KRISTEN SKILLMAN/THE HOYA Despite aggressive marketing and price cuts by stores such as Urban Outfitters, a GICR survey revealed that the retailers are unlikely to attract new consumers.
KRISTEN SKILLMAN/THE HOYA
Despite aggressive marketing and price cuts by stores such as Urban Outfitters, a GICR survey revealed that the retailers are unlikely to attract new consumers.

As students prepare to leave for Thanksgiving, filled with thoughts of warm homes and good food, retail stores have something else on their mind: holiday sales.

Retailers cut prices exorbitantly to entice consumers and increase their profits around the holidays, especially for the post-Thanksgiving Black Friday sales.

However, a newly-released survey by the Georgetown Institute for Consumer Research reveals that stores are unlikely to attract new customers from Black Friday sales, and retailers might actually lose profits by selling discounted merchandise to consumers who would shop their respective stores anyway.

Kurt Carlson, director of GICR, an initiative of the McDonough School of Business sponsored by consulting firm KPMG, conducted the survey with research director Ishani Banerji and research associates Annie Wilson (COL ’13) and Iris Wang. The online survey reached 1,000 U.S. citizens, with a median age of 32 years old and an average income of approximately $42,000.

Carlson expressed surprise at the results, given the intention of retailers who advertise sales.

“When we consider that one of the biggest reasons to run a sale is to attract new customers who will hopefully spend at full price in the future, it does suggest that much of the energy and margin retails are giving up during these holiday sales is for naught,” he said.

Banerji speculated this sort of consumer behavior is a reflection of outside factors of the holiday season. She said the season could be stressful for shoppers, so consumers will rely on the stores where they feel most comfortable.

“You know how the clothes fit, where they keep the tools or whatever else it is that you’re buying. Because of this familiarity, you don’t want to go to other stores,” she said.

The survey also predicted that spending on electronics — which composed 95 percent of last year’s sales — will make up only 67 percent of shopping for the 2014 season, attributing these relatively low numbers to a lack of new and popular electronics debuting in the coming months.

Banerji said these results imply that much of the success of holiday sales rely on building hype for certain products, adding that retailers should carefully time the release of new products to take advantage of the increased consumer activity between Thanksgiving and Christmas.

“If you want consumers to be spending a lot of money on your category, at this time of the year, then there has to be something that they get really excited about that’s launching right around Thanksgiving,” she said.

Although the holiday shopping season is always busy, 65 percent of the survey’s respondents do not support stores opening Thanksgiving evening to begin Black Friday sales.

Georgetown students attributed the frenzy that surrounds Black Friday as one of the major reasons dissuading them from being eager participants in the sales.

“It’s ironic how people will claw each other over boots on sale barely 24 hours after the most thankful day of the year,” Elizabeth Borowiec (COL ’17) said.

Bianca DiSanto (MSB ’17) said shopping is not on her list of plans for the upcoming break.

“I don’t plan on participating in Black Friday shopping,” she said. “I’m too busy recovering from gorging myself on Thanksgiving.”

Despite their inability to attract a substantial amount of new customers, Banerji noted the popularity of Thanksgiving sales among retailers speaks to the broader consumer activity of the holiday shopping season. Consumers, she said, shop for gifts more than anything else.

“People do most of their shopping for other people,” she said. “This is really the time you’re starting your holiday gift-giving.”

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