PhillyDeals: Technology changing holiday shopping habits

Shoppers at Toys R Us in Deptford waiting to check out on Black Friday. Sales at physical stores that day grew a less-than-expected 0.3 percent, according to data from ShopperTrak.
Shoppers at Toys R Us in Deptford waiting to check out on Black Friday. Sales at physical stores that day grew a less-than-expected 0.3 percent, according to data from ShopperTrak.
Posted: November 30, 2010

From her headquarters office at online retail operator GSI Commerce Inc., Fiona Dias can see the paved parking that makes possible the King of Prussia shopping complex. "The mall was packed Black Friday," said Dias, "but I didn't see tons of shopping bags."

The National Retail Federation, in a survey of 4,300 Americans, said the number of people shopping online has grown by a third so far this Christmas-shopping season compared with last year. Actual online sales were up a more modest 9 percent, estimated analyst Marianne R. Wolk, who covers Amazon.com and its rivals for Bala Cynwyd-based Susquehanna International Group.

Black Friday sales at physical stores grew a less-than-expected 0.3 percent, to $10.7 billion, Janney Capital Markets analyst Adrienne Tennant told clients, citing data from Chicago-based ShopperTrak.

Deep discounts ate into revenues as stores shaved hundreds of dollars from the costs of Blu-ray players, E-readers, and game systems, said Janney's David Strasser.

A mixed picture? Consumer stocks have risen at double the rate of the Standard & Poor's 500 since August, in expectation of higher Christmas sales this year, economist Ed Yardeni told clients in his newsletter yesterday.

How is that possible, with 1 in 10 Americans still unemployed (or 1 in 6, depending how you count)? "The Have-Nots don't have jobs and may be about to lose their long-term unemployment benefits" - but for fully-employed Americans, "their average real income is at a record high," Yardeni wrote.

Dias, head of strategy and marketing for GSI, said online sales rose across the board for Toys R Us, Dick's Sporting Goods, Bath and Body Works, and 100 other big store chains whose websites and online delivery are run by GSI.

She credited, in part, stores' willingness to eat delivery charges: "Any retailer who thinks free shipping is optional is sorely mistaken. You cannot compete with Amazon if you don't offer free shipping."

Susquehanna's Wolk and other analysts say it's tough to translate higher online sales into higher profits, with higher marketing and operating expenses. "The analysts don't know what they're talking about," insisted Dias. She said GSI cuts costs with high volume and a tight relationship with United Parcel Service Inc.

Dias said smart phones were changing shoppers' habits. Last year GSI's busiest minute came on "Cyber Monday," in the evening after work, when the company rang 789 orders in a minute. But at 11:27 Thanksgiving night, GSI beat that record, logging 797 orders.

The iPad, Android Verizon phones, and other mobile Internet devices have boosted Thanksgiving shopping, Dias said: "Customers were out and about, away from their desktops or laptops - and they were buying."

Black Friday and Cyber Monday aren't all that important as predictors, Susquehanna's Wolk concluded. "The week of Dec. 13 overall is more critical to the total season's performance."

Pay how much?

My Sunday column and blog item on rich people who think they don't pay enough taxes brought more than 50 posts, calls, and e-mails from readers on both sides of the debate over whether President Obama and Congress should extend Bush-era tax cuts, and for whom. Excerpts:

"If these rich guys don't think that they are being taxed enough, the Treasury accepts voluntary payments," writes Philadelphia lawyer Joseph A. Ferry. "Far better that they should use this money to invest in start-ups and create wealth" instead of funding more "profligate spending" by the government.

"While Warren Buffett is indeed rich, the average household making $250,000 is surely not," insists a shy Camden County professional, who happens to make just that much, he told me via his Droid phone. "A spreadsheet of my household income proves I'm not living lavishly. . . . We need to cut spending, reform entitlements . . . stop the class warfare . . . get back to a meritocracy!"

"It is refreshing to learn that [some] business owners, professional people, yes, even billionaires like Warren Buffett, do not want the dopey tax cuts for the wealthiest, dishonorably rammed through Congress by former President Bush, made permanent," writes George M. Peters of Bryn Mawr. "Congress should not soak the wealthy, just make them pay their fair share."

"Of course these cuts should end," writes Elaine Hodges, a retired Ambler teacher. "That we can possibly talk about cuts to Social Security, but continue tax cuts for high-income earners, illustrates how influential the rich and powerful have become."

"The trouble with what Buffett says," writes Charles Stone of Wayne, "is that the Federal Government needs an extra $1.3 trillion per year. $700 billion over ten years [projected savings from ending the cuts] is $70 billion a year. [So] where does the government get that remaining $1.23 trillion a year?"


Contact columnist Joseph N. DiStefano at 215-854-5957 or jdistefano@phillynews.com.

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