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By Monica Mendoza – Reporter, Denver Business Journal
Nov 22, 2017, 11:02am MST Updated 2 hours ago
It looks like shoppers will come through for retailers this holiday season.
Holiday retail sales are expected to rise 4.2 percent above last year nationwide. And that would make it the strongest seasonal jump since 2014, said Chris Christopher, executive director, economics at IHS Markit Ltd., the London-based firm with major operations in Colorado.
That’s good news as holiday sales, for many retailers, are the preeminent revenue generator for the year, he said. And this year consumers come ready to shop armed with elevated confidence, employment gains and real disposable income.
Consider this, Christopher said, there will be 820,000 more paychecks hitting consumers’ wallets on Black Friday this year compared to Black Friday 2016, and there will be 3.66 million more paychecks issued this year on the Monday-through-Wednesday run up to Thanksgiving Day compared with last year.
“All of this will boost spending in the Monday through Grey Thursday period,” he said.
On Black Friday last year, small businesses in Colorado saw a 51 percent jump in revenue compared to a normal day, according to data from San Francisco-based Womply, which provides data and software to businesses across the country. The company analyzed 1,500 Colorado retailers last holiday season.
The strong sales may be due to a shift in how retailers market themselves. It’s not just about one blow-out shopping day.
“Over the past several years, retailers have begun their holiday price promotions progressively sooner, not waiting for the traditional Black Friday day to begin offering price discounts,” Christopher said.
Some retailers are promoting sales on Thanksgiving Day to get a head start. And sales will extend past Black Friday.
While e-commerce market share is expected to hit 18.3 percent this holiday season, there is still something about waiting in line well before dawn to get the deal that draws consumers, said Ali Besharat, co-director of Consumer Insights and Business Innovation Center at the Daniels College of Business, University of Denver. And retailers have become experts at creating the hype.
“When you talk about Black Friday – people line up outside the door. We link that commitment to escalation of commitment – there is a commitment to do shopping – they are not going to walk away empty handed,” he said. “That’s when irrational shopping happens.”
It’s a sales tactic, he said, that goes back to the notion of scarcity.
“Manufacturers love to signal it’s a limited supply product and try to create a vibe that if you miss the opportunity, the deal goes away,” he said.
Even so, Besharat predicts that consumers will get up before the sun and wait in lines in hopes of the best deal for years to come.
“Consumers still want to justify the purchase – by getting the lower price – they want to give themselves the feeling that they were careful with money,” he said.
Metro Denver’s small businesses may be counting on the day after the big blowout sale day, dubbed “Small Business Saturday” to boost sales. Small Business Saturday was launched nationally in 2010 to put a spotlight on small businesses the day after the big box bonanzas.
Last year, an estimated 112 million people shopped at small businesses around the country – 13 percent increase over 2015 — and spent an estimated $15.5 billion.
In Colorado, Small Business Saturday was the third-best sales day of the year in 2016 for small businesses, behind Black Friday and Dec. 23. Small businesses did 157 percent of their normal daily revenue on Small Business Saturday, according to Womply. And that exceeded the national average of 138 percent of normal daily revenue.
“Whatever is being done in Colorado to promote Small Business Saturday is working,” said Brad Plothow, spokesman for Womply.
Experts says small business win by offering an experience. Around metro Denver, Small Business Saturday has turned into mini-parties around shopping. Larimer Square downtown will be decorated in white and stores offering up sales; shoppers in Cherry Creek North have a chance to win gift cards on Saturday; Aurora and Denver mayors will visit the Stanley Marketplace Saturday morning; and Denver Pavilions will offer free parking at its underground garage, on Welton Street, between 15th and 16th Streets, on Friday and Saturday.
“Small Business Saturday is of special importance here in Colorado, as we have over 596,000 small businesses that employ 1.1 million in the state,” said Frances Padilla, Small Business Administration’s Colorado district director. “On this upcoming Saturday, it is not as important how much or on what you spend, but instead, where you shop.”
Colorado Mills mall in Lakewood made a point to partially re-open the hail damaged mall in time for Black Friday. And new stores also timed openings to the big shopping weekend and season. Lululemon, a high-end yoga clothing chain, relocated its Cherry Creek North store into Cherry Creek Shopping Center. And it opened a new store in Highland Square store, 3240 W. 32nd. Ave.
“Just in time for one of the busiest shopping days of the year – Black Friday – we look forward to offering our Denver guests with special in-store delights to celebrate the season and new stores, including local live music, light bites and special lululemon ambassador led work-outs to keep all moving throughout the holidays,” said Christina Bakewell, lululemon Northwest area community strategist.