By most accounts the holiday shopping season got off to a solid start with strong late November sales and a record Cyber Monday. Though given the historically high level of discounting and rampant free shipping it was likely “profitless prosperity.” But why worry about little details such as actually making money.
So now, with only 18 days of shopping left before Christmas, the real fun begins. And so does the game of chicken between consumers and retailers.
Despite feeling a bit more optimistic, all but the wealthiest consumers are facing a pretty uninspiring economic outlook. And study after study shows that consumers are still engaged primarily in “surgical shopping”–emphasizing needs over wants and remaining keenly focused on getting a great deal. Retailers, by turn, are hoping to not only drive strong same store sales, but improve their gross margin performance. And here we have our stand-off.
The reality for most consumers is that they are unwilling to pull the trigger unless they see obvious value. The reality for retailers is they are unlikely to cede market share or risk getting stuck with large markdowns.
So let the game of chicken begin. My bet is that the retailers blink first.