STOCK MARKET WATCH -- Tuesday, 28 October 2014

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33. Discount-Hunting Shoppers Threaten Stores’ Holiday Cheer

http://www.bloomberg.com/news/2014-10-28/discount-hunting-shoppers-threaten-stores-holiday-cheer.html

Laura Pettee, a 45-year-old mother of four, would seem like an ideal customer for retail chains this holiday season.

She dropped $4,000 on Christmas gifts last year and plans to increase her spending this time around. But chasing Pettee’s money comes with a catch: She won’t buy anything at full price. The stay-at-home mom, who lives in Bronxville, New York, also skips Black Friday and won’t spend much time browsing in stores. She researches items online before she buys and expects to do about half her shopping on the Web.

Pettee represents the increasingly harsh reality for U.S. retailers. Though holiday spending is forecast to rise 4.1 percent this season, more of those dollars are shifting online and shoppers are demanding additional perks from brick-and-mortar chains. The trends -- years in the making -- have made it harder for retailers such as Target Corp. (TGT) and Wal-Mart Stores Inc. to shake off a sales slump.

Consumers frequently look for deep discounts before making a purchase, and they already know what they want ahead of time. That means they’re not as easily swayed by time-honored retailer tactics, such as luring customers with store displays and encouraging impulse buys. To get an edge, Target is offering free shipping on all orders for the first time. And Toys “R” Us Inc. sweetened its loyalty program, offering as much as $10 for every $125 that shoppers spend.

“I rarely pay retail, especially for Christmas things,” said Pettee, who keeps track of her spending for about 40 people on a spreadsheet. “And when you’re starting this far in advance, there’s no need to.”