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Michigan retailers have high holiday hopes
By Karen Dybis, November 20, 2012
Michigan retailers expect merrier sales this holiday shopping season, but it will depend on cautious shoppers who experts say may need extra prodding.
Stores in Metro Detroit and around the state already have increased their holiday hiring and shown off initiatives such as liberal return policies, price matching and aggressive out-of-the gate pricing to counter online competitors.
A Deloitte LLP survey of Michiganians found shoppers expect to spend 2.2 percent more for the holidays this year than in 2011 — better than the 1.2 percent increase in a similar survey of U.S. consumers for the National Retail Federation.
Buyer surveys find that middle-class customers in particular feel less likely to splurge on big-ticket items. Add the threat of tax increases and government cutbacks scheduled to take effect early next year, and people are tightly holding their wallets and pocketbooks.
"Shoppers have one foot on the accelerator and one on the brake," said Mark Davidoff, Michigan managing partner for consulting firm Deloitte.
This season, retailers know that getting customers to spend is all about balance. They are sending email deals, but focusing them on loyalty club members. There are special online offers, such as free shipping via Facebook offers.
"One saving grace is that retailers have managed to increase their margins by operating more leanly as a result of the downturn, meaning that these stores have ample room for discounted merchandise if necessary to move sales along in the wake of fiscal uncertainty," said Melinda Crump, a spokeswoman for financial information company Sageworks Inc.
As a result, shopping centers, big box stores and independent retailers are primed.
"We're not hearing that customers are spending less. We're hearing they are looking for the best prices," said Cathy O'Malley, general manager at Dearborn's Fairlane Town Center. "We'resharing information through our Facebook page, e-bulletins and radio ads to letour audience know we have the best deals in town."
Deloitte's Davidoff said Michigan's optimism is warranted, considering the state's lower jobless rate, improved state government budgeting, a year-long boost in housing prices and the recovery of the auto industry.
"People are generally tired of being concerned. They're tired of the economy's malaise," he said. "There's a desire to be positive — maybe if we think and act that way, that will cause a change for the better."
Retailer polls reflect this. Three out of four Michigan retailers expect to increase sales this holiday season, many by more than 5 percent, according to the joint survey of Michigan Retailers Association and the Federal Reserve Bank of Chicago.
"Retailers believe there is a level playing field with e-commerce. They know people will shop online and use their smartphones, so they're rising to the challenge. That means offering a lower price point and price matching," said Jason Buechel, a retail practice senior executive for Accenture, a management consulting firm in Southfield.
"They're really trying to meet the needs of their customers. Take return policies. Over the last few years, retailers were saying customers had 30 days and must have a receipt. This holiday, some are stretching that to 90 or 120 days."
Moosejaw Mountaineering's CEO Eoin Comerford said the 11-store chain has seen a rebound in Michigan's retail climate during the past three years. Sales are strong on branded merchandise such as North Face and Patagonia, but the Madison Heights-based outdoor retailer also is seeing a rise in its private-label gear.
"This year, we're very bullish," Comerford said.
Making things festive with holiday-themed products, free holiday shows and shopping events has proven successful so far for Pewabic Pottery in Detroit.
"We try to make a trip to Pewabic a delightful experience for shoppers, complete with refreshments, door prizes and live music," said executive director Barbara Sido.
Michigan retailers hope locally produced products will be a hit with consumers. Lisa Diggs, founder of the Buy Michigan Now campaign, works with her 3,400 members to encourage shoppers to spend some of their gift-giving budget in the state.
In Detroit, the D:Hive welcome center and storefront provides pop-up retail Monday through Saturday for locally made and sourced products — including online access for orders.
"We do more shopping during the holiday season than at any other time, so this is arguably the best time to make conscientious buying decisions," Diggs said.
For the full story featuring Sageworks visit The Detroit News - Michigan retailers have high holiday hopes.