‘Twas the day before the night before Christmas…

nancystevejeannexmasYeah…that’s me giving the fake, melodramatic reaction to the Give-A-Show Projector my older sister received for Christmas in, I think, 1969.

Today I had one of those “Wow!” reactions. I haven’t experienced last minute, day-before-the-night-before-Christmas, crowds of power shoppers like I did this afternoon. Over the last couple of days, I’ve been struck by the huge volume of inventory that exists on retail shelves and racks and took it as a sign that this was NOT going to be a very happy holiday for retailers. Markdowns and sales are already occuring, stores like Marshall Field’s have cheerfully announced that “We’re Open until 7pm on Christmas Eve!” (an unprecedented move), and anecdotally most of my friends, family and acquaintences are spending less on higher quality items this year (i.e., less total stuff is being jammed under the tree).

So what’s going on?

I’m sure you’ll agree that the handsome Give-A-Show Projector in that old picture was probably a fun toy (I wouldn’t know since my older sister wouldn’t share and I never touched it and I’m still bummed). Toy purchases are different and more sophisticated today and I’ve grown increasingly aware that the primary gift on most “tween’s” (children just before their teens, “between” childhood and teen-age) and teenager’s Christmas lists are gift cards. My son loves gift cards. So does his sister and their cousin’s do too. They don’t want to give melodramatically joyful (and fake) reactions to gifts anymore — they want to go to Best Buy or Target and get what *they* want. Though it feels like we’re trading money between family members by giving gift cards to each others kids, it’s so easy and they love it…so we’ll keep doing it until we adults can talk about what we should do for next year.

So what’s going on? What if people are waiting for after Christmas redemption of their gift cards? (Gift cards are good for consumers who can buy after markdowns have been taken post-Christmas…but *very* bad for retailers as it can decimate their gross margins). Is it growth in online commerce? Or is it both? Could it those two *plus* the war in Iraq? Fear about another terrorist attack? Fatigue over the sameness of the holiday gift giving process and its meaning? (This seems atypically possible due to the fairly recent religious resurgence in the U.S. and, after all, Christmas *is* a religious holiday). Who knows…

As of data available up to December 18th, retail sales in the U.S. are down 5.9 percent according to ShopperTrak the retail intelligence firm, while Americans are simultaneously flooding online stores as the holidays approach. We won’t know for several months if the low sales are gift card related, online commerce, the war or some other factor. But just like economists who build economic models trying to predict the future through identification of all relevant variables (even the human one) and usually are surprised with the models inaccuracy, we may never know all the impacts of what is going on and will have to guess at the “why” too.

I’m not a ‘focus group of one’ so I try not to apply my personal experiences to any given problem or opportunity and consider it a trend. Still…it sure feels to me like a shift is going on and I’m going to have to think about this some more and observe further before an opinion is fully formed.

If you’re trying to figure out if you should give me a gift card or an actual wrapped present for Christmas, go ahead and skip both in favor of Fractional Jet Ownership. I’d like a blue one please.

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About Steve Borsch

Strategist. Learner. Idea Guy. Salesman. Connector of Dots. Friend. Husband & Dad. CEO. Janitor. More here.

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SiteGround is 'The One'

READ THIS PAGE to learn how and why I finally found "the one" web hosting company I heartily endorse and use, SiteGround, and why it is highly likely to be the perfect web hosting company for you.

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Podcasting hit the mainstream in July of 2005 when Apple added podcast show support within iTunes. I'd seen this coming so started podcasting in May of 2005 and kept going until August of 2007. Unfortunately was never 'discovered' by national broadcasters, but made a delightfully large number of connections with people all over the world because of these shows. Click here to view the archive of my podcast posts.