CHICAGO — September had barely started, but that didn’t stop retailers from talking Christmas: Wal-Mart said it would kick off its holiday layaway promotion just two weeks after Labor Day – a full month early. A few days later, Toys R Us and Kmart said they’d do away with layaway fees altogether.
Fretting that a presidential election, rising energy and food costs as well as ongoing job fears could cause consumers to tighten their purse strings, retailers are drumming up ways to convince them to shop early and often.
They’ll spend the next few months vying for shoppers’ attention and dollars for all-important holiday sales, which make up roughly 25 percent of their yearly profits, according to the International Council of Shopping Centers.
By launching promotions while it’s still hot outside, retailers are making a calculated move to stay in front of consumers and lock in their loyalty early, say retail experts. Early estimates from ShopperTrak predict a 3.3 percent gain this year from last. Foot traffic in stores, down last year, is expected to pick up 2.8 percent.
That’s a brighter forecast than the 3 percent gain predicted for //last year’s holiday shopping season, which ended up as a mixed bag for retailers. Many scratched out sales gains of 3.4 percent year-over-year, according to Thomson Reuters. But that was bolstered by deep discounts.
“Consumers only have so many dollars they are going to spend at this point,” said Megan Donadio, retail strategist at Kurt Salmon in New York. “By getting out there and letting people know about layaway plans, they (retailers) are making sure they are in the front of consumers’ minds.”
Plus, if consumers start spending earlier, they’re more likely to spend more if they aren’t rushed by a holiday deadline, added Edward Fox, associate professor of marketing at Southern Methodist University’s Cox School of Business in Dallas.
The big question, of course, is whether shoppers will cooperate.
Willetta Bell certainly plans to. A frequent participant in Kmart’s layaway program – she is currently paying on a 50-inch television, a gas grill and some jewelry – the Chicago resident said the retailer’s offer to waive its $5-$10 nonrefundable enrollment fee through Nov. 17 would help her get an early jump on holiday shopping for her nieces and nephews. “That’s exciting because … layaway helps me out. It helps me budget and get the things I need due to the economy,” she said.
An extra week
Overall, retail sales this year have been bumpy. Consumer confidence has been low and employment gains uneven. Robust back-to-school sales, however, gave a number of retailers a boost, with a nearly 6 percent gain in August, according to research firm Retail Metrics.
Working in retailers’ favor: They’ll have more time this year to complete sales. In 2012, the calendar dictates that the holiday shopping season will last five weeks instead of the typical four – kicking off officially on Black Friday, the day after Thanksgiving.
That should give retailers an extra boost since many shoppers aren’t likely to get started until after the election, according to Chris Angell, ShopperTrak’s director of global marketing.
Analysts also are betting on an uptick in online shopping this year, namely in electronics and appliances, as shoppers continue “showrooming” – browsing retailers’ brick-and-mortar stores for items, then searching online for the best deal.
Retailers expected to do well this season will combine the best of their online strategies with their in-store business, persuading shoppers that they’ll find the best deals no matter how they like to shop or pay.
Toys R Us announced its big service play on Wednesday by promising a reservation list for this year’s hot toys. It also unveiled a ship-to-store program, allowing customers to order items in-store, from mobile devices or at home – then pick them up at their local stores.