Archive for December 8th, 2009

Online retailers rev up deals to keep up momentum

In this Nov. 16, 2009 photo, Stephen Guymon, left, of Twin Falls, Idaho, and Sanferd Glasses, of Kayenta, Ariz., separate packed boxes for final shipping inside the 800,000 sq. ft. Amazon.com warehouse in Goodyear, Ariz.(Photo/AP)
Forrester Research analyst Sucharita Mulpuru predicts online holiday sales will rise 8 percent to $44.7 billion. So far, the weekend results are “strong reinforcement of how Web sales continue to outpace store sales,” she said. Online sales account for about 7 percent of retailers’ total sales, though that increases to about 10 percent during the holidays, according to Forrester.

Scott Savitz, CEO of Shoebuy.com, one of the largest online shoe retailers, reported that traffic has been robust since Thanksgiving. He expects that Black Friday, not the Monday after Thanksgiving as it had in past years, will mark the first big surge in sales and traffic for his site.

“There is definitely a behavioral shift,” said Savitz. “Clearly, people are seeing that Black Friday will be the start of the holiday season, no matter whether you are online or offline.”

Retail Web sites kept amping up the deals Monday, the first day after Thanksgiving weekend’s strong online sales, to try to maintain the momentum.

Meanwhile, a research firm that tracks business at stores reported tepid sales and customer traffic for Friday and Saturday that confirmed a so-so start to the season for the bricks-and-mortar world.

Though the Web is only about 10 percent of the holiday shopping pie, it’s seen most of the growth so far this year — an encouraging sign after last year’s first online sales decline.

Coremetrics, a Web analytics company in San Mateo, Calif., said that as of 1 p.m. Monday, sales for the day that the industry still pitches as “Cyber Monday” were up 19.6 percent over a year ago.

The bright spot offers hope after traditional retail sales came in just above flat for Black Friday, with shoppers packing stores but sticking to their lists, going for deep discounts and practical items.

Investors voted with their dollars, rewarding online sellers. Amazon.com shares rose $4.17, or 3.2 percent, to $135.91 on a day when stocks of most traditional retailers fell as Wall Street analyzed the sea of data and anecdotal reports from the weekend.

ShopperTrak, which is based in Chicago and tracks sales and traffic at more than 50,000 outlets, said late Monday that retail sales for Friday and Saturday edged up 0.9 percent to $16.77 billion, while customer traffic fell 2.7 percent compared with last year. According to ShopperTrak, U.S. traffic slipped 2.5 percent on Friday, compared with an 18 percent drop in the year-ago period. Traffic fell 3.2 percent Saturday, compared with a 17 percent drop a year ago.

ShopperTrak derives its estimates from crowd-counting sensors in stores, combined with data from the retailers themselves on spending and how it relates to customer traffic.

The ShopperTrak results contrast with a report Sunday from the National Retail Federation on its poll indicating that more shoppers flocked to stores but each spent less than last year.

The dueling assessments show the difficulty of gathering and interpreting holiday weekend results. A fuller picture won’t be known until Thursday, when major retailers report November sales figures.

Deeply discounted electronics such as flat-screen TVs, game systems and netbooks were popular, but more practical items such as appliances and home decor were also big sellers, as consumers took advantage of sales to buy things for themselves.

Many shoppers started looking for online deals ahead of what the industry still pitches as “Cyber Monday,” as retailers stretched their online deals over several days.

Target, Walmart, Amazon.com and other retailers started offering the online equivalent of Black Friday specials on Thanksgiving or even earlier.

They stepped it up Monday. Amazon.com was discounting the Apple iPod Touch 8GB for $158, $20 less than Sunday and $40 off the retail price of about $200. Target.com offered a deal Monday for a Garmin GPS system for $186.99, down from $249.99. Free shipping was also prevalent.

Marshal Cohen, chief industry analyst at market research firm NPD Group, said this year saw the “graying of Black Friday,” because deals that typically occurred only on the Friday after Thanksgiving have been spread out over two weeks.

“The holiday spread itself out,” he said. “On Thanksgiving Day, there’s a new tradition, shopping online before you stuff the turkey, putting the turkey in oven and going out shopping.”

The Monday after Thanksgiving is usually far from the busiest online shopping day of the year, but it is typically one of the 10 busiest. It was dubbed “Cyber Monday” by the National Retail Federation trade group in 2005 to describe the Monday after the Thanksgiving holiday.

The thinking was that shoppers who lacked broadband Internet access at home would wait until returning to work to look online. Now that most homes have broadband, that rationale has faded.

Analysts expect Dec. 14, the last day consumers can order goods and have them arrive before Christmas, will be the busiest online shopping day.

Keith Harris, 36, an IT consultant for Hewlett-Packard, went out Friday for in-store sales, but he waited until Monday to buy a Playstation 3 because Walmart.com offered it at the best price on Monday — in a bundle with two games and a movie, for $369.

“You’re looking for that once-in-a-lifetime deal,” he said.

China goods to world ,Ad sells

Two years ago, he bought a Chinese-brand LCD TV for 12,000 yuan ($1,758) in favor of Japanese and Korean ones, which he said were priced significantly higher.

“I don’t think Japanese or Korean ones are four times better than Chinese ones, as shown on the price tag. My made-in-China TV works quite well,” he said.

One of the latest Hollywood blockbusters, titled 2012, has “for the first time … cast the Chinese as good guys,” the Christian Science Monitor commented on its website last week, noting the movie’s depiction of China-made arks saving humanity from an end-of-days catastrophe.

Chen Hao, whose family-run factory in Zhejiang Province is a supplier of plastic pipelines and sofa rollers to Ikea, said the stereotype born by many foreigners that made-in-China products are of low quality should be eliminated, as China has good-quality brands such as Haier on the world markets.

“Chinese products deliver good value and good quality as well,” he said. “Otherwise they wouldn’t have survived, sustained and sold well all over the world for more than two decades.”

Song Shengxia and Liang Chen contributed to this story
A model wears fashion from the Vivienne Tam spring 2010 collection, as part of fashion week in New York on September 12. (CFP Photo)
The government has launched its first-ever global ad campaign to convey the message that Chinese-made commodities are the result of joint work between China and the world, which is enjoying better-quality products that benefit everyone.

Though they are taking different stances on the ad’s potential effect, analysts have generally applauded the government’s move to eliminate the stigma that “Made in China” often carries, particularly in light of recent claims of trade protectionism.

The 30-second ad, themed “Made in China. Made with the world,” was rolled out last week on CNN in the United States, CNN in Asia and CNN Headline News.

The ad depicts a series of Chinese-made products, designed by or containing shared technology with other countries, and highlights their quality.

For instance, it features morning-exercise sneakers that are “Made in China with American sports technology,” an iPod-like MP3 player labeled “Made in China with technology from Silicon Valley,” and a model wearing fancy outfits that bears the label “Made in China with French designers.”

“We started producing the commercial mid-last year and deployed the most talented foreign designers to create it,” Zheng Rick, a staff member with the DBB Guoan ad agency, producer of the ad, told the Global Times without elaborating.

The ad, commissioned by the Ministry of Commerce and a number of trade bodies, was postponed after the tainted-milk scandal in August, according to media.asia, a website that tracks the marketing industry in the Asia Pacific region.

“The commercial is based on the concept of cooperation and participation, trying to convey the message that China joins hands with the world to produce high-quality products for consumers,” the ministry told the Global Times in a faxed statement.

“‘Made in China’ is actually equivalent to ‘Made in the World,’” it said. “It benefits both China and the world through cooperation.”

Chinese analysts welcomed the ad campaign, saying it is good for the government to take the initiative to promote the image of Chinese-made merchandise.

Zhou Shijian, a former trade official for China, said it could be beneficial for China to pol-ish and reinforce the reputation of “Made in China” products.

Yu Guoming, associate dean of the School of Journalism at Renmin University of China, pointed out that the government is trying to persuade the world not to bar conspicuous Chinese commodities.

China made this move apparently on the backdrop of the US and EU becoming increas-ingly wary about the Chinese products taking over their domestic markets, and the two governments have been putting up trade barriers in the name of anti-dumping investigations, Yu said on Phoenix TV Monday.

While suggesting that the government consider improving the style and direct ap-proach of the ad, the analysts said China also needs to improve its technology, so that it won’t only be a producer for foreign designers.

‘Made in China’ fears

As China-made goods flood the world, the saturation has sparked reports in other countries of worries about jobs being taken and quality concerns.

Claims such as a 2007 Associated Press story headlined “Is ‘Made in China’ avoidable?” are common in the United States. The story noted that US shoppers were trying to fill their shopping carts with products free of ingredients from China, but “The trouble is, that may be almost impossible.”

Andrea Gomez, an American in Beijing, said that she is likely to associate Chinese products with bad quality.

“A lot of toys and some electronic products made in China are of poor quality,” she said.

However, John Johnson, an English teacher in Beijing said “Chinese products do not necessarily mean poor quality.”

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