TOPICS > Economy

‘Black Friday’ Has New Tone Amid Recession

November 27, 2009 at 12:00 AM EST
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Kwame Holman has a look at how consumers are changing their shopping habits during this year's Black Friday because of the financial crisis.
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CROWD: Three, two, one!

KWAME HOLMAN: It’s become as traditional to Thanksgiving as leftovers and travel, the day-after shopping spree called Black Friday, based on retailers’ hopes their yearly balance sheets will go into the black.

TERRY LUNDGREN, CEO, Macy’s Inc: Black Friday is very important. It is really the start of the shopping season for retailers in America. And, so far, we are encouraged by the amount of traffic.

KWAME HOLMAN: The day is dominated by bargain-hunters, who were out before dawn today.

SHOPPER: We got here at 1:00 p.m. on Thanksgiving Day, so we have been out here for like 15 hours.

SHOPPER: Usually, we do the 6:00 a.m. thing. But, this year, we tried to the do the midnight, and I was shocked at how many number are here.

KWAME HOLMAN: Marking the unofficial start of the holiday shopping season, stores herald slashed prices on almost everything, with special emphasis on electronics, clothing, books, and toys.

For retailers, it offered hope this holiday season would be better than last year. Sales in recession-crippled 2008 were down almost 3.5 percent, one of the worst on record. The National Retail Federation estimates some 134 million people will jam stores this weekend, with even more in the virtual rush, shopping online.

The industry group predicts another 1 percent drop in sales this season, but better days ahead.

Scott Krugman is a Retail Federation spokesman.

SCOTT KRUGMAN, spokesman, National Retail Federation: Things are finally starting to stabilize in the retail industry. Although we’re not at a full recovery, it clearly demonstrates that the consumers are slowly coming back, and just in time for the holiday season.

KWAME HOLMAN: Krugman says, consumers are returning with caution.

SCOTT KRUGMAN: They’re clearly going in with a budget. They’re looking for sale merchandise.

KWAME HOLMAN: That was evident at the Quail Springs Mall in Oklahoma City in reactions gathered by our colleagues at public station OETA.

JILLIAN JARFFIGNA, shopper: Well, in the past, you know, you would just go out, and I would just spend anything in pocket, you know? And now you really — you really have to stop and think, is this going to be something that is a necessity now that will, for the next year, be used?

TIM KNOX, shopper: We definitely look at toys that will last for a while. But we will — we won’t spend a lot, but we will spend appropriately for each kid.

Retailers trying new strategies

KWAME HOLMAN: Retailers also are enlisting new strategies this year. Toys ‘R’ Us previewed its deals on the social networking site Facebook. High-end seller Neiman Marcus, famous for its exorbitant Christmas catalogue, joined other stores in launching online promotions.

And many stores have offered layaway plans, deepened their discounts, slowed expansion, and slashed their inventories.

SCOTT KRUGMAN: They’re cutting back on their operating costs as much as possible to pass on those savings to the consumers. When it comes to inventories, they’re trying to keep those levels as low as possible, meaning they have just enough that they need to sell for the holiday season.

KWAME HOLMAN: Less inventory could mean fewer choices for shoppers, many of whom are adopting new strategies of their own.

LEE EISENBERG, author, “Shoptimism”: I think there’s much more of an emphasis now on practicality, utility, durability, value

KWAME HOLMAN: Lee Eisenberg is author of “Shoptimism.” He spoke with producers from WTTW at a busy mall in downtown Chicago.

LEE EISENBERG: The subtitle of my book is, the American consumer will continue to buy, no matter what. Now, that isn’t to say that the American consumer will continue to buy the same way that we were buying a couple years ago. But we will be shopping. The question is to, what extent will we shop and where will we shop?

KWAME HOLMAN: Stores still lured customers in with their door-buster deals this morning, but that might not be enough, says Georgetown University marketing Professor Ronald Goodstein.

RONALD GOODSTEIN, Georgetown University: Rather than selling people on the goods, their meanings, you know, the benefit behind the gift, they’re moving and luring everybody into their store on prices. And, so, what I think is — that they’re going to end up doing is shooting themselves in the foot, because I think people are going to start cherry-picking.

Changing buying habits

KWAME HOLMAN: In fact, overall retail sales are expected be down 3 percent by the end of the year, a reflection of new buying habits, shopping for fewer people, and more strategically.

HENRY ADU, shopper: Last year, I shopped for my family, my wife and kids, my brothers, and close friends. This year, brothers are out, just my wife and kids, that’s all, because of the economy.

KWAME HOLMAN: Marketing Professor Goodstein sees signs of things to come.

RONALD GOODSTEIN: What you’re going to see is even a bigger collapse of the retail industry. I think — I mean, there’s already been a ton of consolidation, but there’s going to be just a few large stores that survive.

KWAME HOLMAN: And author Eisenberg sees shoppers growing ever more strategic.

LEE EISENBERG: One of the golden rules right now is something called cost per wear. Don’t necessarily just look at what it says on the price ticket, although that matters a great deal, but look at what it says on the price ticket and then divide it by the amount of use or, in this case wear, you expect to reasonably get out of it.

People are shopping thrift shops these days. In fact, I got a call the other day from a stranger who was complaining that she had always shopped in thrift shops, and now the prices of clothing at Goodwill seem to be going up, because all kinds of people across the economic spectrum were shopping in thrift shops.

KWAME HOLMAN: For some, austerity has benefits.

MONICA REYNOLDS, shopper: It’s been a lot more fun to either limit the gifts — OK, now we can get a special gift, or the kids can make something. And it’s actually been more special, I think.

KWAME HOLMAN: Taken together, the changes this shopping season are expected to add up to a 3 percent decline in per-person spending.

Retailers trying new strategies

KWAME HOLMAN: Retailers also are enlisting new strategies this year. Toys 'R' Us previewed its deals on the social networking site Facebook. High-end seller Neiman Marcus, famous for its exorbitant Christmas catalogue, joined other stores in launching online promotions.

And many stores have offered layaway plans, deepened their discounts, slowed expansion, and slashed their inventories.

SCOTT KRUGMAN: They're cutting back on their operating costs as much as possible to pass on those savings to the consumers. When it comes to inventories, they're trying to keep those levels as low as possible, meaning they have just enough that they need to sell for the holiday season.

KWAME HOLMAN: Less inventory could mean fewer choices for shoppers, many of whom are adopting new strategies of their own.

LEE EISENBERG, author, "Shoptimism": I think there's much more of an emphasis now on practicality, utility, durability, value

KWAME HOLMAN: Lee Eisenberg is author of "Shoptimism." He spoke with producers from WTTW at a busy mall in downtown Chicago.

LEE EISENBERG: The subtitle of my book is, the American consumer will continue to buy, no matter what. Now, that isn't to say that the American consumer will continue to buy the same way that we were buying a couple years ago. But we will be shopping. The question is to, what extent will we shop and where will we shop?

KWAME HOLMAN: Stores still lured customers in with their door-buster deals this morning, but that might not be enough, says Georgetown University marketing Professor Ronald Goodstein.

RONALD GOODSTEIN, Georgetown University: Rather than selling people on the goods, their meanings, you know, the benefit behind the gift, they're moving and luring everybody into their store on prices. And, so, what I think is -- that they're going to end up doing is shooting themselves in the foot, because I think people are going to start cherry-picking.

Changing buying habits

KWAME HOLMAN: In fact, overall retail sales are expected be down 3 percent by the end of the year, a reflection of new buying habits, shopping for fewer people, and more strategically.

HENRY ADU, shopper: Last year, I shopped for my family, my wife and kids, my brothers, and close friends. This year, brothers are out, just my wife and kids, that's all, because of the economy.

KWAME HOLMAN: Marketing Professor Goodstein sees signs of things to come.

RONALD GOODSTEIN: What you're going to see is even a bigger collapse of the retail industry. I think -- I mean, there's already been a ton of consolidation, but there's going to be just a few large stores that survive.

KWAME HOLMAN: And author Eisenberg sees shoppers growing ever more strategic.

LEE EISENBERG: One of the golden rules right now is something called cost per wear. Don't necessarily just look at what it says on the price ticket, although that matters a great deal, but look at what it says on the price ticket and then divide it by the amount of use or, in this case wear, you expect to reasonably get out of it.

People are shopping thrift shops these days. In fact, I got a call the other day from a stranger who was complaining that she had always shopped in thrift shops, and now the prices of clothing at Goodwill seem to be going up, because all kinds of people across the economic spectrum were shopping in thrift shops.

KWAME HOLMAN: For some, austerity has benefits.

MONICA REYNOLDS, shopper: It's been a lot more fun to either limit the gifts -- OK, now we can get a special gift, or the kids can make something. And it's actually been more special, I think.

KWAME HOLMAN: Taken together, the changes this shopping season are expected to add up to a 3 percent decline in per-person spending.