Consumers aren’t likely to run into a shortage of products to buy this holiday shopping season, but they might face a shortage of deals—particularly on electronic devices.
Jordan Selburn, who is a principal analyst of consumer electronics with IHS iSuppli, says any electronic device that includes a hard drive (e.g. videogame consoles, personal computers, set-top boxes) likely won’t be subject to significant sales or price cuts because of the recent flooding in Thailand, where many hard drives are manufactured, and its negative impact on production. (Tablet computers are likely to be exempt from this pool, Selburn notes, because most tablets operate on flash drives.)
“I was talking to one [electronics company] this morning who said they were scrambling to find hard drives,” he says. “And even when they did find them, they’re now paying $80 or $90 for them where they once paid $50.”
National Retail Federation (NRF) reported that consumers spent an estimated $52 billion this past weekend, which is a 16 percent increase from the roughly $45 billion that consumers spent last year over the Thanksgiving weekend. Kathy Grannis, who is an NRF spokesperson, says electronics accounted for nearly 40 percent of the sales this year.
Although consumers are on the hunt for the best deals, many also have a pent-up demand to spend money, according to Marshal Cohen of The NPD Group. Cohen says the jump in spending doesn’t reflect a higher degree of consumer confidence inasmuch as a higher degree of “frugal fatigue.”
“A lot of the electronics purchased were self-purchased products,” he says. “They aren’t intended to be gifts, but just for the individuals themselves.”
Discounts are a traditional part of the Black Friday weekend, Grannis says, but retailers don’t turn a strong profit when everything is discounted. She says storewide sales likely will return at the end of the holiday season, and online discounts or sales on individual items will fill out the weeks in between.
Selburn says he wouldn’t be surprised if retailers take advantage of consumers’ “frugal fatigue” and steer clear of heavy discounts.
– P. Snyder