In the face of recent market surveys revealing consistently downbeat prospects for the holiday shopping season, Minnesota’s big national retailers, Target and Best Buy, are taking nothing for granted as they gear up for the crucial retail period.
Target is starting its holiday promotions early, aggressively cutting prices on some popular toys and best-selling books and offering free shipping to some online shoppers. Best Buy is using Twitter, Facebook and a separate teen-oriented website to reach out to younger shoppers.
But the two mega-retailers have decidedly differing approaches in how they talk about their expectations. Gregg Steinhafel, Target’s chairman and CEO, issued an upbeat outlook for the third quarter that just ended and will be reported later this month. But he is less upbeat about the coming holiday shopping season. “We remain cautious in our expectations for fourth quarter results,” he said in the statement.
Best Buy CEO Brian Dunn struck a more optimistic tone at a recent Media Day event outlining his firm’s holiday season plan. “We are hiring more people this year for seasonal sales than we did last year. We’re going to have better year-over-year performance this year than we did last year. We are trusting the trends we see,” he said.
But retailers are facing a decidedly cautious consumer, according to several recently release surveys. The National Retail Federation survey of 8,431 adults revealed U.S. consumers plan to spend an average of about $682 on holiday-related shopping, a 3.2 percent drop from last year’s $705.
Two-thirds of Americans (65.3 percent) say the economy will affect their holiday plans this year, with the majority of these consumers saying they’re adjusting by simply spending less (84.2 percent). People also will be shopping for sales more often (55 percent), using more coupons (41.7 percent) and putting up last year’s decorations (34 percent). Many Americans also will make changes in gift-giving, planning to buy more practical gifts (36 percent), buying a joint gift for kids or parents (17.3 percent) and making more gifts themselves (16.7 percent).
That glum shopping outlook was echoed by two other recent surveys. A Consumer Reports survey of 1,000 adults found two-thirds of U.S. adults plan to spend less this holiday season and 6 percent say they still are carrying debt from last year’s holiday purchases.
Chicago-based market researcher Performics found a similarly cautious outlook in a survey of 300 online shoppers with 60 percent expecting to spend less this holiday season, 30 percent planning to spend the same and only 6 spending more. More women (66 percent) plan to spend less this year, but fewer than half (48 percent) of men reported the same intentions to cut spending, according to the survey. The online shopper survey also found that nearly one in five shoppers had begun their holiday shopping in September.
Also trying to jump-start the holiday shopping season, Target.com kicked off its holiday free-shipping promotion on Sunday, two weeks earlier than last year. The effort covers more than 100,000 online items when shoppers spend $50 or more. In addition to expanding the number of items available for free shipping by 50 percent this holiday season, Target.com also will offer a 15 percent discount on all furniture orders of $125 or more through Dec. 20.
In addition to traditional advertising media, Best Buy is trying to reach a core market, teen buyers, through social media such as Facebook and Twitter as well as a separate website focused on young shoppers. “That’s where they are. Let’s go find them,” said Barry Judge, chief marketing officer at Best Buy.