CHICAGO — September had barely started, but that didn’t stop retailers from talking Christmas: Wal-Mart said it would kick-off its holiday layaway promotion just two weeks after Labor Day, a full month early. A few days later, Toys R Us and Kmart said they’d do away with layaway fees altogether.
One might say they were late to the holiday party. A Neiman Marcus in Oak Brook, Ill., debuted a decked-out display of Christmas trees, collectibles and holiday decor in August.
Fretting that an upcoming presidential election, rising energy and food costs as well as ongoing job fears could cause skittish consumers to tighten their purse strings, retailers are drumming up ways to convince them to shop early and often.
They’ll spend the next few months vying for shoppers’ attention and dollars, aiming to drive all-important holiday sales, which make up roughly 25 percent of their yearly profits, according to the International Council of Shopping Centers.
By kicking off promotions while it’s still hot outside, retailers are making a calculated move to stay in front of consumers and lock in their loyalty early, say retail experts. Early estimates from ShopperTrak predict a 3.3 percent gain this year from last. Foot traffic in stores, which was down last year, is expected to pick up 2.8 percent.
That’s a brighter forecast than the 3 percent gain predicted for the last year’s holiday shopping season, which ended up as a mixed bag for retailers. Many scratched out sales gains of 3.4 percent year-over-year, according to Thomson Reuters, but that was bolstered by deep discounts. By comparison, in 2010, retailers realized same-store sales gains of 4 percent.
“Consumers only have so many dollars they are going to spend at this point,” said Megan Donadio, retail strategist at Kurt Salmon in New York. “By getting out there and letting people know about layaway plans, they (retailers) are making sure they are in the front of consumers’ minds.”
Plus, if consumers start spending earlier, they’re more likely to spend more and buy more if they aren’t rushed by a holiday deadline, added Edward Fox, associate professor of marketing at Southern Methodist University’s Cox School of Business in Dallas.
The big question, of course, is whether shoppers will cooperate.
Willetta Bell certainly plans to. A frequent participant in Kmart’s layaway program. She is paying on a 50-inch television, a gas grill and some jewelry. The Chicago resident said the retailer’s offer to waive its $5 or $10 nonrefundable enrollment fee through November 17 would help her get an early jump on holiday shopping for her nieces and nephews.
“That’s exciting because layaway helps me out. It helps me budget and get the things I need due to the economy,” she said.
Overall, retail sales this year have been bumpy. Consumer confidence has been low and employment gains uneven. Robust back-to-school sales, however, gave a number of retailers a boost, with a nearly 6 percent gain in August, according to research firm Retail Metrics.
Working in retailers’ favor is that they’ll have more time this year to complete sales. This year, the calendar dictates that the holiday shopping season will last five weeks, instead of the typical four, kicking off officially on Black Friday, the day after Thanksgiving.
That should give retailers an extra boost since shoppers aren’t likely to get started until after the election, according to Chris Angell, ShopperTrak’s director of global marketing.
Analysts also are betting on an uptick in online shopping this year, namely in electronics and appliances, as shoppers continue “showrooming”: browsing retailers’ brick-and-mortar stores for items and then searching online for the best deal.
ShopperTrak, for example, predicts that foot traffic for electronics and appliances will drop 8 percent this year, but actual sales of electronics and appliances will climb 1.5 percent, indicating that many of those transactions will happen online.
Retailers expected to do well this season will combine the best of their online strategies with their in-store business, persuading shoppers that they’ll find the best deals no matter how they like to shop or pay.
On this too, retailers are plotting early. Toys R Us announced its big service play Wednesday by promising a reservation list for this year’s hot toys.
It also unveiled a ship-to-store program, allowing customers to order items in-store, from mobile devices or at home and pick-them-up at their local stores.
Kmart’s free layaway will be available online and in stores through Nov. 17, said Jai Holtz, vice president of financial services at Sears.
After that, the retailer will evaluate whether to extend the program.
“Through the recession, we’ve seen layaway grow. We’re rolling it out for the holiday now. If this is a value (shoppers) continue to want, we’ll continue.”