Purdue News

October 23, 1998 Christmas: Retailers hope you buy now and later WEST LAFAYETTE, Ind. -- It's not yet Halloween, but it's beginning to look a lot like Christmas at stores throughout Indiana as retailers aim to cash in early on the spirit of holiday giving. "Retailers have found that the sooner consumers start shopping for Christmas, the more they spend," said Richard Feinberg, a professor of consumer sciences and retailing who works with the Purdue University Retail Institute. "Although some people would suggest that consumers dislike the early emphasis on holiday spending, focus groups that I've conducted have shown that consumers like the holiday atmosphere in stores and feeling the spirit of holiday giving and receiving," he said. Feinberg said the current political and economic uncertainty make it difficult to predict what will happen in retailing during the rest of this year, but the early start to the holiday shopping season may help keep store registers ringing for the next two months. "Consumer confidence in Indiana is high, personal income is up, consumer spending is up, and opportunity to spend is up," he said. "As a result -- barring any unforeseen events -- holiday retail spending in Indiana should be up modestly over last year." He predicted that retailers will see sales increases of 3 percent to 7 percent over 1997, with discount stores continuing to outpace the rest of the retailers. "Discount stores have done well all through this year and should continue to do so," Feinberg said. "Retailers with higher-priced and luxury items should also do well as the ongoing stock market recovery spreads confidence to consumers." Feinberg said competition for shoppers' dollars is more intense than ever. "Retailers must aggressively induce the consumer to come in and spend. They cannot hope that the consumer will find them without putting out many reminders," he said. Among the promotion efforts to attract shoppers will be early and frequent sales on merchandise; special markdowns for certain customers; and coupon offers for additional purchases, Feinberg said. For example, shoppers who make purchases during Thanksgiving week might receive a store coupon they can use to take additional markdowns on items they purchase two weeks later, he said. And credit card holders may receive mailings with special inducements to shop. Retailers have tried to spread the impact of these next two months across the entire year, but their efforts have done little to alter the traditional end-of-year spending spree. "The reality is that the busiest days of the year are during this period, and the results of this period make or break a retailer's year -- representing anywhere from 25 percent to 75 percent of sales and profit," Feinberg said. Source: Richard Feinberg, (765) 494-8303; e-mail, xdj1@purdue.edu Writer: Beth Forbes, (765) 494-9723; e-mail, beth_forbes@purdue.edu Purdue News Service: (765) 494-2096; e-mail, purduenews@purdue.edu To the Purdue News and Photos Page