You've probably heard the bad news: Early numbers show that December same-store sales fell about 1 percent from last year, despite steep discounts and bargain-hunting shoppers.
But what you may have missed is the good news. Really. Consumers got deals and finally learned to save. Retailers were forced to learn what it will take to survive a recession. And some even emerged as shining stars.
Here are six reasons why the so-called dismal holiday season actually is cause for cheer:
Shoppers got great deals. Low prices, especially on consumer electronics, made Blu-ray DVD players and LCD televisions two of the most popular gifts this season. Dan de Grandpre, chief executive of Dealnews.com, says that at one point he saw a 42-inch LCD television going for $500. Even luxury retailers such as Saks Fifth Avenue and Nordstrom were taking up to 40 percent off and offering free shipping. That meant those looking to upgrade their home entertainment center or redo their wardrobe were able to do so without breaking the bank.
It set us up for a stellar '09 season. Retail success is all relative. Each month or quarter, companies report how much they sold relative to the same period from the previous year. This year's low numbers mean next year—the 2009 holiday season—will have an easy time impressing analysts. Sure, it's sort of like gaining weight just so you can say you lost it, but it still means we've got some good news coming our way.
The slow season led to some incredible travel deals. Chris McGinnis, editor of the Best Western blog You Must Be Trippin', says two areas are particularly ripe for steals: Hawaii and cruises. "Hawaii has not been this cheap in a long time," he says. Round-trip tickets are as low as $300 from the West Coast and $500 from the Midwest. McGinnis will head out to Hawaii later this month, and he says he will get a car for just $33 a day and a hip hotel for just $112 a night. He estimates that he'll spend just $600 to $700 for a four-day getaway—about a quarter of what it would have cost last winter. (He'll be using frequent-flier miles for the airfare.)
As for cruises, McGinnis has spotted trips out of Florida to the Bahamas for as little as $25 a night. Those low prices are for an interior cabin (no ocean view), but, as McGinnis points out, people tend to spend little time inside their cabin.
Useful comparison websites thrived. Websites that help consumers save money became almost as sought after as celebrity news sites this season. PriceGrabber.com, BradsDeals.com, and Dealnews.com were just a few of the winners. Why is this good news? Because they pass on information that helps consumers save big, recession or not. The more visitors they get, the more powerful and useful they'll become.
The fittest shops survived. Amazon emerged as one of the big winners, with the online megaretailer announcing its best season ever. Stores known for keeping costs low, such as Wal-Mart, have also led the pack over the past several months. (December same-store sales for Wal-Mart were stronger than most competitors' but were still lower than expected.) The message to retailers: Shoppers want inexpensive goods, and if you want their business, you better give it to them. While it's not an easy lesson for companies that have long relied on their brand names to allow them to jack up prices and earn comfortable profit margins, it seems to be the only way to succeed moving forward.
Even the stores that struggled came away with valuable lessons, says Ellen Davis, vice president at the National Retail Federation. "I think retailers were really challenged this year to make more with less, and I think ultimately that will make them become better businesses," she says. Stores had to figure out how low they could push prices while still making money, as well as how best to use store employees and marketing dollars, Davis adds.
We made smarter choices. The savings rate has been rising as consumers get more worried about the dangers of debt. Retailers brought back layaway programs so shoppers trying to avoid credit-card debt could still pay a little bit at a time. People gave each other time instead of pricey baubles. Says consumer psychologist Kit Yarrow, "There's a shiny, bright silver lining in that people are connecting with each other more this year. . . . I think people gave more thought to what's important in their lives. Spending can become habituated, and a shock like this brings it all back to consciousness."
All of those changes add up to a healthier American consumer—and perhaps one ready to spend anew next holiday season.