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What’s In Retailers’ Stockings: An Extra Saturday

Wednesday, 21 Dec 2011 | 2:18 PM ET

The calendar gave retailers a gift this year, an extra Saturday for shoppers to hit the malls before the holiday season. Retailers are working to make the most of it.

Already, many are expecting this holiday season will be better than originally expected. At least two industry watchers, the National Retail Federation and ShopperTrak, have increased their holiday sales forecasts.

Customer Lynn Leonard, left, and her daughter Meghan Leonard, 4, walk through the holiday decorations area at a Home Depot Inc. store in Charlotte, North Carolina.
Chris Keane | Bloomberg via Getty Images
Customer Lynn Leonard, left, and her daughter Meghan Leonard, 4, walk through the holiday decorations area at a Home Depot Inc. store in Charlotte, North Carolina.

The NRF, the industry’s trade group, expects to see a 3.8 percent, up from a prior forecast of 2.8 percent, while ShopperTrak on Tuesday raised its estimate to 3.7 percent from 3 percent.

Retailers have largely relied on advertising discounts and other deals to get people into the store, so there is some concern about whether retailers are gaining enough sales volume to make up for the lower prices.

“They really are banking pretty heavily on having an extra Saturday to meet the comps from last year,” said Jim Loughlin, managing director of Loughlin Management.

Loughlin said he is concerned that retail spending slowed in November and retailers have had to “discount early and often to get the consumer in.”

But some disagree, saying there were some signs that shopping continued at a brisk pace early in the month, even if the number of shoppers in the stores looked light.

ShopperTrak said it expects foot traffic in the stores to be down 2.2 percent because shoppers are doing more research online, on their tablets or on smartphones before they go to the stores.

Certainly, online and mobile sales have been growing at a brisk pace, but these channels still only represent a small slice of total retail sales.

FirstData’s SpendTrend, which is a macro-economic indicator based on aggregate same-store sales activity in the First Data Point of Sale Network, showed that during the first two weeks of December — a time that historically can see a lull in holiday spending — overall dollar volume growth was steady compared with November. Compared with last year, the news was even better: Growth was higher than the same period last year. However, the average ticket growth turned negative.

First Data suspects this is because of those bargain-hungry consumers. Trained to seek out bargains, consumers are making more frequent, but smaller-sized purchases. Still, it’s a healthy sign shoppers are willing to spend and they are also pulling out the credit cards more frequently, a sign that could reflect growing consumer confidence, according to FirstData.

US Retailers Banking on Extra Saturday: Expert
Jim Loughlin, managing director at Loughlin Management, told CNBC, "retail has slowed down a little bit, beginning in November, there are some concerns out in the retail world and they really are banking pretty heavily on having an extra Saturday this year."

It goes without saying this last burst of spending will be critical. According to a PriceGrabber survey, 43 percent of last-minute shoppers think the best deals of the holiday season can be found during the final days.

That may explain why 25 percent of 1,011 adults surveyed by Consumer Reports hadn’t even begun shopping for the holidays as of Dec. 18. A good chunk of the procrastinators — some 54 percent — blamed lack of money. Only 38 percent of procrastinators gave that excuse last year.

NPD Group also has been tracking shopping activity throughout the holiday season. Last week was the best week for brick-and-mortar stores in terms of shoppers activity shopping and making purchases since NPD began tracking it for holiday season.

“Brick-and-mortar shopping is expected to have a strong finish and be even stronger post-holiday,” said Marshal Cohen, chief industry analyst at NPD, in a press release. “Consumers are seeking the deal all season, and the deals are just now starting to shape up for some more dramatic discounts without the crazy hours to get them. The only issue will be…they won’t be the ‘pick of the litter,’ as retailers are already showing signs of broken stock on selected styles.”

That has been a big trend, retailers kept tight controls on their inventories so as not to be left with merchandise, but it is sometimes hard to find products, and those out-of-stock items mean missed sales.

Cohen said footwear, which may not have been thought of as a traditional holiday gift, is becoming one, especially items such as shearling boots. Book sellers also are doing well as consumers buy e-readers and tablets as gifts, he said.

Once everyone opens those new tablets during the holidays they can join the new shopping revolution: mcommerce. In the last nine months, the share of U.S. online retail dollars attributable to mobile devices has doubled from 1.87 percent in April of 2011 to 3.74 percent in December 2011, according to RichRelevance, a company that assists retailers with ecommerce sites.

The firm also tracked an increase in the portion of page views coming from mobile devices, with more than 15 percent of all shopping seasons occurring on mobile devices. This past April, just under 9 percent of all shoppers were browsing digital aisles via a mobile device, RichRelevance said. By December, the share has more than doubled, reaching 18 percent of all consumers.

Tealeaf, a software company that helps improve online and mobile experience, has worked with Crimson Hexagon to analyze the conversations consumers have been having on social media about mobile shopping.

According to Geoff Galat, Tealeaf’s vice president of worldwide marketing, one of the biggest trends to emerge with mobile shopping this holiday season appears to be mobile multi-tasking, or consumers mobile shopping while shopping at a physical store, in class, or out running errands.

Tealeaf’s survey also showed large numbers of online conversations (about 41 percent of those over the past weekend) focused on frustrations consumers were having making their transactions. Although mobile retail sites and apps have come a long way in the past years, retailers will need to revisit this in the coming year.

However, in these final days of the shopping season, mobile and online will likely play less of a role because it will be harder, or more expensive, for retailers to ship gifts in time for the holiday.

Questions? Comments? Email us at consumernation@cnbc.com. Follow Christina Cheddar Berk on Twitter @ccheddarberk.

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