Reuters Insider - Webinar: Holiday cheer or fear?

Pacific Ventures

22/11/2013 13:54

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 Source:             Thomson Reuters                                   
                                                                       
 Description:        We take a look at the Reuters IPSOS poll for the  
                     2013 holiday season with our StarMine expert      
                     Jharonne Martis.                                  
 
 
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 Short Link:  http://reut.rs/HDsbzC  
 
 
 Transcript (May be auto-generated)                                    
                                                                       
 Is getting it around the corner and that's especially the green light for holiday shopping. So Thomson Reuters along with -- that was conducted deep hole on holiday shopping trends covering everything from how much people are planning to spend. To what they're spending their money -- but check out some of the results. -- Com and some. Some in the -- Yeah. And. It joining me now as you're on March -- not only initiate fast in east that's a -- obviously. Which she is director consumer research here at Thomson 
 Reuters start -- OK so the covered about 800 adults and teens right. If you -- to and sign a tagline today as the theme of this poll for the holiday season. What would you give it. Probably the congress that unethical and Christmas box. It didn't work percent of respondents. That they are going to be very cautious with their spending this holiday season. Because of the government shutdown and the uncertainty in the economy and as a result we've already seen that retailers are becoming a little bit 
 desperate. Because shoppers are not shopping gave up we tell us have already had a very lackluster year. Back to school with less than stellar. So the becoming -- of a desperate and they're talking about deep promotions everywhere going into the holiday season sent congress a bit like the grinch that congressman lifestyle and that's. All right so at this point now how many people have done their holiday shopping. Not even half. So a lot of the respondents have not completed the holiday shopping. One thing 
 that happens every year is that we know is that consumers liked it for casting me. But one thing that's gonna bring that shoppers to the stores are steep promotions and this is where retailers have to be careful. They asked by for example they said yesterday. We know it's very promotional out there and it's our competitor it's gonna offer steep promotions so our week even if it hurts margins as a result the stock declined. So we just have to be very careful in order to how much they can offer an order not 
 heard from them margins okay we'll get into and discounts -- promotions a little bit later on don't ask you. Bricks and mortar reverses online -- to the breakdown there. Well it's going to be very key this holiday season even for retailers that already missed earnings expectations like Abercrombie & -- today. They saw an increase in e-commerce online presence by 10%. Best -- 50%. And even target was able to -- fourteen million dollars over the last six months by offering digital. Coupons so they do now that 
 that the consumer is going more online and they're moving with the times. You have to have I really got website mobile social media presence going into the holiday season having said that. Consumers felt preferred -- instance in store shopping experience rather than shopping online. And in order to bring them into the stores they're gonna have to happen promotions. Now consumers might not be opening up their wallets but where they are spending is at the jewelry and home improvement and it's sector. 
 Interesting okay something else that will -- into the deeper dive under the labor what did you actually because we have a question from a viewer out there. And the question is what percentage of consumer spending will be influenced by the actions of the Fed it. A significant amount in fact what we're seeing already and -- personal savings has been on the rise. Which isn't very similar trend that we saw during this past recession. Which shows that consumers are very concerned about losing their jobs and they 
 wanna have money in the bank in case they do lose their jobs. So again it underlines the importance of how. Stingy frugal consumers are going to be the holiday season. Interesting okay. Getting back to -- tuchman online before Amazon of course the elephant in the room and -- had a big vehicle out their platform out there. Any vulnerabilities. Yes actually -- going for the most part revenue has been on the right spent where they've seen with weakness is in our international exposure. Because of the foreign 
 exchange rates. So what if this continues. To be the case it could hurt their earnings but not much because strengthen the United States this bill is still bigger. And in international space something that Amazon's going to be selling of course and is selling. Tablets tablet wars is really heating up where do you see things stand as we -- the holidays well apple is the preferred tablet most respondents. Gravitate towards the apple followed by the some cents Samsung galaxy. And if this is very important for 
 margins for them because when you look at the latest that's the five C. And that's a lower margin product whereas apple I pat produces bigger margins. I'm having said that analysts are very optimistic because they believe that apple C a 6% jump in revenue this holiday season. And even impressive 10% jump and I -- sales right OK somebody else who sells tablets best buy best. Along with JCP you touched on best -- earlier along with JCP have been too big turnaround stories this year. What they need to do what 
 else you know keep it up for us some more than -- in addition to JCP. To get things going how important is the quarter for them and how to they sustain any momentum going forward. Qualities penny is trying to re gain back that core consumer that they flops and by doing so they're really doing a press. When their marketing and new products and communicate this to their core consumer and bring them back. And as a result analysts optimistic and the retailers expect to post its first positive seeing source -- 
 This holiday season so if they are able to really communicate with the court and so remembering back. That bodes well for the next year for them. Now best buy on the other hand they've been a victim of show -- where consumers come in the star and -- play what I am and then go online and buy it for cheaper. This year they're trying to use that -- fat so they want you to come into the store play what the item. But this time there's no reason for you not walk out with -- because they've already. Train their 
 customer service to give you the best information on the product. An offering price matching so if you're in the story you can tell them hey it's cheaper somewhere else they will match the price for it and ship it for free. And it keeps the room that they're actually just grabbing you by the collar directing you. To check -- well it can't actually -- indirectly they actually they are you angered -- -- okay right so -- we search. Who's leading in terms of same store sales projections going it. Plus and 
 should fame be. In terms of sectors we're looking at jewelry home improvement. The discount is a fact that debit respondents of the survey indicated that they won't stop at a makes a source with the discount or taking the lead. And when we dig deeper into the discounters -- find that the dollar stores are on top. The consumers now that they can go there to -- the tape that wrapping paper and even snacks to entertain at home. And others in -- there responds in the survey also indicated that they wanna save 
 money. On gas so they wanna shop nearby there house and they can do so at the Wal-Mart. At this Sam's clubs and -- can fill up the gas while buying groceries for the holiday season but you also mentioned Hillary which I'm sure very promising for a lot of people out there -- a lot of women out there yet when they saw Hillary it's interesting because the US consumer itself. It's still being moderates that they are gonna go to his sales. Now in our national consumer is gonna go to the high -- Tiffany's Thor. 
 So what we're seeing is when you break down -- Tiffany numbers you can see within the United States only about this plot seems our sales which is not impressive. However there's strength is coming from the New York flagship -- Which has all the tourists that visit from around the world. And also their Asian division which shows that the affluent Asian consumers they'll try to market. That's -- just hop skip and a jump from us where we're -- it right here dangerous and it is very very dangerous. Okay so in 
 terms of how much money people actually be spending. This year compared to last year this. While last year at the range was between 250 dollars to let the house. And now the court consumer is trying to lower that reached 200. 500 dollars. And that's goes in line what are Thomson Reuters same store sales expectations. Which is that we're seeing growth for the holiday season at one point 8%. This is slightly stronger than last year but still below the 3% -- which shows that consumer spending for the holiday 
 season is going to be modest. I sleepers out there anybody who's really get a jump out and surprise us -- doing well this holiday season. Yes so we actually. Look at a 129 retailers and we created at retail earnings growth in packs. And by doing so we found the strongest sector are online. And to retailers that really stand -- -- Netflix and Amazon. Now Netflix if you look at the entire S&P 500. There in the top five when it comes to earnings growth they're expect opposed. Over 400%. Growth that's impressed 
 -- And what's gonna happen is this holiday seasons Martinis are going to be very popular. And they already come up come what a version of Netflix load it on them and actually offering promotions to entice more subscribers. On the other hand we have Amazon Amazon. Their core consumer is actually the prime subscribers -- what you can actually get shipping today free shipping. Witten on what your subscription 79 dollars and these court consumers are the ones that spend the most. What's great for him which 
 bodes well for Amazon is that last watered -- -- a huge increase in prime subscribers. So that's why analysts are so confident and an Amazon goings on -- season. And the gravy is of course if your product subscriber you get the streaming video that similar you know obviously that what Netflix provide revive a wonderful we having this same conversation next year given Amazon's plans for the set top box. What rankles -- when apple more competition may or may not do it sometime in the future -- -- -- for 
 Amazon what's gonna work for them is -- continued to increase that prime consumer and they're already working on itself. What they're doing is in order if you're not a prime. Subscriber you go onto their site. In the past used to have to spend at least 25 dollars to get free shipping. They've increase that minimum to 35 dollars according to encourage more people to subscribe to Amazon prime. And very Smart tactic and also they're fighting next connect with eBay to offer saying they -- for the -- season. 
 Okay let's talk the -- okay I know you and I talked a lot about the very fickle tastes. A lot of teen retailers getting really hit hard. One bright spot though has been urban outfitter and free people. Did did teens wanna be flower children and that's kind of what they're design is right what's in store the team while those that how little money or to -- -- and those that have money will go to free. People look at it's a lot of them aren't higher and an analyst I'm very optimistic of the you know of this 
 retailer because of their. Very loyal consumer base they are willing to pay full price for the merchandise and management has been a really good job -- inventory control. Area so. And that's -- the and they have the strongest on things for -- estimate for the holiday season. On the flip side the up thinking teenagers that don't have that much amount of money to spend their being frugal. And they wanna have the latest fashion trends in the best place for them to go for this this where between one each and so 
 instead of going to add a comment sentence spending fifty dollars on -- they can buy ten of those at forever 21 HM it's that's who's stealing most of them. So is it just the fact they're getting discounts there or are they getting just a wider variety of styles because that's what those three days that it hit so hard Abercrombie. Our post all rights and American an American Idol as well. Are they just have -- become too generic for what is just popular right now yes that's going to generic and then the 
 teenagers already have those items in their closet they have exact same genes. Hasn't been any new compelling fashions at -- American Eagle or. The three gays to have exact same pair of jeans what's the teenagers already happened her closet you go to eat them for everything in line. They are very famous to replicate what's on the -- so you can get a little bit those genes that way I kicked it a little piece of lay's son and our. A different spot on and -- spot so and imports cheaper price than -- -- -- -- 
 and that's what the teenagers. But can it get cancer specialist. I guess I. I actually I did find a very similar pet at each and yes they look at the same but very some interesting I -- after -- after -- and their right across the street. Okay I wanna move on to the affluent shopper at the luxury group. Coach is one brand that stands out as really -- right according to your music and leading into the holiday season. What's going wrong manner and what's in store for how they might try to turn this ship 
 around. They chose a very interesting time adhered to go from major facelift. They are revamping their stores giving and you look and feel they're teaching their logos introducing new merchandise. All in the middle of the holiday season. So they're -- starred in case entails is here. Moved all inventory by offering steep promotions so that's gonna hurt the bottom line. But by doing so they're hoping to bring in the consumer I want the consumer is buying the promotional. Purses. Well I the full price 
 merchandise and hopefully by them. That may be also perhaps a little less flash means so much attention. I'm Michael course is just really been crushing it you know quarter after quarter after quarter. And just looking -- little bit more desirable program like coach which has been around for a long time. Ask Michael courses definitely taking the lead when it comes to the luxury goods not only United States but globally they're expanding to Europe and Japan. And they're on the revenue was going -- earnings 
 they're expected to see double digit growth on revenue and earnings for the holiday season. And analysts are very optimistic about the company. Michael course has a very loyal customer base as well which are. Willing to pay full price for the latest merchant -- in their inventory and most fast anything new that comes -- as being sold amazing. Okay let's talk about one of my favorite topics. Food I. Hello we are we staying home or eating out for the holiday season -- -- -- carrying out where we got. Well 
 we're keeping you might be expecting help okay yet loving every second -- I'm pretty okay. Consumers are staying at home there house houses and got up and value and that created at home activists -- And they're buying groceries and they're definitely looking but Wendy do you go eat out. Is in the middle of all that shopping and go to the fast which Sunnis and they're looking for the healthy option which is to public. The public has the strongest team starts ask them this holiday season. Also in this 
 football season. And what doesn't football -- error I actually to sell buffalo ain't is also is not expected about this holiday season. And that's left healthy for. Baghdad but it -- that the -- yes the very entertaining. Analysts say no not at buffalo -- I don't know it is consuming and or may well I pretend I didn't get -- into the but consumers while they're going out chopping it will not. Forego the -- the four dollar. Starbucks and Krispy Kreme also expect well that doesn't surprise me very very 
 reassuring. Okay probably go I want to also ask you about the housing market because there's obviously been a lot of talk a lot of evidence. A rebounded in the housing market as you mentioned were making house. And nice place to be but how much has that affected retail whereas it affected retail it's baffling to change the way consumers are spending money. Because they are being very frugal right now very cautious because of the economic uncertainty in the government leadership. But when they do open up 
 their wallets they're going to the home improvement stores and the home -- And we see companies like -- Sonoma today that the -- expectations are expected to continue to do well. And even the department stores that they do that well. Shoppers are going to be going to the -- source for apparel. But a company like JC Penney is already being merchandise in their home and ordered to either. That's shopper and because now shoppers right now are creating and at home experience for the season. So have done well. 
 Those retailers -- succeed this season changer on marches she knows retell. Thomson Reuters start mind thank you so much thank you Lisa. And it's very hard and this. Is writers