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Consumers Demanding, Sales Strong: US holiday sees double digit start

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Finally.  What else can we say?!  As Susan Lyne, chairman of Gilt Groupe Inc., offered in this interview with Bloomberg, first it is important to make consumers comfortable with spending again, even at the cost of not making margins to get entry sales, such as US $200 flat-screen TV, then they may ease into buying more (see this report from Reuters).

It appears that this strategy was successful on Black Friday and Cyber Monday which ended with sales up dramatically (see this report from FT).  Retail sales for Black Friday in the US were up "[…] 16 percent, and shoppers spent $398.62 on average, up from $365.34 a year earlier," according to this Bloomberg article; and Cyber Monday results show an equally strong double digit rise of 18% year-over-year, according to this WSJ article.

 

While these numbers are for the entire retail sector, department stores and tech sales are among the biggest gainers from the high volume shopping days.  Among the 'tech gadget' winners, are the still hot consumer electronics, smartphones and tablet PCs.  However, the lingering question for everyone, across all industries, is whether the shopping momentum will hold or if consumers had saved up to spend on what they hoped were the best deal days and now will go back into hibernation.

How consumers spent this year is almost as noteworthy as the sudden, strong surge in US sales, particularly in what has been a very soft and demand-sparse year.  According to this report from WSJ, "eBay Inc.'s PayPal unit said that as of the early afternoon, payments made on mobile devices increased 514% on Monday from a year earlier."  This increase in mobile device payments is important as it opens the doors further for increases in other types of mobile payments, such as NFC payments.  The hope is that the increases in mobile payments heightens NFC demands, which, in turn, trickles down to demand for SWDs with new chipsets that support these features (as well as the terminal hardware businesses will need).

In short, so far the US shopping weekend has met the needs and wishes of retailers across industries.  For tech, the added increase in mobile devices as the instruments through which many of those sales were transacted is important for ongoing penetration rates and for increased demand for supporting chipset architectures.

Let's hope the holiday spending mood continues for consumers and for enterprises.


Lisa Ann Cairns, Ph.D.
Written on Tuesday, 29 November 2011 09:13 by Lisa Ann Cairns, Ph.D.

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