By Lauren Zumbach
WWR Article Summary (tl;dr) Christmas may be over but shoppers are still heading to the stores in search of deep discounts and of course to return gifts that did not make the cut.
The holidays are over. Gifts have been exchanged. But retailers’ cash registers are still ringing.
The turn of the year has traditionally been a time for retailers to dump unsold holiday merchandise onto sale racks.
Most shoppers on State Street in downtown Chicago the day after Christmas said they had come in hopes of scoring a deal. But increasingly, stores are also putting new merchandise out after the holidays to encourage shoppers with gift cards or returns to splurge on full-priced merchandise.
Jeanine Konopelski, 53, said she is willing to forgo a discount “if it’s what we really want.” She and her daughter Taylor, 16, of California, were shopping at Anthropologie on State Street while visiting family in Chicago. After-Christmas shopping is one of their traditions, and they had gift cards to redeem.
Shoppers enthusiastically cracked open their wallets this holiday season, according to early sales data.
Consumers spent more than $850 billion between Nov. 1 and Dec. 24, boosting U.S. retail sales 5.1 percent over the same period last year, according to Mastercard SpendingPulse, which tracks spending in stores and online. Online sales rose about 19 percent, Mastercard SpendingPulse said.
But there’s still more shopping activity to come, analysts say.
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Of the 10 days in the holiday season expected to bring the most shoppers to stores, two are after Christmas, Dec. 26, the eighth-busiest day, and Dec. 29, the 10th busiest, said Brian Field, senior director of retail consulting practice at ShopperTrak.
Shoppers visiting stores on State Street on Wednesday said browsing the sales was a holiday tradition, or a chance to reward themselves after spending on family and friends.
“It’s a bargain hunt,” said Kathie Winkelmann, 56, of Lake Zurich, Ill., while shopping after Christmas this week at the Banana Republic Factory store at Block 37 on State Street.
Others were dealing with the aftermath of gift exchanges: gift cards and returns.
Linda Bialek, 63, of Oak Lawn, Ill., stopped at Macy’s on her lunch break in hopes of exchanging a sweater before the shelves grew picked over. The size she wanted was already sold out but she said she’d found two possible substitutes.
“They run out so fast,” she said.
UPS said post-holiday gift card spending and returns mean its busiest season extends into the new year.
Although returns were predicted to peak before Christmas thanks to an earlier start to the holiday shopping season, with 1.5 million packages sent back on Dec. 19, UPS still expected to handle 1.3 million on Jan. 3, said Kat Marran, UPS’ vice president of U.S. marketing.
Retailers are getting better at responding to trends and continually bringing in new merchandise, said Gabriella Santaniello, president and founder of retail research firm A-Line Partners. That means they’re not stuck trying to sell spring apparel to customers shivering in early January winter. It also means there is fresh merchandise on shelves for post-holiday shoppers. If retailers can get those customers to skip the clearance rack, that boosts their bottom lines.
“If someone’s been in the stores, they’ve seen (the holiday merchandise) already,” Santaniello said.
A retailer might take a holiday best-seller and create an updated version in a new color, or cater to consumers committing to resolutions with new athletic apparel and sneakers, Santaniello said.
During the first two days after Christmas, retailers including Lululemon, Athleta, Urban Outfitters and J. Crew sent customers emails promoting new merchandise, not just discounts, according to Milled, a website that tracks retailers’ email promotions.
Some chains call the post-holiday shopping period Winter 2, some Pre-Spring, some the Second Season. Whatever name it goes by, “they’re basically getting a second bite at the apple with customers who have available spending money,” said Craig Johnson, president of Customer Growth Partners, a retail consultancy.
But other shoppers said they were focused on the deals.
Sophia Vittallo, 50, from Park Ridge, Ill., saw a top she liked at Macy’s on Wednesday but kept walking because there didn’t appear to be a discount. She and a friend were shopping with their daughters while waiting for a table at Macy’s Walnut Room.
When it comes to after-Christmas shopping, “it has to be on sale,” she said. “I don’t like to pay full price.”
That’s what makes customers with gift cards to burn particularly desirable, Johnson said.
Convincing someone to part with hard-earned cash can be a challenge, but when someone receives a gift card, “it’s like found money,” Johnson said. “They don’t mind paying full price for something new.”