Black Friday Sales Hits Record, Retail traffic and Foot-falls up.

Preliminary reports for Black Friday indicate that retailers may have seen their strongest sales ever during the all-important kick-off to the holiday shopping season.

black friday sales

Retail sales on Black Friday climbed 6.6% this year to an estimated $11.4 billion, according to ShopperTrak, which tracks foot traffic at malls and stores. Last year, sales climbed just 0.3% to $10.7 billion, which was a record one-day sales amount at the time, according to the company.

“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,” said ShopperTrak founder Bill Martin. “Still, it’s just one day. It remains to be seen whether consumers will sustain this behavior through the holiday shopping season.”

However, sales have been strong throughout the entire month of November with retailers rolling out holiday deals earlier than ever. In the two weeks leading up to the week of Black Friday, retail sales were up 3.6% and 3.8%, respectively, ShopperTrak reported.

“Retailers continue to stretch out Black Friday weekend by enticing shoppers with doorbuster deals weeks in advance,” said Martin.

Online sales have also proven to be strong, with many big-box retailers and department stores offering deals online earlier this year.

Black Friday online sales surge 24%

Online sales were up 39.3% on Thanksgiving Day and 24.3% on Black Friday compared to the same days last year, according to IBM’s (IBM,Fortune 500) Coremetrics, which tracks real-time data from 500 retailers in the apparel, department store, health and beauty and home goods categories.

“This year marked Thanksgiving’s emergence as the first big spending day of the 2011 holiday season with a record number of consumers shifting their focus from turkey to tablets and the search for the best deals,” said John Squire, chief strategy officer at IBM’s Smarter Commerce division.

Consumers also spent slightly more than they did last year, although they spent most of that money on themselves. According to NPD Group consumers spent about 3% more on purchases during Black Friday. However, about 44% were self purchases up from 33% last year, the research group said.

Retail traffic on Black Friday up 2%

Total US visits to the top 500 Retail websites increased 2% on Black Friday as compared to 2010 and received more than 173 million US visits. Traffic has increased each day leading up to the Thanksgiving holiday and the total visits dipped slightly (-1%) on Black Friday compared Thanksgiving Day 2011. Early Black Friday sales resulted in a shift of online traffic, which climbed prior to the Thanksgiving holiday, however, continued heavy promotional activity helped to drive significant online traffic on both Thanksgiving and Black Friday. While Black Friday has been the top day for online retail traffic over the past two years, warm weather and early store openings encouraged shoppers to go online sooner this season.
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Among the categories driving the growth in traffic on Black Friday were Department Stores (e.g. Amazon and Wal-Mart) Apparel & Accessories, Appliances & Electronics (e.g. Best Buy) and Video & Games (e.g. Game Stop).
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Below is a list of the top visited retail sites on Black Friday:
DMS Retail 500 Sites 11-25-2011.png

Many of the major retail websites experienced growth on Black Friday, including Amazon, Best Buy, JC Penney, Sears and Kohl’s. Amazon.com was the most visited website on Black Friday for the 7th year in a row.

Stores play on politics for sales

Gap, Wal-Mart hope election season can jolt consumer spending

With the start of the Democratic National Convention in Denver on Monday, retailers, faced with the toughest economic environment in years, have latched onto the presidential election as a vehicle for jump-starting sales.

Among the first to step into the fray: Wal-Mart Stores Inc. and Gap Inc.

Gap, the San Francisco-based apparel chain, is resurrecting its legacy white T-shirt with a nationwide “Vote” campaign. The rollout began Friday in Chicago at the Gap’s Midwest flagship on North Michigan Avenue, where makeshift voting booths lined the storefront.

Inside, shoppers lined up for free white T-shirts with the words “Vote for _____.” A clerk filled in the blank according to customers’ wishes using a T-shirt press. Shoppers have their pick of an array of press-on letters, markers, buttons and patches.

What are shoppers voting for? It’s not all Obama and McCain. Some are voting ice cream or lower gas prices or, simply, change.

The store had 300 T-shirts at 9 a.m. They were gone by 1:30 p.m. Gap’s seven-city tour moves to Philadelphia on Tuesday and runs through Sept. 11.

At the same time, Wal-Mart, the world’s largest retailer, is launching a series of television ads during the Democratic and Republican National Conventions.

The 15-second ads focus on the economy, gas prices and health-care costs, and they pitch Wal-Mart as a place to save money. The first ad airs Monday and is slated to run through Sept. 7 on cable network news and talk shows focused on election coverage.

Meanwhile, a new survey found that when asked to vote as if the election were today, shoppers that favored Wal-Mart, Kohl’s and J.C. Penney are more likely to vote for Sen. John McCain, while Macy’s and Target shoppers say they would cast their ballot for Sen. Barack Obama.

The survey, released Monday from Worthington, Ohio-based BIGresearch, also found that while Wal-Mart and Penneys shoppers favored McCain, the group was fairly evenly divided between Republicans and Democrats. Kohl’s shoppers, on the other hand, tended to fall more squarely in the Republican camp. Macy’s and Target shoppers were more likely to call themselves Democrats.

“Perhaps McCain should consider a bus tour through Wal-Mart parking lots, and Obama could use Target,” said Gary Drenik, president of BIGresearch.

How bad is it? Retail guru Mickey Drexler, dubbed the “King of Cool” on the cover of Fortune magazine’s Sept. 1 luxury issue, tells the business publication that the current retail environment is the worst he’s seen during his 40 years in the business. The CEO of J. Crew and master merchant also says the days of big-name designers are over.

“Designer goods have become much too available, either through their own distribution or through logo counterfeiting,” he told the magazine. “I see the world moving away from carrying a bag around with the designer’s initials or designer’s logo. The more you see of anything, the less special it becomes.”

Retail: Back to Marketing basics

Merchants are going back to basics—cutting prices, broadening product lines, and even teaming up
Whenever the economy slackens, America’s shopkeepers slash prices and pray for consumers to pull out the plastic. Once again, retailers are doing their part, although perhaps with more zeal than usual. Discounts are deeper than they were a year ago. Nordstrom has slashed prices, starting at 40%, vs. 33% last year. Sales have begun earlier. Saks Fifth Avenue opened its first big sale in April, rather than May. And loyalty programs are getting sweeter. Neiman Marcus just handed out $200 gift cards to those who spent $500 or more.

Of course, this is no ordinary downturn. Yes, tax rebates from the federal government pushed retail sales higher in May than many economists had expected. But consumers will be paying lofty prices at the gas pump and supermarket long after the stimulus checks stop arriving. That leaves less for discretionary buying. “Moms who used to buy every member of the family their own brand of shampoo are buying one big cheap one,” says Sheila McKusker, who notes that, in 20 years of tracking the retail industry for market researcher Information Resources, she’s never seen such a profound or sudden shift in shopping behavior. In May, consumer confidence hit its lowest level since 1992.

Cutting prices may not be enough to get people into stores. So while Lowe’s is offering low-cost versions of Shop-Vacs and air purifiers, the home-improvement chain has also launched an advertising campaign to reposition itself as something that looks a lot like the local hardware store (the very mom-and-pop shop that Lowe’s and Home Depot helped drive out of business). In one TV commercial, a father and his sons marvel as a Lowe’s employee cuts duplicate house keys.

In many cases, retailers are going after a different customer altogether. Earlier this year, Gap’s troubled Old Navy chain began pitching trendier clothing at twentysomethings. Sales continued to tank, and the retailer is refocusing its message on price. Now the ideal customer is the budget-conscious mom shopping for herself and the family. Unlike this spring’s safari- and surfer-themed clothes, the fall line will include more basics, and TV ads now emphasize price over style.

Saks Fifth Avenue, too, is focusing more on value. This fall, the upscale department store will reintroduce a private-label line for women in their 40s and 50s. Called Real Clothes, the skirts, blouses, and dresses will be priced 20% below the store’s average brand-name items. “For a high-end customer, it’s not about a trade-off between food [and] gasoline,” says Saks CEO Stephen I. Sadove, “[but] how they feel about their net worth.” He also notes that, during tough economic times, consumers expect better service, too. That’s why Saks is putting more of its sales staff on commission—the better to compete for shoppers’ affections.

As they seek to hang on to existing customers and attract new ones, retailers are teaming up. In May, Macy’s announced it would partner with FAO Schwarz to bring toys back to its stores. Over the next two years, Macy’s will put an FAO Schwarz inside 685 of its locations. “If gas prices continue to rise, being in Macy’s is a really smart move,” says FAO Schwarz CEO Edward M. Schmults. “Customers aren’t going to want to drive to five different places looking for products.” The partnership also allows Macy’s to lease excess space and gives the toy retailer access to millions of new shoppers.

J.C. Penney is using an existing partnership with Sephora USA , the cosmetics and fragrance merchant, to go after freer-spending consumers. Sephora has opened boutiques inside 72 (of 300 planned) Penney stores, catering to 18- to 35-year-old women who typically spend more per item than Penney’s traditional base of middle-aged moms. Penney CEO Myron E. Ullman III says he’s discounting to keep his regulars buying while Sephora lures those willing to pay full price for new products.

Even as stores scramble to broaden their appeal, they are minding their core customers. Rite Aid is offering a $30 gift card and a chance to win a year’s worth of free gasoline to customers who transfer their prescriptions to the chain . Target is pushing its cheaper private-label food and beverages. And Saks in April rolled out no-interest loans on top-drawer jewelry. As Saks CEO Sadove says: “The high-end consumer likes a deal like everybody else.”

by Jane Porter and Burt Helm

Penney aims for upgrade with brand launch with Polo Ralph Lauren

NEW YORK – The U.S. economy may be stumbling, but J.C. Penney Co. Chairman and CEO Myron “Mike” Ullman III believes its biggest brand launch ever an exclusive line with Polo Ralph Lauren Corp. couldn’t happen at a better time.

“We think given this competitive climate, we are very well positioned to take market share,” Ullman said in a recent phone interview with The Associated Press.

The brand, American Living, is expected to be a billion dollar business in the next few years, accounting for 5 percent of the department store chain’s annual sales, Ullman said. It spans 40 categories, from women’s and men’s clothing to home furnishings, shoes and luggage.

The merchandise, which started arriving in stores over the past few weeks, reflects the Ralph Lauren aesthetic pink cotton polo shirts, floral bedspreads and madras shorts, for example.

“American Living will lift the overall look and feel of the store,” Ullman said. Women’s blazers under the American Living brand retail for about $160, while dresses are priced at about $100. That’s about 15 percent higher than the department store’s top tier clothing brands like Liz & Co. and Jones Wear.

“It helps diversity our business by reaching customers and new channels of distribution,” said Roger Farah, president and chief operating officer of Polo Ralph Lauren, in an address to investors Wednesday. As part of the alliance, Global Brand Concepts, a new division of Polo Ralph Lauren, owns the trademark for the brand and oversees the design, sourcing and production, while Penney’s owns the actual product and is responsible for inventory and the selling of the merchandise.

Since taking over the helm in 2004, Ullman has spearheaded a store expansion plan while developing more upscale, exclusive labels with designers like Nicole Miller and home furnishing expert Chris Madden.

Last year, the Plano, Texas-based company launched a store label lingerie brand called Ambrielle, which has been successful.

Penney’s has also scored with its Sephora cosmetics shops within its stores. Such initiatives have helped the department store steal market share away from rivals like Macy’s Inc.

In particular, J.C. Penney is aiming to lure younger, trendier customers to its stores. While Ullman noted that half of American households are Penney’s customers, its most underserved market is the 18- to 35-year-old age group.

“Penney’s has done an excellent job with their brands; they have been better than most stores,” said C. Britt Beemer, chairman of America’s Research Group.

Still, Penney’s, which caters to middle-income shoppers, saw its overall business slip starting last fall amid a deteriorating economy; it reported a drop in third-quarter profits in November. On Thursday, the company, along with other major retailers, reported weak sales in January at stores that have been open at least a year. Still, the chain’s 1.9 percent same-store sales decline in its department store business was better than the 6.3 percent drop that Wall Street estimated. Penney’s is expected to report its fourth-quarter financial results Feb. 21.

Ullman said that the weakest categories have been window treatments, furniture, jewelry and dress-up clothing. At the same time, he noted that Sephora, which is not heavily discounted and is considered “an aspirational” purchase, was one of the most successful areas this past holiday season.

Ullman noted a “precipitous change in consumer sentiment” last fall. And he believes that certain parts of the country like Florida and the Nevada, both of which have been among the hardest hit by a housing slump, are in a recession. To prepare for the slowdown, Penney’s is becoming more cautious about its inventory and scaling back store expansion. The company will open about 10 fewer stores out of the 50 planned for each of 2008 and 2009.

Still, Ullman emphasized that the economic slowdown is a time to come out with exciting new merchandise. With the American Living brand, Penney’s plans to add new categories like women’s outerwear and infant clothing for fall and will unveil large and petite sizes for spring of 2009. The merchandise will be available online at jcp.com on Feb. 19.

“When people find something they like, they respond to it,” Ullman said. Even in tough times, “it’s a reason to come to the stores,” he said.

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