24 Aug Back-to-school meets Santa Claus
Toys”R”Us and Walmart got a very early jump on the holiday shopping promotions machine this week — for Christmas, not Halloween — by announcing price-matching and layaway policies for the most important sales period of the year.
Their unseasonable entree is indicative of how much more competitive it will be this year for stores to attract consumers who are closely guarding their wallets.
“They’re going to be out there marketing Christmas early — the creep is going to continue,” said analyst Ken Perkins, of Swampscott’s Retail Metrics. “Consumers are not seeing significant wage gains, so there’s not a particularly large, growing pie of discretionary dollars to spend. We’re seeing it in back-to-school, and I think we’ll see it again in the holiday season.”
As a result, retailers have to be pretty promotional to drive traffic and sales. Toys”R”Us expanded its in-store “price match guarantee” to include pricing from e-tailers such as Amazon, Walmart.com, Target.com and BestBuy.com.
“We want to take away any concerns our customers might have about maximizing their budgets,” chief merchandising officer Richard Barry said in a statement.
The announcement came a month and a half earlier than Toys”R”Us’ introduction of its price-matching program for brick-and-mortar competitors last October.
Walmart, meanwhile, will roll out its holiday layaway program earlier this year — on Sept. 14; Sept. 11 for Facebook fans — and will eliminate the $5 opening fee. It also increased the number of items available for layaway to 35,500, from 34,500.
“Times are tough and it’s not easy for many Americans — they are watching every penny,” chief merchandising and marketing officer Duncan Mac Naughton said in a statement. The company reinstated a $10 cancellation fee, however.
Walmart last week attributed softer-than-expected sales to cautious consumers. Its lower-income customers, in particular, are stressed by higher payroll taxes and gas prices, and they haven’t benefited from a stronger jobs market or wage increases.
The beefed-up layaway program is a smart move that caters to a consumer trend, born of the Great Recession, of not wanting to accumulate debt, said Jon Hurst, president of the Retailers Association of Massachusetts. “Layaway is all about those early shoppers who want to … lay aside some gifts without putting the whole cost on a credit card,” he said. “If you’re going to do a layaway program, you probably want to start announcing it and promoting it when the consumers are in the stores for back-to-school shopping. A lot of these types of holiday gifts are impulse buys.”