New York: US retailers have little room for error in the fast-approaching and shortened holiday shopping season, a period that typically generates 30 per cent of annual sales.
A late Thanksgiving — the unofficial kickoff for holiday sales — has lopped six days off the gift-buying season. The battle for retail dollars is so fierce that even Uncle Sam will be delivering on Sundays in some locations this holiday season.
Amazon.com Inc announced just the other week that it would be the first retailer to partner with the US Postal Service to offer Sunday delivery from November 17 in the New York and Los Angeles areas as it looks to give shoppers more shipping options. In 2014, Amazon plans to expand the service, that will continue past the holidays, to other locations including Dallas, Houston and Phoenix.
In other responses to the shortest holiday shopping season in a decade, retailers have tested their websites more, started sales a month early and hired extra trucks and planes to make last-minute deliveries if bad weather shuts down malls.
“You don’t have much time to react if there’s a snafu in your distribution system, if your website fails or if your rivals get very aggressive with discounting,” said Michael Dart, a senior partner at consulting firm Kurt Salmon, where he leads the private equity practice.
The stakes are high as the holiday season accounts for about half the profits of many retailers. Sales forecasts for this year’s holiday retail season have been somewhat gloomy but they were issued before recent economic data showing stronger-than-expected growth in jobs and the broad economy.
ShopperTrak said in September it expected sales to rise only 2.4 per cent in November and December this year compared with increases of 3 per cent in 2012, 4 per cent in 2011 and 3.8 per cent in 2010.
Morgan Stanley said in October it expects this holiday season to show the weakest increase in sales since 2008 when the US economy was reeling from the recession.
Six fewer days between Thanksgiving and Christmas this year versus 2012 means less time for people to shop and for stores to respond if sales flop or weather prevents mall visits. Adobe Systems Inc, which provides digital marketing tools, said the shorter season could shrink retailers’ online sales by $1.5 billion.
“This year it’s going to be like lightning — it’s going to go very fast. Every single day is going to matter,” said Macy’s Inc chief executive Terry Lundgren.
Like many retailers, Macy’s is opening most of its stores on the November 28 US Thanksgiving Day holiday for the first time. Rivals J.C. Penney Co Inc, Kohl’s Corp and Sears also are opening at 8pm on Thanksgiving. Best Buy Co Inc is opening doors at 6pm, while Toys R Us opens at 5pm.
The short season is one reason that retailers have already started holiday-themed promotions, especially online. Almost half of retailers started promotions by November 1, and a quarter of shoppers had started shopping, according to a report by Experian Marketing Services.
The short, intense season means many companies are taking extra steps to ensure stores are stocked faster and websites are ready to handle any abnormal spikes in traffic.
Penney, under enormous pressure to return to sales growth this holiday season, has tweaked its supply chain so that holiday merchandise can get more quickly to its 11 “store support centers,” the last stop for merchandise before the store shelves. That should shave a week off the usual time it takes to get items into stores.
Sony Corp, which is selling a new PlayStation 4 game console, is leasing more temporary warehouses across the US so it can quickly replenish stores to avoid sell-outs.
GameStop Corp is working with United Parcel Service to make sure it can have on-the-fly access to more ships, trucks and planes to ship additional products, including the PlayStation and Microsoft’s Xbox, to stores or customers.
