Black Friday Brightens Retail Outlook - Page 2

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"Even though many retailers saw strong sales this past weekend, companies will not be basking in their success. Stores are already warming up for the next four weeks because the holiday season is far from over."

In addition to increased traffic, consumer interest in computers, video game consoles and other personal electronics devices appears to be growing again in 2005.

Based on its research, the NRF said that the electronics category saw the most significant gains compared to Black Friday weekend 2004, with roughly 37 percent of all shoppers buying some sort of gadget, an increase from approximately 32 percent one year ago.

An estimated 47 percent of all weekend shoppers bought something from the books, CDs, DVDs, videos and video games category, while clothing and accessories led the way, luring almost 50 percent of the consumers tracked by the group.

/zimages/4/28571.gifClick here to read about the success of the new Apple iPods.

Nielsen/NetRatings also reported strong sales for technology-oriented items to consumers. The researcher firm highlighted the toys/video games segment as the fastest growing category in its surveys over the weekend, with a 152 percent week-over-week growth.

Consumer electronics followed close behind with 142 percent week-over-week growth, and computer hardware/software rounded out the top three categories with 102 percent growth, compared to the week before Black Friday.

Overall week-over-week growth for the Holiday eShopping Index was 39 percent, the company said.

Products that proved to be big winners with consumers included Microsoft Corp.s newly released xBox 360, which was sold out of most retailers, and Apple Inc.s iPod handheld digital music players.

Analysts with Nielsen/NetRatings said that an increasing number of shoppers said that they are using the Web to price check items before heading to stores, and that they look to be buying more items online in 2005.

"While many shoppers headed out to the stores over the weekend, the majority first turned to the Internet to check prices and product availability," said Heather Dougherty, senior retail analyst with Nielsen/NetRatings.

"(The) consumer electronics and computer hardware categories also attracted holiday shoppers to the Web to research and purchase this years hottest gift items, including flat-screen TVs, iPods and other MP3 players.

"Price slashing and heavy demand will drive significant sales in these categories this holiday season," she added.

Not surprisingly, Apples iPod was atop several lists of hot-selling items over the weekend, with the companys powerful iPod Nano, which retails for roughly $200, coming in second in Amazon.coms consumer electronics category. The $100 iPod Shuffle was third in overall sales since Friday.

The only item outpacing the Apple products on Amazon was a $40 DVD player from manufacturer CyberHome Entertainment Inc.

Retailer Best Buy Co.s Web site sold out of the high end $250 4GB iPod Nano over the weekend.

Industry watchers said that the reported gains in consumer spending for 2005 should be viewed with some caution, as retailers will need to sustain their early performance in order to record growth for the entire holiday season.

Greg Buzek, analyst with IHL Consulting Group, Franklin, Tenn., said that reports of a slowing economy have not held true thus far and he believes the 2005 season could be a record year, especially in the e-tail arena.

"We continue to see growth in online shopping, as people are getting less enthusiastic about going to the stores and fighting the crowds and getting more comfortable with retailers sites," Buzek said.

/zimages/4/28571.gifClick here to read about the popularity of Xbox 360.

"This year looks promising as the economy continues to drive consumer sales; there could be some pushback with Katrina and the others storms, and from major layoffs at U.S. airlines and automakers, but overall the market is booming."

While Buzek believes the best deals for consumer electronics wont actually come for several more weeks, he said that many shoppers are happy to order the goods online rather than save a few dollars on the high-ticket items by hitting in-store promotions and sales.

The analyst said that retailers themselves also invested heavily in new point-of-sales technologies this year, which usually equates to stronger returns for the companies.

"Retailers spending more money on technology is always a sign that theyre expecting a solid gain with holidays, as people who did poorly last year retooled and those that did well are looking for new ways to increase sales," he said.

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