How Will January Clearance Sales Compare to 'Mega Monday'?

PHOTO: Shoppers walk past window displays on 34th Street, Dec. 26, 2011 in New York City.
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If the bargains were less than stellar on the day after Christmas, retailers may offer deeper post-Christmas discounts this weekend to lure shoppers after a strong start to the holiday shopping season.

Britt Beemer, chairman and founder of America's Research Group, which analyzes the retail industry, downplayed the significance of the day after Christmas, or "mega Monday," as some media stories and retailers have coined it.

Though many Americans have the day off as a federal holiday, even more could have a free day this coming Saturday, "the day when everybody's home." He said he predicts more traffic and bigger discounts this weekend.

"I think there is a lot out there that can happen, but if consumers don't get the deals they want it will be a whole other issue," he said.

Retail stores like ToysRUs and Walmart opened as early as 5 or 6 a.m. on Monday to keep the wheels of commerce moving.

Last year, Beemer said, consumers wanted big discounts but retailers did not offer them until January.

If that happens again this year, deeper discounts could take place during January's clearance sales.

Bill Stone, PNC Asset Management Group's chief investment strategist, said consumer consumption has been an integral part of the U.S. economic recovery since the great recession began three years ago.

"We've seen some lift in consumer sentiment, but the after-Christmas period is another important signpost to the mood and health of the consumer," Stone said.

The day after Christmas is usually the second-highest for retailers' revenue, with as much as $8 billion being spent in one day, according to ShopperTrak. ShopperTrak is predicting traffic could increase as much as 60 percent compared with last year, the Indianapolis Star reported.

With gift cards being a large part of holiday giving, this period becomes an even larger retailer focus, Stone said.

Beemer said consumers are most likely going to spend more than the amount on their gift cards.

"A lot of those out there are between $20 and $30 and I suspect they get used up probably for a $40 or $45 purchase," he said.

Returning purchases or gifts can also work in the favor of retailers if stores have favorable customer service and return policies.

"When people return something, there's a 70 percent chance they'll buy something else. That's with the assumption that when they've got this money they'll see something else they like and the retailer will have a sale."

Though how deep store deals are will influence how much shoppers overspend.

"You'll have teenagers come in and use their gift cards but they won't see parents come in unless they have big discounts," he said.

Beemer conducted a survey of over 1,000 people and asked what kind of discounts would lure shoppers to buy in-stores.

About 60 percent of respondents said they would have to see discounts of 60 to 80 percent be motivated to shop. About one-third of respondents said a discount of 50 percent would encourage them to shop, while only 6 percent said a 40 percent discount would lure them.

"But I don't see many retailers even offering 50 percent off. It may be a dud if that 40 percent waits to shop," he said. "Right now it's up for grabs. That may change before the week's out."

Beemer said JCPenney's coupon offer to get $10 a purchase of $25, without exception, was the strongest offer he had seen so far this week.

A spokeswoman for Walmart said the company was offering 50 percent off select merchandise on its website and in-stores.

But spokesmen for Walmart and Macy's on Monday said they did not have past or current post-Christmas sales data.

Whatever you do, ask when you buy if a retailer would offer an adjustment if the price of something falls later, says Jennifer Black, retail expert. And save your receipt.

 
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