Were you wowed by the pre-Christmas sales at famously hoity-toity spots such as Saks and Bergdorf Goodman? You're not alone. This year, seemingly everything's on sale; discounts have been deeper than ever.
But some retailers have been waiting until after the holidays to offer sales. These stores' owners feel thaitat their products are unique enough that there's adequate demand for them before the holidays--and that loyal customers will scramble for the leftovers once the discounts do kick in, after the first of the year.
One proprietor taking such a chance is Debi Greenberg, owner of luxury store Louis Boston, located on Boston's famous shopping drag Newbury Street. Greenberg hasn't marked down her fall collection, but starting Jan. 7, all fall 2008 items will be discounted by 50%.
"Stores who had never done something like this were slashing prices way before Thanksgiving," says Greenberg. "But people still weren't shopping, whether the discount was deep or not."
And Greenberg wanted to ensure that her products--which include items by designers such as Marni, Balenciaga and The Row--remained valuable in the eyes of consumers. "The integrity of the store was important. I didn't need to collect the money that fast. I feel like marking down items so quickly makes the merchandise feel worthless," says Greenberg.
Her hunch may have been right: Although after-Thanksgiving online sales were a bit stronger than expected (online data tracker Comscore reported that online sales grew by 7% from 2007 for the week of Cyber Monday), retail sales dropped by 1.8% in November, according to the Commerce Department.
Why the drop? The personal purchases most shoppers make during the holiday season haven't happened. Even with the Black Friday boost, many consumers are planning to spend money on themselves after the holidays, when they can get the very best deals, according to a December 16 survey conducted by Consumer Reports. Of the 1,000 adults surveyed, 44% said they planned on shopping during the days following Dec. 25, and 85% of that group attributed their plans to sales. While 66% of shoppers will be buying for themselves after the holidays, 34% plan on buying presents post-holiday.
All good things to those who wait: Consumers who head to the shops Boxing Day or later are going to be in for a pleasant surprise. While some retailers, who cut back on inventory this fall in order to cut costs might not have much to offer by the end of the year, others, like Circuit City , which is facing bankruptcy, will be practically giving away goods, according to Aravindh Vanchesan, a retail program manager at San Antonio-headquartered research firm Frost & Sullivan.
"Right now, [Circuit City] is not too worried about profit margins. They just want to hang on to remaining customers and make sure foot traffic in the store is up. And the only way to move inventory is to offer some steep markdowns," says Vanchesan. By Dec. 26, items marked down by 40% will be cut even further, sometimes reaching 70% or 80% off the original price.