Consumers Ride To Retailer's Rescue
Kyle is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
You can take our Thanksgiving holiday when you pry it from our cold, unemployed fingers.
That was the message anyway at over 100 Wal-Mart (NYSE: WMT) locations as employees walked out to protest the mega-retailer's encroachment on traditional American holidays. However, Round 1 goes to Wal-Mart, as consumers shook their heads, expressed solidarity, and then walked past the picket lines ready to shop and sign up for layaway plans. (Solidarity has its limits.)
Grey Thursday (Day 1): iPads.
According to IBM (NYSE: IBM) cloud-based analytics, online Thanksgiving Day sales increased by 17.4% and 20.7% on Black Friday. IBM also found that:
- Thanksgiving sales spending increased by 17.4% over last year, while Black Friday sales increased 20.7%.
- Apple's (NASDAQ: AAPL) iPad product line accounted for 10% of all online shopping and 88.3% of tablet traffic. A survey conducted by Barclay's found that Apple may exceed analyst's expectations, due to a holiday surge in iPhone5/iPad mini availability. Citigroup has initiated a Buy rating on Apple.
- Sales referred by social sites such as Facebook increased 35%.
- 24% of all consumers used a mobile device to shop, up from 14.3% last year.
Black Friday (Day 2):
(Black Friday, 2009 – at the height of the Great Recession)
The National Retail Federation estimated Sunday that 247 million shoppers browsed and bought during the Black Friday period, vs. 226 million last year, and spent an estimated at $59.1 billion, or about $423 per shopper, up nearly 13 percent from $52.4 billion during 2011’s Thanksgiving weekend.
Let's take a look at the NRF's breakdown by category:
- Department sales grew by 16.8% year over year.
- Home goods were up +28.2% percent increase in sales from Black Friday 2011.
- Apparel sales were up +17.5%.
- Health and Beauty sales increased 11 percent year YoY.
Cyber Monday (Day 3): Paradigm Shift
A new Nielsen survey asked consumers about their plans for both days, the unofficial kick-off to the holiday shopping season, finding that 82% of consumers do not plan on shopping on Black Friday this year.
(Source: Nielson Analytics)
In a survey by bargain shopping website Pricegrabber.com indicated that 47% of all respondents were waiting until Cyber Monday to do their shopping.
Time for Q & A.
Q: What do online consumers use as a reference?
A: 40% of those surveyed reported using newspapers and circulars for Cyber Monday sales, while 40% rely on social media sites like Facebook. (Take that, Google AdSense!)
Q: Okay, retail stores had a great weekend. What does that mean?
A: Higher than expected Q4 profits. Wal-Mart reported that this Black Friday's sales figures were “the best ever.” The retail giant processed 10 million transactions during it's 8 p.m. event, peaking at 5,000 sales per second.
Q: Why are so many consumers waiting until Cyber Monday to make their purchases?
A: Because it allows them to use Black Friday as a showroom room floor and then get the same items cheaper online. (It's nice to have a basis of comparison.)
Q: That iPad number seems high...
A: Only if you assume that Joe Sixpack had gotten over his crush on Apple just because of the Apple Maps fiasco.
Q: Shouldn't consumers be reigning in spending to the fiscal cliff? Higher taxes, you know.
A: Only if you assume that 4 years of consumers paying down debt doesn't result in a surplus of credit. In fact, according to the Federal Reserve's Board of Governors' G.19 statistical release, consumer credit increased at a seasonally adjusted annual rate of 4% in Q3 2012.
The American Consumer is riding to retailer's rescue. They'll need it: According to the National Association of Manufacturers (NAM), hitting the fiscal cliff will result a 10% decline in consumer spending by 2015, with retailers being among the most affected groups. At the moment, however, consumers are on a historical feeding frenzy, and the S&P500 is soaring above 1,400. If that's not a Christmas gift for investors, I don't know what is.
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