CHICAGO (Reuters) - From traditional lures like slashed prices on hot electronics to a “Santa-Sing-A-Ma-Jig” toy, U.S. retailers are pushing to attract shoppers into their doors on Black Friday.
With higher income consumers more positive about their financial prospects but lower income consumers still struggling, retailers are reaching out with smartphone and iPad apps, extending store hours for the holiday season kick-off that starts November 26 this year.
Sears and Wal-Mart Stores Inc are even open on U.S. Thanksgiving Day that Thursday.
The key is to not only attract consumer shopping for “doorbuster” deals that start well before dawn, but to nab the attention of middle and higher-income shoppers who are feeling more comfortable about spending as the job market stabilizes.
“It’s critical to get off on a good start for Black Friday because it’s hard to make up sales if you fall behind your plan overall,” Barclays Capital analyst Bob Drbul said.
For a graphic on Black Friday traffic and holiday sales, see: r.reuters.com/dyk66q
Black Friday is a term co-opted by retailers to refer to the time of year when their business moves into the black, or turns a profit. This year, the event will be about keeping sales momentum that picked up modestly throughout the year.
“For the past three years, (store) trips have been declining. What we have been starting to see the last couple of months is that middle and upper consumers have started increasing those trips,” said James Russo, vice president at market and consumer information monitor The Nielsen Co.
Retail stocks in general are up sharply since August, buoyed by signs of sales and earnings improvement. The Standard & Poor’s Retailing Index is up 23 percent, compared with a 13.9 percent increase in the S&P 500.
As many as 138 million shoppers could hit U.S. stores this “Black Friday” weekend, according to the National Retail Federation.
The trade group has forecast a 2.3 percent increase in sales for November and December, up from 0.4 percent a year earlier. Other forecasts call for even greater increases.
Discounter Target Corp is among those that got a jump on Black Friday, with a four-day sale that began on Sunday and that included more items than last year, said Troy Risch, executive vice president of stores for the retailer.
That tactic of early sales has appealed to some shoppers.
“What I really like is that a lot of stores are opening before Black Friday,” said Gabriella Jones, a 49-year-old from Lake Forest, California, who was in Times Square traveling with her daughter on Wednesday. “It’s almost like Black Tuesday, Wednesday, Thursday and Friday.”
Target stores will also be open at 4 a.m. on Black Friday.
But that means that Target is sleeping in compared with Toys R Us, the world’s largest dedicated toy retailer, which opens at 10 p.m. on Thanksgiving for 24 hours straight.
Toys R Us is hoping to bring in customers with exclusive items like the Santa Sing-A-Ma-Jig, a line of singing dolls dressed in Santa costumes.
Black Friday caters to people who are still struggling with unemployment, falling home prices and economic insecurity.
Wal-Mart, for example, is offering items like a 32-inch Emerson LCD HDTV for $198. The discounter, which is looking to break a string of six quarters of falling sales at stores open at least a year, is also offering to match competitors’ price on Friday.
“There’s a lot of people who are still feeling the pinch and that is going to make Black Friday an even bigger deal than it is historically,” said Patty Edwards, chief investment officer at Trutina Financial. She noted those consumers will be drawn out by early “doorbuster” deals.
But stores that cater to higher end consumers are finding the most favor with retail analysts.
Leather goods maker Coach Inc, high-end jeweler Tiffany & Co and clothing retailer J Crew were among Edwards’ top investment picks.
Consumers have also shown a propensity to shop for Black Friday deals and then to hold off on other purchases until the last weekend before Christmas.
“I think we will see a pretty big lull post-Black Friday and then we will see a pretty big promotional calendar,” Janney Capital Markets analyst David Strasser said. “The consumer has kind of caught on that there is no reason to shop the week or two after Black Friday.”
But waiting out that lull will not cut it for retailers that cater to middle-market consumers, Edwards said.
“If they don’t have it well planned, with something to surprise and delight ... their customers each week, they are going to have issues,” she said.
Additional reporting by Lucia Mutikani in Washington, D.C., and Dhanya Skariachan and Jon Lentz in New York; Editing by Phil Berlowitz
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