What to Expect from Retailers This Holiday Season

A behind-the-scenes look at how stores—and shoppers—are gearing up for the shopping days ahead.

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So far, most signs point to a very merry holiday season for retailers and shoppers alike. Early numbers from the National Retail Federation (NRF) show that shoppers spent almost $400 apiece on Black Friday weekend, up from $365 last year. Surveys also indicate that the spending will continue through December; the NRF expects overall holiday sales to increase 2.8 percent over last year.

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That doesn't necessarily mean that people feel more optimistic about their financial lives—many don't—but they're finding a way to shop anyway. Some shoppers "are allowing themselves to enjoy purchasing again and figuring out ways to cut back in some areas in order to make pleasure purchasing part of their lives again," says consumer psychologist Kit Yarrow. In other words, many people are tired of being frugal, and they want to enjoy the holidays despite the economy.

"This group of consumers had an initial knee-jerk reaction to the recession and snapped their wallets closed. They are now adjusting for the long haul," adds Yarrow. Instead of responding to external economic forces, consumers are trying to take control in any way they can, she says.

Another driving factor is the deep discounts retailers are offering, many of which will continue all season long. "There's a new breed of shopper that finds bargains irresistible. When they score a deal, they feel triumphant and more in control," says Yarrow. With televisions, tablets, and e-readers more affordable than ever, these shoppers are pouncing. "It's like a tiger has escaped the cage," she adds.

Retailers, who are hungry for a successful holiday season, are going out of their way to lure shoppers with discounts, earlier openings, and better service. Many of the biggest retailers, including Toys 'R Us and Wal-Mart, got a jump-start by opening their stores at midnight or earlier on Thanksgiving. "From a retailer's perspective, early Black Friday openings and Thanksgiving night openings are simply to get a larger share of the customer's wallet," says Ellen Davis, vice president of NRF.

Free shipping for online shoppers and free samples for in-store buyers are also more common this year. About half of consumers surveyed by consulting firm Deloitte said low prices were their top priority for shopping at a particular store, and 7 in 10 said they were more likely to shop online at retailers offering free shipping. Shoppers plan to do a record 36 percent of their shopping online this year, according to the NRF, with most retailers anticipating online sales growth of 15 percent or more.

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To guarantee they get the lowest price, many consumers are inventing a new form of hybrid shopping, relying on a mix of in-store browsing, smartphone research, and online purchases. In fact, the Deloitte survey found that 6 in 10 people who shop with smartphones use their devices to check prices or compare products while inside retail stores, and 38 percent scan barcodes with their phones to find information about discounts and coupons.

Apps such as the free Pricegrabber app allow users to scan barcodes and quickly pull up price comparisons. "That's where we've seen a big uptick—people are doing price checks from their phone," says Graham Jones, general manager of Pricegrabber.

Retailers are also creating their own apps and reaching out to customers over social media channels such as Facebook and Twitter. The NRF survey found that among retailers already using social media, 73 percent have beefed up their Facebook accounts to prepare for the holidays and 41 percent have invested in their Twitter accounts.

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Stores are taking a more proactive (or, to some consumers, spam-like) approach to announcing promotions, by sending more e-mails to customers throughout November and December. Mobile apps play a role there, too; customers will read 2 in 10 e-mails from retailers on mobile devices, according to marketing software company Responsys.