Surveys are predicting more shoppers in the malls this holiday season and a 4.1 percent rise in holiday spending. That’s the good news. The bad news is that, once again, such surveys don’t predict margin and if those shoppers gravitate only to the lowest margined items, a retail CFO’s Christmas may be markedly less merry.
More shoppers are demanding additional perks from physical chains, which is going to hurt margins, Bloomberg reports.
“Consumers frequently look for deep discounts before making a purchase, and they already know what they want ahead of time. That means they’re not as easily swayed by time-honored retailer tactics, such as luring customers with store displays and encouraging impulse buys,” the Bloomberg story reported. “To get an edge, Target is offering free shipping on all orders for the first time. And Toys “R” Us Inc. sweetened its loyalty program, offering as much as $10 for every $125 that shoppers spend.”
The litany of retail woes continue. U.S. wages are relatively stagnant, Ebola jitters are discouraging mixing with large crowds and Americans are making fewer trips to shopping centers, the story noted. And even though has have fallen to the lowest price in years, mall foot traffic dropped 3.1 percent in September.