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Seamless! Why this buzz word may save retailers

Friday, 13 Dec 2013 | 9:44 AM ET
Where consumers are spending their money
Friday, 13 Dec 2013 | 7:11 AM ET
Steve Sadove,Saks former chairman & CEO, provides an inside look at this holiday shopping season. People are clearly moving to the internet, says Sadove.

With the continued explosion of Internet shopping this holiday season, retailers need to stop thinking about consumers buying either online or in the stores.

It's now both.

"The channels are becoming blurred," former Saks boss Steve Sadove said on CNBC's "Squawk Box" on Friday. "People used to think the Internet is going to take over and stores are going away. Now what's happening is it's seamless. People want anytime, anywhere."

(Read more: Middle class buyingluxury again—but at a bargain)

Bon-Ton Stores CEO Brendan Hoffman echoed those sentiments. "We're trying to make it seamless. We don't really care how they shop, how they return, or how they engage with us."

While ramping up its website, Bon-Ton has kept its store count constant this year. "The website is clearly our fastest growing channel," said Hoffman, adding that he's tapping into his experience running neimanmarcus.com.

Crunch time as holiday approaches
Brendan Hoffman, Bon-Ton CEO, reveals how his company is attracting consumers this shortened holiday season. Our website is our fastest growing channel, says Hoffman.

But as retailers strive for this "seamless" experience, mall owners can't just give up. "People still love going to a mall. One of the things that we have to learn is that it's not just about the product," Sadove said. "It's about the experience the consumers is getting."

Nobody knows that better than Steven Tanger, chief executive of Tanger Factory Outlet Centers.

"Consumers love to buy direct from the manufacturers. And we are the place where they can do that," he said. "It's a social experience. It's all about the lifestyle. We have restaurants and fountains and free Wi-Fi to entertain the nonshopping spouse."

(Read more: Amazon to launch Pantry to take on Costco, Sam's)

Mall expansion has been recently static, and Tanger sees opportunity in that trend. "There's only about 160 to 170 factory outlets in the entire country, compared to 1,100 regional malls."

Tanger CEO with the outlook on outlets
Steven Tanger, president and CEO of Tanger Factory Outlets, discusses this season's holiday shopping trends.

"There's only about 70 million square feet of outlet space, compared to a billion square feet in regional malls," he continued. "We have a long runway of growth ahead of ourselves."

Tanger also said it's all about the brands. "If you look at some of the profits of our wonderful tenant partners like Coach and Michael Kors and Polo and Under Armour, you can go down the list. You'll see they're very profitable in the outlets and continue to grow there."

(Read more: Let it snow! Determined shoppers will 'find a way')

Bon-Ton's Hoffman is also going after those desirable brands. "We just launched Ralph Lauren last month. We just launched Michael Kors and Coach a few months earlier."

As for the consumer, Hoffman said, "I think she's certainly feeling a little bit better than she was in the spring."

Sadove—who's also a current board member of J.C. Penney—wasn't as sanguine. "There's a concern and a malaise with the consumer."

Congress delivers early holiday gift to retailers
Matthew Shay, National Retail Federation president & CEO, and Steve Sadove, former Saks chairman & CEO, discuss how the budget deal will likely impact retailers and consumers. Also a look at the holiday shopping season. Retailers have a lot of inventory out there, says Sadove.

"Even though unemployment is coming down, the job creation is a lot in the service sector where they're not as high wages," he continued. "People are looking for deals."

(Read more: Holiday sales suffer as the rich spend less: CNBC survey)

That's not a surprise to Matthew Shay, president of the National Retail Federation, because he's been monitoring what he called the two-track economic recovery. "There's that segment that's doing really well. There's that other segment of the population that doesn't feel so good about things."

So far that's translating into a rather tepid holiday shopping season.

The federation estimated sales fell by 2.7 percent during the full Thanksgiving weekend to $57.4 billion. The average shopper spent $407.02, off nearly 6 percent because of lower prices.

By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.

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