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Stores try to make holiday shopping cheap and easy

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POSTED November 21, 2012 10:19 p.m.



 

NEW YORK (AP) — This holiday season, Burger King won't be the only place where you can have it your way.

It used to be enough for stores to promise discounts up to 70 percent to lure shoppers during the busy holiday period. But the ease of ordering online and the sluggish economy changed that. Americans are no longer impressed by discounts alone. Now they want their shopping just like their fast food: not only cheap, but convenient too.

That means they're no longer afraid to walk away from the cashmere sweater with the perfect fit if the store is crowded. They're unwilling to buy those suede pumps in just the right shade of blue if shipping costs extra. And they cringe at the prospect of carrying around paper coupons; they'd rather pull them up electronically on smartphones.

Retailers from Wal-Mart to Macy's are doing everything they can to make it easier for more finicky shoppers to spend during the holidays. Several are opening on Thanksgiving Day. Some are offering free layaway and shipping. Many are matching in-store prices with cheaper online deals. Others are allowing shoppers to buy online and pick up their merchandise in stores.

It's the latest effort by stores to court shoppers like Patty Edwards of Bellevue, Wash. Four years ago, Edwards made all of her holiday purchases online through Amazon because she thought it was the easiest way to shop. But this year, she plans to go elsewhere because stores are offering more shipping options.

"Now I'm not necessarily tied to Amazon," said Edwards, a retail analyst and principal at investment firm Trutina Financial. "I can go to Nordstrom, Saks or Target and have stuff available to pick up. It's a pretty simple process. That wasn't the case four or five years ago."

The have-it-your-way approach is partly a response to fear. Merchants are concerned that shoppers will spend less freely this season because of worries about high unemployment and a package of tax increases and spending cuts known as the "fiscal cliff," which will take effect in January unless Congress passes a budget deal. The changes also come as the growth of smartphones and tablet computers has made it easier to browse and buy with the touch of a fingertip.

That puts pressure on brick-and-mortar retailers, which count on holiday shopping for up to 40 percent of their annual revenue, to get shoppers into stores. It's becoming an increasingly difficult feat: The National Retail Federation estimates that overall sales in November and December will rise 4.1 percent this year, below last year's 5.6 percent growth. But the online part of that is expected to rise 17 percent, according to research firm comScore.

"Retailers have to do a little more to grow sales this year," said Frank Badillo, a senior economist at consultancy Kantar Retail.

This isn't the first time stores have had to up the ante. As Americans cut back on spending during the economic downturn, merchants ramped up their already deep discounting.

Shoppers became addicted to the ever bigger sales, and they began fleeing to online retailers, which can offer much cheaper prices because they don't have the same overhead costs to operate brick-and-mortar locations. Plus, websites offer the convenience of shopping in the comfort of homes or office cubicles.

To better compete, brick-and-mortar stores concluded that they would have to replicate their online rivals' formula. Shopping needs to be cheap and easy, they figured. So stores began trying new ways to make shopping more convenient last year, such as free shipping and expanded hours.

Danny de Gracia, a political scientist in Honolulu, likes using that option to avoid the hassle and crowds in stores. Gracia, who said he plans to spend no more than $1,000 this holiday season, last used the service to buy a Sony digital camera for his father at Best Buy.

"It's an outstanding service that I utilize whenever possible," he said. "I wish that it would be available for groceries."

Shopping apps are an attempt by brick-and-mortar retailers to hook shoppers like Stefanie Scott of Greenfield, Wis., who plans to spend $1,000 to $2,000 on gifts this year.

Scott starts her holiday shopping by checking out deals on Facebook. Then, she brings her smartphone along on shopping trips and uses mobile apps to get discounts once she's in the store. She's also a fan of offers to buy online and pick up in the store, and recently used one at Best Buy to buy a videogame for her brother-in-law.

"I'm tied to my cellphone," she said. "Coupons and lists get lost in my purse. It's so much easier when I'm shopping to whip out my cellphone and have them scan it. The more I can do on my iPhone, I'm all for it."

 

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