Online shopping more preferred than malls – Reports

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Sales at retailers’ brick-and-mortar locations may suffer during the weekend after Thanksgiving, with analysts saying more shoppers are skipping malls and buying online.

About $1.73 billion was spent online on Thanksgiving Day, a 25 per cent increase from last year, according to Adobe Systems. On Black Friday, about $822 million was spent by 11am, 15 per cent more than in 2014, the company said.

shopping mall
Retail observers say many of those purchases are coming at the expense of trips to physical stores, costing merchants more in shipping and depriving them of the impulse sales they make to shoppers wandering their aisles. Smaller-than-expected crowds turned out at shopping centres in North Carolina, where Jeff Simpson, a director at Deloitte Consulting LLP’s retail practice, was monitoring the action on Black Friday.

“Across the board, much less traffic than was anticipated,” Simpson said, without giving specific figures. “Much, much slower.”

About 135.8 million Americans are expected to shop in stores or online over the four-day weekend, according to the National Retail Federation, the largest US retail trade organisation. While the forecast represents a 1.6 per cent increase from last year, the NRF’s projection has been overly optimistic in the past. Last year, it was 4.8 per cent higher than the actual turnout it found in its post-weekend shopping survey.

Simeon Siegel, an analyst at Nomura, saw decent crowds at the Westfield Garden State Plaza mall in Paramus, New Jersey, but still expected many of the shoppers to already have made purchases online.

“This day is going to be a disappointing day,” Siegel said. “If you have the right products you can win, but it’s a tougher environment.”

With the continued shift of spending online in mind, retailers like Wal-Mart Stores and Target Corp are putting more of their deals on their websites or offering them over a longer period of time. Target has countered the increasing popularity of by providing free shipping and returns on holiday orders, while Wal-Mart plans to offer more than four times as many discounts as last year on the Monday following the Thanksgiving weekend.

But the weekend after Thanksgiving is still one of the busiest for US retailers, who use the period to highlight their offerings. Target and Wal-Mart say they are expecting record turnouts.

“This is the big event,” said Cindy Hudson, Target’s senior vice president of store operations. “We have a large team dedicated all year to helping pull off Black Friday.”

As stores opened across the country starting Thanksgiving evening, a Target command centre at its Minneapolis headquarters was getting live video feeds from all of its 1,800 locations. There are also four regional command centers monitoring specific activity in their markets.

Inside the command centre, workers glued to computer monitors and screens on the wall can view the lines outside stores to make sure they are orderly, shoppers are happy and that customers are getting into the store at the right pace – not too fast, not too slow. Inside the stores, live feeds at checkout lines monitor for interruptions.

Source: Bloomberg

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