors at midnight on Thanksgiving evening instead of the pre-dawn Friday hours of years past.  The question remains whether retailers’ will be able to hold shoppers’ attention throughout the rest of the season, which can bring in 25 to 40 percent of a merchant’s annual revenue.  Americans remain driven by deep discounting and they’re conscious of their spending budgets.

Even as they spent money, shoppers said that with the high price of gas and other goods, this is not a good time to spend, according to the Bloomberg Consumer Comfort Index.  Retail sales grew a paltry 0.5 percent in October, slowing from 0.7 percent in September, according to the Department of Commerce.  In the weeks just prior to Black Friday, ShopperTrak reported sales had risen 3.6 percent during the week of November 12 and 3.8 percent during the week of November 19, compared to last year.

Analysts were surprised by the number of shoppers and the amount of spending; they had expected sales to be dampened by the nine percent unemployment rate, the high costs of gas and concerns about fiscal upheaval in Europe.  It is uncertain whether retailers will be able to maintain the early momentum for the rest of the season.  “One swallow does not a holiday season make.  After the deepest recession in decades, the solid Black Friday weekend is welcome news, but we’re only in the second quarter of a long playoff game,” said Craig Johnson, president of the consulting firm Customer Growth Partners.

According to ShopperTrak founder Bill Martin, “This is the largest year-over-year gain in ShopperTrak’s national retail sales estimate for Black Friday since the 8.3 percent increase we saw between 2007 and 2006.  “Still, it’s just one day. It remains to be seen whether consumers will sustain this behavior through the holiday shopping season.”

On the whole, holiday spending is expected to grow by a fairly small 2.8 percent to about $466 billion, according to the NRF.  For now, experts agree that retailers will likely have to continue to discount to get shoppers to spend.  “The big question is: How do you close the season?” said Hana Ben-Shabat, a partner at A. T. Kearney’s retail practice.  “This is a very promotional driven shopper.”

American shoppers spent $816 million on Black Friday without leaving the comfort of their computer chairs, a 26 percent increase over 2010, according to ComScore data.  The results reinforce numbers released by IBM Coremetrics that showed online sales on Black Friday grew by 24.3 percent compared with the same period in 2010.  Approximately 50 million shopped online Friday, a 35 percent increase over last year, ComScore reported.

“Each of the top online retailers generated significantly greater Black Friday activity compared to last year,” ComScore Chairman Gian Fulgoni said.  “Amazon.com once again led the pack, with 50 percent more visitors than any other retailer, while also showing the highest growth rate versus last year.  However, it is telling that the top multi-channel retailers also showed strong growth in visitors, demonstrating the importance of the online channel to the retail industry as a whole.”  Amazon, Wal-Mart and Best Buy all reported double-digit percentage gains over last year.

Retailers Making it Easier to Shop Until You Drop on Black Friday

Wednesday, November 16th, 2011

Black Friday – the day after Thanksgiving notable for its power shopping – just got longer as several leading national retailers announced plans to open at midnight. Instead of sleeping off that turkey coma, throngs of shoppers will be waiting in line at Macy’s and Target, both of which will open four hours earlier than normal.

“We’ve been looking at our hours and demand as the holiday approaches and we think the customer will respond,” Macy’s spokesman Jim Sluzewski said.  “In dollars and cents, it probably gives the retailers that are opening extra early another fraction of a day’s sales,” said Scott Rothbort, finance professor at Seton Hall’s Stillman School of Business.  “But it does engender publicity and in this environment that is very valuable.”

“People want to shop through the night,” said Martine Reardon, Macy’s executive vice president of marketing.  She said the expanded hours were in response to customers’ requests.  One year ago, Macy’s opened eight stores at midnight, and the rest at 4 a.m.  According to Reardon, the midnight openings were highly successful.

Retailers have been extending their Black Friday hours for several years; additionally they’re trying to outdo each other by announcing some of their best deals weeks in advance.  They also are responding to shoppers who strategize bargain-hunting weeks in advance.  Already, Black Friday circulars are starting to be leaked to deal sites like Blackfriday.com and Blackfriday2011.com. Just a few years ago, stores were secretive about their discounts and hours until a few days before Thanksgiving.

Some retail industry experts think the early openings are a bad idea. The news is not good for workers, many of whom are desperate for jobs.  “What these retailers have to worry about is: Are they going to have an employee revolt?” said retail analyst Britt Beemer, chairman of America’s Research Group.  “You could be pushing people to the limit of what they are willing to accept.”  Beemer’s research suggests this Black Friday will be the biggest ever, with 50 percent or more of consumers heading out to shop the day after Thanksgiving.  And for the sake of the craziest shoppers, this year’s deals should be worth losing sleep over.

Writing in the International Business Times, Cavan Sieczkowski said that “But with the current unstable economic climate, stores are planning ahead for Black Friday sales and hoping that an early start will allow them to capitalize on increased consumer spending. On Black Friday 2010, retail spending hit $10.69 billion in one day.”

“Consumers are really walking a tightrope here.  They don’t have much room and it’s easy for them to lose balance with very modest shifts in hiring, the cost of food and everything,” said Steve Blitz, senior economist, ITG Investment Research in New York.

Online Christmas Tree Sales Soaring

Wednesday, December 15th, 2010

Online Christmas Tree Sales Soaring

The annual ritual of heading to the local Christmas tree lot or cut-it-down-yourself farm is giving way to the age of the internet and online buying.   Even Rick Dungey, a spokesman for the National Christmas Tree Association, has joined the trend, saying “I point and click and it shows up on my front door.  For me, it’s a convenience.”

Retailers such as Target and Costco are jumping on the bandwagon, offering fresh trees online for the first time.  According to Target spokeswoman Jill Hornbacher, the online sales are seen as a convenience, particularly for people who live in cities.  Chub Lake Tree Farm, a northern Minnesota family farm, notes that 10 percent of their sales are now made online.  “It started by customer demand and we saw a niche there,” said Jim Whorton, who owns the farm.  “We have customers who’ve moved away to Texas or Nebraska or to the Twin Cities, or who like our trees and want to ship a fresh one to their families.”

Although tracking the number of Christmas tree sales is virtually impossible, a Harris Interactive poll shows that approximately three percent of the 28 to 30 million farm-grown trees are now sold online.  Dungey believes that having Target’s broad consumer reach is a welcome way to sell trees.  “It signals that retailers recognize that not all consumers are equal.  Whether you’re a big-box or a specialty store or a farm itself, good retailers realize they want a broad array of buyers.  Not everyone wants to buy a tree the same way,” Dungey said.

Target’s success with online Christmas tree sales demonstrates how competitive the holidays have become, according to Marshall Cohen, chief retail analyst with NPD Group.  “Is it bad?  Does it change the tradition of the holiday?  Absolutely yes.  But guess what?  That’s not the retailer’s issue.  The retailer’s job is to try to make your life better so you’ll spend more money.  If you want to go and cut a tree down, go ahead.”