FUZZY MATH or VOODOO RETAILING?


                         



                                             BLACK FRIDAY

The research group ShopperTrak identified in a report that sales rose 8.3% to
$10.3 billion nationally on Black Friday, the day following Thanksgiving, compared
to 2006.
 
ShopperTrak also identified that Black Friday typically sees up to 5% of all
holiday sales. But other research suggests that consumers were spending less
than in previous years.

For example, the National Retail Federation said the number of shoppers over the
Thanksgiving weekend rose 4.8% to 147 million customers from the previous year,
but customers spent less.  The Federation identifies that this year, they estimate
that shoppers are spending $347.44 per person, 3.5% less than from a year ago,
and they are hunting specifically for deep discounts offered by retailers.

In the eyes of the Federation, these factors made the weekend's total spending
results "extremely similar" to last year. Additionally, the National Retail
Federation didn't change its forecast for combined November and December holiday
sales after the Thanksgiving weekend's results. It predicts the sales will grow
by 4%, the slowest since 2001, when sales were up only 1.3 percent, year-over-year.

The cautious outlook has been caused by a falling US housing market, a credit crunch,
and rising food and fuel costs. Many experts and retailers have expressed caution
over the outlook for the whole festive shopping season.

According to study by BDO Seidman, LLP, a national accounting and consulting firm,
identified that the chief marketing officers of leading U.S. retailers estimate sales
on ‘Black Friday’ will account for 15.1 percent of their total holiday revenue in 2007. 
However as identified above, ShopperTrak claims it is only 5 percent.

BDO Seidman also identifies that the same marketing executives interviewed for their
study also anticipate that online sales for ‘Cyber Monday,’ will account for 12.3
percent of Internet sales this holiday season. They also project that more than
one-fifth (21.3%) of their holiday sales will take place in the final week before
Christmas.

   
                                   



                                                CYBER MONDAY

An Internet measurement firm, comScore reported that Cyber Monday sales totals hit
$733 million, a record spending amount for online retailers on what is one of the
busiest days of the year for online shopping.

The firm comScore also identified that the amount was a 21 percent increase in
spending over last year and brings the total spent online nationally to more than
$10.7 billion for the November - December 2007 holiday season, to date.

In addition, comScore reported that the number of online buyers was up by 38
percent compared to last year; however, average dollars per buyer was down by 12
percent. "Cyber Monday" is the first day back from the Thanksgiving, when traditionally
workers have use of high speed connections at their work to shop, and it was reported
that 60 percent of the dollars spent online on Cyber Monday indeed came from work
computers, with the balance from home and university computers.

From yet another perspective, Cambridge, Massachusetts based Akamai Technologies
released results on the Internet traffic

Akamai identified that as of 2 p.m. eastern time on Cyber Monday, North American
traffic had reached 2,950,806 visitors per minute, a 37 percent increase over 2006's
Cyber Monday peak for North America. At the same time, global traffic reached
4,608,640 visitors per minute, a 30 percent increase over the 2006 peak.

"Much of the growth in year-over-year retail traffic can be attributed to consumer
confidence in the Web, retail sites becoming more reliable and secure, and more
consumers doing targeted shopping," said Brad Rinklin, vice president of marketing,
Akamai. "As retailers continue to emulate the offline, physical world by adding
richer, dynamic environments to their online stores, site performance becomes
paramount. Many retailers start the process of preparing for Cyber Monday surges
months in advance, and Akamai is used to ensure that their sites perform flawlessly
during peak so that every visitor can complete a transaction as quickly, and as
reliably, as possible."

Akamai also announced that global retail site traffic on "Black Friday" (Nov. 23rd)
peaked at 4,044,800 visitors per minute compared to 3,080,349 a year earlier.

During the two days or retail shopping it appears that the following items were
nationally the most sought after in terms of cost and availability as identified
by Castle Rock, Colorado based Auction SHARK, Inc. for Black Friday and Cyber Monday.

                        The Top 15 Search Terms:

  1. Nintendo Wii                                  9. Garmin Nuvi 660
  2. iPod                                               10. Guitar Hero III Xbox 360
  3. Coach Handbags                       11. Nintendo DS
  4. Digital Picture Frames               12. Nike Shoes
  5. Chanel                                           13. Nokia Cell Phones
  6. Sony PSP                                      14. Vizio LCD TV
  7. Bose                                               15. Sony Playstation 3
  8. Lingerie

Auction SHARK also reported a 263% jump in visitor traffic year over year from
Black Friday through Cyber Monday, and a 553% jump in visitor page views.

Los Angeles-based PriceGrabber.com and El Segundo-based eCost.com are among
two of the state e-commerce retailers reporting strong results from Cyber Monday
sales. PriceGrabber said that it saw a 56 percent increase in traffic year over year, and
that the day was the biggest traffic day yet this holiday season. eCost.com, an
online discount retailer owned by PFSweb, also reported strong consumer demand.
Company officials from eCost identified that over the holiday weekend, it saw an
increase of 67% in booked revenue, compared to last year, and a 25% increase in
visitors compared to the prior year. Pricegrabber reported the top items being
sought by shoppers included the Nintendo Wii, the Microsoft Zune, TomTom's ONE
GPS, and Women's Ugg boots. Additionally eCost.com identified that they saw demand
for high definition LCD TVs, portable GPS systems, and HP brand notebook computers,
illustrating some similarities to those sought out nationally.

Reinforcing the issue associated with who is right or wrong related to the
predictions, Kathleen Pender of the San Francisco Chronicle wrote the following
article, (a very good article) that describes this conundrum thus putting this
issue into perspective.


                                        

Holiday weekend shopping - pick your pundit
Kathleen Pender, San Francisco Chronicle
Tuesday, November 27, 2007

Retail sales over the holiday weekend were either mediocre or robust, depending
on which survey you believe.

The National Retail Federation reported that 147 million shoppers visited stores
on Friday through Sunday, up 4.8 percent from 140 million last year. But they spent
only $347.44 on average, down 3.5 percent from $360.15 last year.
If you do the math that means spending overall was up an anemic 1.3 percent. The
trade group continues to predict that holiday sales will grow 4 percent this holiday
season versus last.

Meanwhile, ShopperTrak - which provides traffic data to retailers - estimates that
sales rose an "impressive" 8.3 percent the day after Thanksgiving - nicknamed Black
Friday - followed by 5.4 percent on Saturday, for a two-day gain of 7.2 percent.

Before you get too excited, Merrill Lynch economist David Rosenberg writes that in
2002, ShopperTrak showed a 12.3 percent year-over-year increase on Black Friday
"and yet retail sales ended up just 1.3 percent for the entire holiday season."

The International Council of Shopping Centers will weigh in with its take on
post-Thanksgiving sales today.

For all the publicity it gets, Black Friday is not a great harbinger for the entire
holiday season, much less the entire retail sector or the economy as a whole. It's
not even the biggest shopping day of the year. That distinction usually goes to the
Saturday before Christmas.

Although consumer spending accounts for about 70 percent of gross domestic product,
relatively little of that comes from chain-store sales.

About 60 percent of consumer spending comes from services, which include housing,
utilities, health care, transportation and recreation. "None of that is in retail
sales," says Dean Maki, chief U.S. economist with Barclays Capital.
About 22 percent of consumer spending comes from autos, food, gasoline and fuel oil.
Household furnishings (including consumer electronics), apparel, shoes, jewelry,
books and toys - the kinds of things you might buy for holiday gifts - together
account for less than 11 percent of consumer spending, according to figures from
the Bureau of Economic Analysis.

Nevertheless, many see the post-Thanksgiving weekend as a window on consumer
sentiment.

It's taken on added significance this year as analysts look to see how falling home
values, rising energy prices and the credit crunch are affecting consumers.

Going into the weekend, there was a lot of trepidation. The early results "seemed to
be a little better than expected," says Ian Morris, chief economist with HSBC Securities
USA. "Even though it was decent," he adds, "now we have a new worry: Did the good start
steal from future weeks or is this the beginning of something pleasant going forward?"

There is a lot of concern that promotional activity - such as steep discounts and
stores opening while some people were still doing their Thanksgiving-dinner dishes
- got shoppers into stores, but didn't generate a lot of additional revenue.
Morris sees consumption slowing, but not turning negative. "We got used to 3 to 4
percent growth," he says. Morris expects 1.5 percent in the fourth quarter and "2
percent or a touch under" next year.

Tim Rogers, chief economist with Briefing.com, says consumer spending fears are
overblown. "The death of the consumer has long been heard but hasn't been seen
for a quarter century," he says. As long as Americans are making money, they
will continue to spend, considering that "the ratio of (after-tax) income to
spending is pretty much 1-1." Given that income growth year-over-year is a
healthy 6.8 percent, "I'm not nearly as concerned as the public is about the
consumer," he says. "Every year around this time we say we're in trouble. Things
turn out OK."

Net Worth runs Tuesdays, Thursdays and Sundays. E-mail Kathleen Pender at
kpender@sfchronicle.com.

This article appeared on page C - 1 of the San Francisco Chronicle