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C. Britt Beemer or
Chris L. Cooper
800-723-3253

CHRISTMAS SHOPPING WINNER: RETAILER WITH CATALOG, INTERNET PRESENCE
Christmas Shopping Loser: Major Department Store With Inadequate Sales Help

Retailing guru Britt Beemer fears major shopper frustrations will develop as last minute sales crowds tax store resources

New York
December 14, 1999 - Only 60% of American households went Christmas shopping last weekend - well below the normal 68% to 75% of past years as shoppers continue to be turned off by inadequate sales help and high prices, according to a Sunday night survey by America's Research Group. "Advertised discounts are failing to motivate shoppers," said Britt Beemer, chairman of the Charleston S.C. consumer strategy firm who now says Christmas sales will struggle to reach the mark.

Three in ten shoppers (31.4%) felt stores were too short-handed, and of that group nearly a fourth (23.9%) failed to buy what they planned, as a result.

"If retailers get more aggressive with their pricing in the last two weeks, they may find many disgruntled shoppers," Beemer cautioned. "It's a warning sign when more than 25% of shoppers complain about inadequate sales help and 33% is the point where tempers begin to flare; we're already at 31.4%."

Citing a list of still-positive factors, including low unemployment, high wages, high stock market values and increased household savings over the past few years, Beemer said it wasn't hard to understand why shoppers are still focused on spending when they see the price points they want.

Catalog Sales Strong

Of greatest surprise to Beemer, who counsels retailers on marketing strategies, is the strong showing of catalogs. Presumed to be a weak link due to the growth of Internet sales, catalog sales are running ahead of last year's pace. Almost a third (32.2%) of American shoppers have already made Christmas gift purchases from catalogs, already four points ahead of last year's season total. Beemer predicts catalog sales will end up six to eight percentage points higher than 1998.

Meanwhile, Internet sales are in the process of doubling 1998's performance, ahead of predictions, Beemer said. At this point, 12.7% of shoppers have made cyber-purchases, ahead of the 10.2% who said they would do so in a survey from November 1 of this year. In 1998, 7% of Americans bought on-line. Beemer has increased his web-shopping/buying forecast to 14% of consumers this year.

"On-line Christmas buyers want to avoid the store hassle, according to four of ten with Internet access," Beemer pointed out. "Also, 38% said they like the 24-hour shopping because it better fit their lifestyle," he said.

Some 21.0% of those with Internet access first shopped the Web and then went comparison pricing in stores. This proved very successful as most of them (78.1%) found the stores willing to match Internet prices. Others visited the stores first, and then logged on to look further, with over 32.3% shopping this way. The big winners here were the stores with websites, because most of this group (58.5%) bought their gifts from the store they first visited.

Consumers who have shopped on the Internet so far have ordered nearly four (3.6) items from an average of two (2.3) sites. Almost three-fourths (73.2%) of on-line shoppers say they are 'very satisfied' with their cyber experience.

Still Looking

More than half of Christmas shoppers (57.0%) are still looking for better discounts and sales this season and more than half of those are waiting for those lower prices to complete their shopping.

"More than three out of ten shoppers are playing 'chicken' with the retailer," Beemer said. Retailers selling big-ticket items will need a strong final two weeks because only 13.4% have purchased or will purchase such goods, which is five points under the normal 18% level, according to ARG data.

Only about one in four are finished shopping (23.2%) but another 25.3% plan to be done by December 15, leaving about half waiting to the last minute.

One telling figure is the low rate at which shoppers are buying something for themselves. "In most years two-thirds of American shoppers will buy themselves a gift, but this year only 31.6% have," Beemer explained. That's a further indication that retailers haven't motivated shoppers with the right levels of discounts and sales."

"Retailers still control their fate this holiday season," Beemer summed up. "My 6.2% sales increase prediction is in jeopardy right now due to retailers underwhelming the American shopper thus far this holiday season.

"The survey was conducted by telephone Sunday evening, December 12, and has a margin of error of ±4.3 percent. This is the sixth year that America's Research Group has tracked Christmas retail sales. Britt Beemer founded America's Research Group in 1979. His research clients are many of the leading corporations of America, including Broyhill and Thomasville Furniture, JCPenney, Sealy Mattress, Barnes & Noble and American Eagle Outfitters.

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