Deep Discounting Continues - Cyber Space and Shelf Space

At the beginning of the season, it was mentioned that holiday shopping would not see excessive discounting like last year. Whether that was a sales ploy or honest fact remains to be seen. So far this year we saw introductory pricing at about the same levels as the regular season. Last month prices were still high on holiday decorations, travel, dining, entertaining and luxury goods.

This month, however, we are past the Thanksgiving holiday crunch of retail prime time and are heading into
what is the big question mark this year for retailers. Already we know that inventory is below regular levels for seasonal sales. So retailers have bet the farm on moving what is in stock. They absolutely do not want to be stuck like last year with excess inventory which led to massive sell offs after Christmas. Although the retail world tends to lend a blind eye to the economy you can guarantee with the current unemployment rate they are shaking in their boots about goals for this year. This week I have seen an additional 10% markdown on merchandise like artificial Christmas trees, dining discounts, airfare and hotels. So in theory, it is a great time to decorate, take a vacation, buy a house and stock up your freezer for holiday feasts. There was not a lot of hiring this year for seasonal help so if there is a big rush stores might be understaffed. Another reason for markdowns to get that stuff off the shelves NOW.

In the Cyber world, today being Cyber Monday, the competition could not get stronger. I am seeing major discounts on shipping, buy one get one free, discounting up to 20-30% off, and guaranteed holiday delivery.
Nothing to do but push a button. Hence the name Cyber Monday, so if you are shopping online today at work you are officially caught. However, if you must get it done TODAY, the deals are there. You can virtually pick your favorite product and find a great deal online for the offficial online holiday shopping day. What happens with a click of your mouse tomorrow? That remains to be seen. That is the beauty of the internet, everything is in real time so what might be profitable today, may be a loss tomorrow. Tweet that in your pipe and smoke it.

The economy is gambling right now, on stakes which we have never seen before. I am wondering if Vegas is taking bets on the odds at this point. They should. But for all of us in the real world, hold on for what is to be a bumpy sleigh ride and will predict what we can expect in our economy by sales projections into 2010.