What You Need to Know About Holiday Sales

Smart Buying

What You Need to Know About Holiday Sales

With toy recalls, economic fears and the absence of a must-have toy, retailers hope to entice shoppers to hit the stores early this season.

1. Retailers to consumers: Please, please shop. With home values falling, energy costs rising, credit tightening and consumers seemingly anything but confident, analysts are predicting the slowest holiday sales growth in five years. So despite an extra shopping day this season, nervous retailers are enticing shoppers to hit the stores early. Wal-Mart fired the opening salvo in early October with price cuts on toys, and other retailers were running low-profile promotions ahead of the traditional selling season. But that's only the beginning. "Retailers are going to have to come up with really wacky prices to get the consumer excited," says Britt Beemer, chairman of America's Research Group, a marketing-research firm. "It's going to be a great year to get great deals."


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2. The weather's been hot, the gadgets are not. Unseasonably warm fall weather didn't help anyone get into the holiday-shopping spirit this year. Women's apparel, a perennial list topper, is getting the cold shoulder. Retailers are also uneasy because there are no real blockbuster items driving people to stores this season, and impulse spending is predicted to be down, according to a survey by NPD Group, a consumer-research firm. On some "hot gadget" lists are the iPod Touch, the iPhone, monster flat-screen TVs, digital photo frames and portable DVD players. (Yawn.)

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3. Kids are jaded. Children aren't clogging Santa's in-box with urgent requests. Toy retailers will promote their gotta-have lists, and recalls of made-in-China toys have spawned dire warnings of shortages. But the fact is, kids aren't excited about anything in particular. Beemer interviewed parents to see whether their children were lobbying for a specific gift. Some 58% said no, up from 33% last year. No wonder. One new product guaranteed not to hit kids' radar screens is the Smart Cycle from Fisher-Price, on which youngsters play learning games while riding a stationary bike. Big woo. Among the toys making a blip is Barbie, but she's on the hot list every year. Translation: You won't have to elbow your way through hordes of crazed parents for this year's version of the Cabbage Patch doll or Tickle Me Elmo.

4. You just can't go wrong by giving 'em plastic. One bright spot for retailers is gift cards, which now account for about 10% of holiday spending. "People use them as a backstop, in case they can't find a gift," says Kevin Regan, a retail expert with FTI Consulting. Gift cards avoid the "Oh, this tie is so, uh, interesting" syndrome and cut down on day-after-Christmas returns, which are getting more difficult anyway. Now there's even a secondary market for trading gift cards, at sites such as Cardavenue.com and Plasticjungle.com.


5. Web shopping beats Black Friday. Nearly 40% of holiday shoppers buy online -- a number that grows each year -- so expect free-shipping and quick-delivery promotions. (L.L. Bean started offering free shipping back in September.) Still afraid you'll miss out on the best deals at the mall? Join the 5 a.m. early-bird frenzy the day after Thanksgiving if you want to, but get a leg up on the crowds. Sites such as Black-Friday.net alert you in advance to the ads printed in Thanksgiving Day newspaper circulars, plus you'll find links to the products online so you don't have to wait outside in the dark.