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Will San Diegans Spend Cyber Monday Shopping?

Will San Diegans Spend Cyber Monday Shopping?
Will San Diegans Spend Cyber Monday Shopping?
GUEST:Miro Copic, Professor of Marketing, SDSU College of Business Administration

ALISON ST. JOHN: Today on Midday Edition, shopping. Have you had it out to the stores yet to test the promises of bargains galore? Have you done most of your holiday shopping already or are you biting your time till the frenzy dies down hoping there will be still deals for those who wait? Today is cyber Monday, chance for the more timid and tech savvy perhaps among us to sally forth and find good deals online. So here to tell us how this your shopping season is shaping up for consumers and retailers is Miro Copic, who is professor of marketing at SDSU's college of business. Miro Copic, thanks so much for joining us. MIRO COPIC: Thanks, Alison. Good to be here. ALISON ST. JOHN: So apparently 45 million people went shopping on Thanksgiving nationwide last week, which was up from 35 million the year before. How did it work from the retailers point of view? MIRO COPIC: It's interesting. The retailer sometimes they are all in it for themselves. So it's a zero-sum game for them. They targeted consumers coming in from Thanksgiving day and somebody doesn't, I went. So they all opened earlier. And so what happened over the weekend was that of actually got the same number of consumers that went shopping last year went shopping this year so we spread the number of shoppers over more days. So there really wasn't a big increase in sales. The overall traffic was kind of flat. ALISON ST. JOHN: You said you went on Friday morning the day after Thanksgiving and it wasn't the normal frenzy than it had been in the past MIRO COPIC: I think it was there in the early morning Friday morning to see what was happening in the balls and it was very quiet. I was in fashion Valley on the Mission Valley and it was very quiet until 10 or 11 PM when the next round of consumers were coming into the stores and what they did was a lot of people kind of really looked at deals on Thanksgiving Day and then the real diehards did go to the mall early in the morning on Friday morning for the Black Friday deals that are very exclusive to the retailers on Friday morning. And then they kind of vacated and they had an easy shopping and the rest of the people came in and around 10 o'clock and stayed through the day. ALISON ST. JOHN: It seems those other people might've given up their Thanksgiving and it never even help the retailers in the way that it hoped it would. Do you think perhaps they sort of opened a Pandora's box by starting earlier and earlier and sort of crying Wolf? MIRO COPIC: I think retailers have found for consumers it is a win because they get more opportunities to get good deals. But at the same time for retailers is kind of like I mentioned. It's a zero-sum game and it really started with the discount retailers were really concerned because there core customers the middle class or lower class are this ones that are still hurting post-recession. The economy has been kind of uneven in its growth and there's been some positives this year and there's been some negative this year and a lot of those retailers like Walmart or Target or Kmart Kmart it would suggesting they were open for 41 straight hours. They open at six o'clock in the morning on Thanksgiving day and stated opened till 11 PM on Black Friday. ALISON ST. JOHN: How did that work out for them? MIRO COPIC: We will find out they will be doing the earnings reports and I'm trying to track and have some resources to see if I can find some of the date is. I know Walmart I did find out started off very well. Although, they had a variety of protests are different Walmart stores throughout the country. ALISON ST. JOHN: Interesting. I was going to ask you whether the threats to boycott this new trend had manifested all over the weekend? MIRO COPIC: Not as much as retailers feared but there was a lot of online activity there were a lot of sites that were up that were kind of laboring retailers naughty and nice. Not a retailers were open on Thursday, nice ones stayed close and let people enjoy their holiday. ALISON ST. JOHN: Do you think this is basically a case of people just trying to get around the fact that a lot of folks just don't have the money to buy things at full price anymore and they are not willing to open their purses until there is a huge discount? MIRO COPIC: That's actually correct. It's interesting that since 2000 there are 63% more deals during the holiday shopping than there were in 2009. And yet the average discount has actually increased from about 25% to 36%. So consumers are concerned, conditioned to look for big discounts and this year some of the stores, some of the retailers this week and actually did some very innovative things, so when consumers are seeing 40 and 50% discount so far fairly meaningful, actually. Retailers are starting to eat into their margin to get that consumer dollar. Retailers like the gap, or American Eagle, express, here in San Diego, they had 40 and 50% off storewide, so it was very easy for a shopper, you go in anything in the stores 40 or 50% off, very simple. We don't have to go through the maze of this deal happens to be 50%, this is 70, this is 25%. Make shopping a lot easier for consumers. ALISON ST. JOHN: But that the incentive for the stores to open early will not probably relax next year even if it did increase just because everybody else is opening up really can't afford to stay close. MIRO COPIC: Exactly. When you look at a couple years ago there were very few stores in 50% of the stores opened at some point on Thanksgiving Day either just before midnight or eight o'clock or six o'clock or in the case of Kmart, first thing in the morning, so it's going to follow-through. There will be some diehard retailers I remain closed at least for the foreseeable future. Costco, Nordstrom, they stayed close on Thanksgiving and I think they make a point and they would a lot of little customers that way. ALISON ST. JOHN: Let's talk about what actually people but on Black Friday what sort of things do they get good deals on, and what, how does that differ from cyber Monday today? MIRO COPIC: You know it's interesting there are some core categories that do very well. Clothing and accessories did very well so about 60% of the people, six of 10 people but something either clothing related or shoes or something like that. Electronics is the thing to buy during Black Friday. Even today, cyber Monday you will get some good deals. But Friday is the single best a to buy electronics throughout the year. ALISON ST. JOHN: And it's not just hype, this is really true? MIRO COPIC: It's really true in a lot of the very special deals are one time buys, so when they ran out of the inventory they don't have it available afterward. When you see the $99 32-inch LED television television or something like that, they do not order hoping they will carry more inventory. They want to get people in the door that day. ALISON ST. JOHN: And yet we didn't see stampedes first thing in the morning on Friday as a result of these big discounts on electronic goods MIRO COPIC: Although we saw some stampedes unfortunately for those who like to watch YouTube there were a number of Walmart stores and Target stores that had a number of stampedes for toasters, for big-screen TVs, four tablets and so stores are very nervous whether they are opening on Thursday or whether they are opening at the crack of dawn Friday morning, that initial crush is always a concern for store management for a number of reasons, for consumer safety, for things that might be shoplifted and things like that. So they are very concerned. ALISON ST. JOHN: So for the people that didn't participate in this particular frenzy, insanity I mean, have they missed the boat? Are there not going to be good deals from now till Christmas? MIRO COPIC: No. I think as I mentioned since sales were down 3% compared to last year ALISON ST. JOHN: Not good news for the retailers. MIRO COPIC: Not good news for the retailers. You have six fewer days of shopping this year than last year so what you're going to see is during the last week before Christmas and even between now and then a lot of the deals will stay fairly decent. They will stay in the 30, 40, 50% range and you will see some amazing deals closer they get depending on how well they are doing toward the end of the holiday. ALISON ST. JOHN: If you're a savvy consumer kind of hold back, hold back, hold back. MIRO COPIC: Yes in fact it's interesting: by this time about half of all consumers actually start their shopping and the other 50% haven't. Some do it today because it's a more casual environment and there's a lot of fun things about cyber Monday that we can talk about but usually most consumers are fairly, they procrastinate and they will start shopping about a week before Christmas and that's, but a lot of times if retailers to really kick off the Black Friday weekend very aggressively like last year sales were up Black Friday weekend almost 5%. That's big momentum going into the holiday. When you're down 3% you know you're going to do more discounts. ALISON ST. JOHN: So that consumers are off on the right foot, in essence. MIRO COPIC: It's a good thing for consumers this year, absolutely. ALISON ST. JOHN: Okay here we are on cyber Monday and what should a well informed consumer know before embarking on, looking for deals on cyber Monday? MIRO COPIC: Retailers have done a great job at merchandising for cyber Monday. A big reason to buy on cyber Monday is often times retailers will offer free shipping for any order size, you know, in many cases you have to buy $50 or $100 before they offer free shipping. Pretty much free shipping across the board today. You're going to see a lot of bluelight specials, I call them. Every retailer, every hour will have super big specials for a limited period. A limited window. So what a lot of consumers have done is they get their e-mail alerts for their holiday wish list or whatever and they will get e-mailed by whether it's Amazon or Best Buy or wherever you like to buy, an alert that this special product is on so, something is on your wish list so you can get it right there. ALISON ST. JOHN: Absolutely. The best consumers have actually done their homework and have gotten prepared and are not going to cyber Monday blind at all. MIRO COPIC: Absolutely. The smart consumer has actually downloaded the retail apps or other apps that are available that alert them not just to deals in their specific retailers but when the product might be available at any retailer. So that is a very savvy shopper. So rather than being stuck in front of your computer you can have your mobile device, you could be going around during the day and still know that is the case and about 22% of people actually buy their gifts on the mobile device this year, which is a big increase from last year. ALISON ST. JOHN: Well okay. Are there any red flags from cyber Monday? If something is $50 less than it is anywhere else, can you believe it? MIRO COPIC: Generally if you are on a reputable retailer, no it shouldn't be a problem. You're just a lucky consumer having found that. There sometimes there are some if you are surfing the web and you might get redirected to a site that you are not very familiar with and there's very special discounts and they are asking you to provide information I would be a little leery. I would go back and re-type that and see where it gets you. ALISON ST. JOHN: Now if you are looking for a new mobile phone, is is this a good time to buy and what kind of trumps might you be looking for because they mostly come with conditions, Dr.? MIRO COPIC: Yes now smart phones, tablets are the number one electronic product this holiday season and in fact even toy stores like Toys “R” Us aggressively merchandise tablets for parents whether it is an iPad, or a galaxy tablet or something. ALISON ST. JOHN: We all love them, from kids to adults MIRO COPIC: So a smart phone, if you go to your favorite carrier AT&T, Verizon, not a problem some small retailers, one of the things you want to be careful about is whether your locking into a multiyear contract. Whether you are buying the phone what they call unblocked. You are paying the full value for the phone, so they could be $700, $800. Or you are paying a reduced amount that the carrier will lock you into a two-year contract and you might pay a quarter of the price and that is very attractive but that you are committed to their plan. ALISON ST. JOHN: Just a bit about that because I think that's a very common thing is for people to go ahead and sign a two-year contract in order to get a two-year deal on the phone. Is it likely that your second year contract might have actually created more savings for you then the savings remaking on the phone up front if you didn't sign a two-year contract? MIRO COPIC: You are, then the phone is completely yours and you can go wherever you want in terms of the network. Usually for most consumers to really get a high-end smartphone and given their budgets and what they have to spend since they are only spending $407 on individuals getting back to your contract is actually a better deal for that, for them to just kind of preserve cash flow. ALISON ST. JOHN: Anything else to say about cyber Monday before resort of move to look ahead? MIRO COPIC: You know what's interesting is that the difference in cyber Monday versus Black Friday or any time over the weekend is that unfortunately in physical retail you put your discounts out and either you can stop at a certain point in time or you can start them at the beginning of the day and you can stop them. Cyber Monday, they reset all the time. So if you shop from first in the morning till midnight tonight, there will always be a great deal. So don't give up, whatever you're interested in doesn't go on special. About half of us are going to shop first thing in the morning. But 20% of us are shopping as we speak right now and the rest of the third will shop this afternoon. ALISON ST. JOHN: Okay good and if in fact a deal on the phone or something is showing up for you that you like, the best thing is to jump on it straightaway because it's not going to last? MIRO COPIC: It may not last, absolutely. ALISON ST. JOHN: Okay. Don't you think there might be a little bit of burnout. People feel somehow like the shopping frenzy has lasted for five days and everybody is a little sated already at the thought. Don't you wonder whether the shops might find this has been counterproductive in the fact that there's going to be a gap now? MIRO COPIC: It's interesting there's two parts to this people have been hearing about Black Friday for the entire month so they don't know when is really the best time to shop for deals if you hear the first week in November come to this retailer for the Black Friday specials am I getting really the best Black Friday special? They do not know when is the moment of getting the best deal.so until they start opening on Thanksgiving people that Black Friday was a very focused a cyber Monday was another day and now going forward what normally happens with retailers and why the retailers are so nervous is because kind of from about the fourth or fifth of December till about the 15th or 17th there is a little both available at the store, a little online, and so retailers are going to assess after this week and determine whether they really need to redouble their efforts and continue the higher degree of discounts, or they can kind of move forward and make the last push the week before Christmas ALISON ST. JOHN: Interesting analysis. So as a consumer what would you advise people to do if they missed the big deals of the last four days? MIRO COPIC: You know what's good is I think with the ease of online shopping is just keep your eye on products that you like. Most of the retailers will have a wish list and you can literally determine if a deal is interesting enough and then as you approach the Christmas holiday the likelihood if you are seeing continued discounts on that particular item it will be higher toward the holiday. If you are not seeing a lot of discounts and the discounts are relatively low you are not going to, waiting till the last minute is not going to be your friend. ALISON ST. JOHN: You certainly need to be an educated consumer these days don't you in order to take advantage of what is out there. MIRO COPIC: Absolutely and surprisingly consumers are extraordinarily educated they are very smart and they aggressively shop the stuff and I think they do so by necessity given where the economy has been over the last couple years. Even higher-end retailers are feeling a bit of a pinch from higher-end consumers being a little more thoughtful about where they are putting their dollars. They are still spending big money, but they are not spending willy-nilly. ALISON ST. JOHN: Interesting. Listen, thank you so much for joining us, Miro Copic Professor of marketing at SDSU's college of business administration. MIRO COPIC: Thanks, Alison. ALISON ST. JOHN: Happy shopping. MIRO COPIC: You too.

The traditional Thanksgiving weekend holiday shopping bonanza was in full swing this year. But some stores — like Target and Walmart — didn't wait until Black Friday to start offering deals.

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So how important is Cyber Monday now that the holiday frenzy of shopping spans more and more days? And what new tricks are stores offering online customers to grab their attention — and their pocketbooks?