Can Cyber Monday Save Christmas for Retailers?

You might have noticed big lines in front of stores on Thanksgiving night. No doubt you saw all the traffic the “new Black Friday” hours created everywhere on Thursday evening. Maybe even you joined the frenzy and went shopping after a traditional dinner of turkey will all the fixings. Perhaps you think Black Friday was a huge success for retailers.

You would be wrong. Black Friday 2014 was a dismal failure for retailers with some estimates topping 11 percent as the shortfall against previous year’s numbers. Retailers turn to Cyber Monday and online sales to pick up the slack stores created over Black Friday to save the season.

What happened? Many thought the economy was back and forecasts for a “merry” Christmas for retailers have been abundant.

The excuses are already being debated. Some say the earlier Black Friday sales are to blame. Others muse that Black Friday specials just were not all that special this year.

The truth is that conditions overall against a year ago are not really as great as retailers hoped. Consumers are being thrifty because they have to. With soaring food costs (the uncovered story in the media over Thanksgiving), stagnant job and wage indicators, and whopping health care expenses consumers are in no mood to abandon the thrifty Christmas we predicted.

Black Friday died, just as we predicted, thanks to the Internet. Indeed, online sales continued to rise over the long Thanksgiving weekend thanks to consumers feeling more confident in shopping by smart phone. But does the online surge in sales make up for the loss in stores?

No, far from it. The Christmas season of 2014 is now in serious danger.

What does this mean for consumers? Here is what to expect for the next three weeks:

1. Retailers won’t wait now to discount. Inventories in stores especially are huge and only discounts can move them.

2. The weekend of December 19-21 is critical for store sales and should be the busiest weekend of the year — much busier than Black Friday.

3. Free shipping deals will likely be extended this year.

4. Expect a lot of warnings about winter weather and overload of the system ahead of the week of Christmas. Memories of last year’s shipping failures as the season closed loom large.

5. The will be a data security breach from using credit cards, just like last year. This year, the chances of it happening via an online retailer are huge. Cash remains king.

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