Holiday Hysteria: It's Coming

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Early Birds = Big Spenders

Why do retailers focus so much on getting people into their stores right at the holiday season kickoff? One key reason is that the shoppers who do shop early are also the ones who spend the most. A recent Maritz poll found that one in three shoppers, or 34%, plan to shop in stores on the day after Thanksgiving. Almost one-third of those planning to shop on Black Friday say they will spend more than $875 on gifts this holiday season, with 17% planning to spend more than $1,000. That compares to an average of $676, according to another survey by the International Council of Shopping Centers, a trade association.

"For those who wonder why retailers invest so much effort and creativity into one shopping day, these numbers speak volumes," said Mark Rein, director of strategic consulting for the Maritz Retail Research Group. "The poll also revealed strong demographic indicators, such as 44% of those with household incomes between $75,000 and $100,000 planning to shop on Black Friday."

Clearly, it's these big spenders who retailers want to reel in. And once the stores lure them in with the one big discount, they hope the shoppers will fill their bags with many more items from the store. "Every store has one loss leader—many years ago at a supermarket I worked at we found that for every 25-cent loss on Clorox bleach, people would buy $40 of other grocery items," says Pao. "It's the same thing—people who stand in line for three hours won't leave with just one item in the bag."

Searching for Deals

Target must surely be hoping that people who walk in to buy that low-priced digital camera or portable DVD player will also look around the rest of the store and stock up on apparel, DVDs, and items from its home area. Long Island (N.Y.) mother Tricia Ehrlich is also hoping that Nintendos are on sale. "And if I can save big on that one item, I might as well buy the other items on my list and get done with as much of my shopping in one store," she says. "It's not like I have a lot of time with three children to raise."

Ehrlich might be in luck. According to Bfads.net, Target will be selling a Nintendo DS Lite for $129.99. Currently, it is listed for $224.99. According to the flyer, Target also plans to sell a Casio 6.0-megapixel slim digital camera for $139.87, which originally retails for $229.99 and is currently available on its site for $199.99. It also lists the Audiovox 9-inch Portable DVD Player for $89. Currently, Target.com has a 10.2-inch Audiovox portable DVD player listed for $349.99.

The site also displays Wal-Mart's flyer, which lists the 42-inch plasma HDTV for $998 and a Kodak EasyShare C633 digital camera and printer dock bundle for $189.74. Currently, there are no 42-inch plasmas for under $1,000 at any store. Of course, electronics stores will lure in folks with incredible deals, too. Best Buy lists a Kodak EasyShare 5.0-megapixel digital camera for $79.99 only for early birds, and Circuit City has a Compaq Presario Notebook with an Intel Celeron M 420, 512MB of memory, a 60GB hard drive, and 15.4-inch LCD screen for $299.

As for iPods, Brady in California might have to wait a while longer. None of the flyers has yet posted any substantial discounts on those popular music players. However, Best Buy does offer a $25 gift card with a 4GB iPod Nano that goes for $199.

Gogoi is a reporter for BusinessWeek Online in New York.