TEXT OF STORY
Tess Vigeland: Last week we mentioned that stores are really going out of their way to attract shoppers this year: big sales, generous return policies, ads telling you that, yes, we feel your pain in these tough economic times.
I don’t know about you – but it feels a little desperate. We asked Ashley Milne-Tyte to track down that desperation on the not-so-busy streets of New York.
Ashley Milne-Tyte: This year, Macy’s really is hoping for a miracle on 34th Street. For weeks it’s been trying to convince worried consumers to step in and spend.
When I was there recently with retail consultant Wendy Liebmann, prices on Macy’s own clothing line were slashed by 40 to 70 percent. Even some luxury items like Coach handbags are 30 percent off.
Liebmann notices something else that’s different this year: easy-to-spot prices.
Wendy Liebmann: So all the gift sets with price signs right out front. Very boldly merchandised pricing, which you tend not to see. You usually figure out that the gift is a certain value but it’s not so overtly signed.
The point, she says, is to signal an item’s affordability right away. As for all those glitzy tops and dresses that usually lure customers around the holidays, they’re not so much in evidence this year. Instead, more mundane pants and sweaters fill the racks.
Liebmann: You know, if people are buying today they’re tending to buy things that they can be pretty safe and sure with. Things that they’re replacing as opposed to new, special things.
At Target, spokesman Joshua Thomas is quick to say they always emphasize low prices. But the chain is not immune from consumer withdrawal: its profit fell 24 percent in the third quarter. Thomas says this holiday season Target is taking some extra steps to connect the value dots for customers.
Joshua Thomas: So the holiday toy catalog features coupons for toys that are on sale during the holiday season and what we’re doing is flagging those items within the store so there’s a direct connection from the toy catalog to the product you actually see on the shelf.
But surely starting sales in early to mid-November as most retailers have doesn’t bode well for their bottom lines? Since major retailers aren’t eager to discuss that, I asked Amanda Nicholson, a retail professor at Syracuse University.
Milne-Tyte: Listen, are retailers gonna make any money if they’re doing all this price slashing?
Amanda Nicholson: Probably very little.
In fact, she says, many smaller retailers could go out of business next year if customers hold back over the holidays. That’s what Wendy Ginsberg is afraid of. She runs Verve, an accessories store in Greenwich Village selling handbags, hats and jewelry. She’s just begun to stock some cheaper items like tiny wallets and key chains.
Wendy Ginsberg: Whereas before people… literally I would have customers come in and just give me their list and we would go through the store and I would be able to pretty much hit everybody on their list at every price point. Now everybody on their list is at a very low price point.
Talking of low prices, many consumers see the web as a bargain hunter’s paradise. Online sales are expected to rise this year. Again, Syracuse’s Amanda Nicholson.
Nicholson: Retailers who have an online presence are working hard with things like free shipping, which I think they’re gonna hold off ’til that holiday crunch period and then start offering it like crazy.
On the flip side, Nicholson says, service at bricks-and-mortar establishments won’t be so efficient. There’ll be fewer holiday staff. Look forward to crazy lines at the checkout, she says. And be prepared to root through piles of discarded sweaters on your own.
Still, a little entrepreneurial spirit could pay dividends this year. Standing outside Macy’s on 34th Street, Wendy Liebmann says some shoppers have decided desperate times call for daring tactics, like haggling.
Liebmann: So about one in five shoppers around the country are saying they are now brazen enough to go into a store and say, “Well, you’ve got 20 percent off. Can you do any better for me? Or if I buy two, can you do any better for me?”
As for how often it works, Liebmann says that depends on the store. She says wise retailers will give senior staff the authority to negotiate, although it’s often easier to do a deal with a smaller store. It’s worth a try she says. Retailers will do a lot to accommodate you this Christmas.
In New York, I’m Ashley Milne-Tyte for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.