Black Friday and Cyber Monday Sales Both Projected to Grow 1.8% This Year According to BDO Seidman, LLP Survey of CMOs

The majority (96%) of retailers say they will increase promotions and discounts this year. When asked which in-store tactic they will be focusing on most heavily for the season, most CMOs (43%) cite special events. More than half (55%) of retailers planning online campaigns will depend on email promotions to boost holiday sales. When it comes to which product category will see the most discounts this year, more than a third (37%) say consumer electronics.

“Flat sales predictions are a recurring theme this holiday season,” said Ted Vaughan, a Partner in the Retail and Consumer Product Practice. “Retailers plan to focus on promotions for the entire holiday season so there will less emphasis on Black Friday and Cyber Monday than in years past. Further, the heavy discounting necessary to get consumers out and shopping on Black Friday and Cyber Monday will preclude retailers from reaping major sales gains. However, the fact that most retailers do not expect to see a decrease in sales on these days is a sign that the economy is stabilizing.”

These findings are from the most recent edition of The BDO Seidman Retail Compass Survey which examined the opinions of 100 chief marketing officers at leading retailers located throughout the country regarding their expectations of the 2009 holiday shopping season. The retailers in the study were among the largest in the country, excluding automotive dealers and restaurants, with revenues of more than $100 million, including 20 percent of the top 100 based on annual sales revenue. The survey was conducted in October of 2009.

Some of the major findings of The BDO Seidman Retail Compass Survey of CMOs:

• Email Promotions King of Online Strategies. When it comes to online campaigns, 55 percent of the CMOs, and 69 percent of the top 100 retailers, plan to focus most heavily on email promotions. The remaining retailers will focus on free shipping (16%), search engine optimization (15%), social networking (10%) and special products available online only (4%). Interestingly, of the retailers who say that their comp store sales will increase this holiday season, 29 percent will focus on free shipping, which is up 13 percent from the average.
• Festive Retailers Plan Parties to Attract Customers. When it comes to brick and mortar promotions, almost half (43%) of retailers plan to focus most heavily on in-store events. Nearly one-third (32%) cite loyalty programs as their priority, while 11 percent will focus “buy 1, get 1 free” campaigns, 10 percent will extend store hours and 4 percent will ramp up pre-Thanksgiving discounting. Of the retailers who expect comparable store sales to increase, 20 percent will focus on extending hours, which is 10 percent higher than the average.
• Toys Projected as Strongest Category. When asked which product category will perform the strongest this holiday season, most (39%) of the CMOs cite toys. Only 24 percent say consumer electronics, which is down from 41 percent in 2008. Other categories include home goods (14%), lifestyle goods (12%), apparel (10%), and jewelry (0%).
• Consumer Electronics to See Most Discounts. A majority (37%) of retailers predict that consumer electronics will see the most discounts this holiday season. Retailers expect discounts across the board, including product categories such as: apparel (21%), home goods (14%), toys (13%), jewelry (9%) and lifestyle goods (6%).
• Black Friday to See Less Traction this Year. The majority (61%) of CMOs anticipate that Black Friday sales will be flat this year, while 33 percent predict an increase in sales and 6 percent predict a decrease. Of the retailers who predict that their comp store sales will increase this year, more than half (54%) expect their Black Friday sales to increase.
• Cyber Monday Remains Flat. More than half (65%) of CMOs expect flat Cyber Monday sales, while 32 percent predict an increase and only 3 percent anticipate a decrease. Forty-three percent of retailers who expect their overall sales to increase for the season also expect to see a lift in Cyber Monday sales.
• Gift Cards Sales Stagnant. Gift card sales are only expected to account for 5 percent of holiday sales, down from nearly 12 percent in 2008. More than half (57%) of retailers expect gift card sales to be flat this year, while only 32 percent expect gift card sales will increase and 12 percent project a decrease. Overall, retailers project a .76 percent drop in gift card sales this season.

The BDO Seidman Retail Compass Survey is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, whose executive interviewers spoke directly to chief marketing officers, using a telephone survey conducted within a scientifically-developed, pure random sample of the nation's largest retailers (with revenues ranging from over $100 million to billions of dollars).

BDO Seidman, LLP has been a valued business advisor to retail and consumer products companies for almost 100 years. The firm works with a wide variety of retail clients, ranging from multinational Fortune 500 corporations to more entrepreneurial businesses, on a myriad of accounting, tax and other financial issues.

About BDO Seidman, LLP

BDO Seidman, LLP is a national professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. Guided by core values including, competence, honesty and integrity, professionalism, dedication, responsibility and accountability for almost 100 years, BDO Seidman provides quality service and leadership through the active involvement of our most experienced and committed professionals.

BDO Seidman serves clients through 37 offices and more than 400 independent alliance firm locations nationwide. As a Member Firm of BDO International, BDO Seidman, LLP serves multi-national clients by leveraging a global network of 1,095 offices in 110 countries. BDO International is a worldwide network of public accounting firms, called BDO Member Firms. Each BDO Member Firm is an independent legal entity in its own country.

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