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Purdue expert predicts modest bump in holiday shopping

November 1, 2011
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American shoppers are expected to open their wallets just a little wider this winter holiday season, pushing sales up 2 percent to 4 percent, according to an estimate released Tuesday by the Purdue University Retail Institute.

But online purchases will surge 15 percent, according to predictions prepared by Richard Feinberg, a Purdue professor of consumer sciences and retailing. He also expects small local shops to struggle as recession-weary consumers flock to large discount- and value-oriented retailers.

“The fact that we will have an increase in holiday sales is a miracle,” said Feinberg, pointing out the national unemployment rate of 9 percent, with many more having given up looking for work.

Feinberg expects $475 billion in total holiday sales, with the biggest single item purchased being gift cards.

He also expects near-constant sales promotions, which retailers have used in recent years to capture gun-shy customers.

Retailers will use more direct e-mail marketing this year, as they have noticed they get much higher response rates than when using snail-mail direct-mail advertising. Retailers are also trying to drive customers to their websites, both for online sales as well as to promote their stores.

"Retailers are beginning to realize that their online presence has the potential to be their biggest store. This has led them to pay attention to their Internet presence in ways they have not done in the past," Feinberg says. "They also are finding that a well-designed website not only leads to online purchases, but to more store visits, too."

Last month, the National Retail Federation, the nation's largest retail trade group, predicted winter holiday sales would rise 2.8 percent, to $465.6 billion.

That would be smaller than 2010's 5.2-percent increase, but it's higher than the average increase for November and December over the past 10 years.

And it would continue a recovery begun last year after holiday sales fell the previous two years. They dropped 4.4 percent in 2008 and 0.4 percent in 2009.

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  • Yep, Sure
    Nice, but it doesn't mesh with reality. Drive by any of Amazon's 4 central Indiana warehouses. The parking lots are still largely empty, even though the calendar says November. Nobody's filling all of these orders. Then there's Best Buy, who recently announced that instead of hiring 40,000 seasonal workers like they did last year, they'll get by this year on 20,000. I'd like to believe things are getting better, but they're not, at least not yet. People are throwing the furniture overboard now. I seriously question whether or not experts are simply naive, or if they are intentionally trying to convince us to spend. Sorry, but it's laughable at this point. The whole thing is unravelling right before our eyes.

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  1. With Pence running the ship good luck with a new government building on the site. He does everything on the cheap except unnecessary roads line a new beltway( like we need that). Things like state of the art office buildings and light rail will never be seen as an asset to these types. They don't get that these are the things that help a city prosper.

  2. Does the $100,000,000,000 include salaries for members of Congress?

  3. "But that doesn't change how the piece plays to most of the people who will see it." If it stands out so little during the day as you seem to suggest maybe most of the people who actually see it will be those present when it is dark enough to experience its full effects.

  4. That's the mentality of most retail marketers. In this case Leo was asked to build the brand. HHG then had a bad sales quarter and rather than stay the course, now want to go back to the schlock that Zimmerman provides (at a considerable cut in price.) And while HHG salesmen are, by far, the pushiest salesmen I have ever experienced, I believe they are NOT paid on commission. But that doesn't mean they aren't trained to be aggressive.

  5. The reason HHG's sales team hits you from the moment you walk through the door is the same reason car salesmen do the same thing: Commission. HHG's folks are paid by commission they and need to hit sales targets or get cut, while BB does not. The sales figures are aggressive, so turnover rate is high. Electronics are the largest commission earners along with non-needed warranties, service plans etc, known in the industry as 'cheese'. The wholesale base price is listed on the cryptic price tag in the string of numbers near the bar code. Know how to decipher it and you get things at cost, with little to no commission to the sales persons. Whether or not this is fair, is more of a moral question than a financial one.

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