Let’s Get Ready To Retail

In just about a week, Americans – fortified by turkey and stuffing, maxxed out on football and ready to flee the visiting relatives, will participate in one of the most famous of all holiday rituals:  Black Friday shopping.

So, what can we call expect this year as we all get ready to retail?

In a word–more.

More retailers with more offers and even earlier than before.

Many, just can’t wait until Friday and are experimenting with lots of new ways to innovate the Black Friday experience. Target is starting Black Friday sales on Wednesday and well over a dozen merchants nationwide will be opening their doors on Thanksgiving.  Amazon, who ordinarily cleans up on Cyber-Monday,  is even getting into the Black Friday fray this year. DHL will deliver a package to your car. We’ve even figured out how to export Black Friday to China. Not a bad idea, since consumers who shop globally (as opposed to only domestically) tend to spend a lot more, according to PayPal’s latest research.

So the questions are numerous… Will consumers take the bait and show up? How much are they going to spend? Will they be use Apple Pay and other mobile wallets?

We don’t know the answers yet, but PYMNTS has a look at some of the early indicators of how things might play out.

Gift Cards:  The Gift That Keeps On Giving (To Everyone)

A recent survey found that 62 percent of American shoppers said they’d like to receive a gift card for Christmas this year, making this stored value product the most requested gift item eight years in a row.  Given America’s continuing love affair with buying their own gifts later, it comes as no surprise that

Holiday shoppers will spend a record-breaking $31 billion on gift cards this year…

According to a survey of more than 6,000 consumers by the National Retail Federation. The average person buying gift cards will spend $172.74, up from $163.16 last year.  Shoppers will spend an average of $47.87 per card (up from $45.16 in 2013), with cards from department stores (37 percent), restaurants (34 percent) and coffee shops (20.6 percent) among the most popular choices. The survey did not break out traditional plastic gift cards versus digital gift cards.

All in the poll found total spending is expected to reach $31.74 billion

PayPal is going after some of that $31.74 billion dollars market with a gift card play…

PayPal is teaming up with POS technology firm InComm to offer consumers easier and more ways to purchase and digital gift cards using their mobile phones. InComm’s digital platform InComm Digital Solutions (IDS) allows PayPal users to access gift cards from more brands and to seamlessly use those cards themselves – or gift them to others. The gift cards will be available through PayPal’s Digital Gifts store and on eBay.

“Consumers are increasingly adopting digital cards for gifts and self-use and looking to easily purchase and store these cards on their mobile devices,” IDS General Manager Mike Fletcher says. “Collaborating with PayPal is helping drive adoption of mobile payments by making it easier than ever for consumers to do this.”

Square also wants in, but is going after a different part of the gift card transaction

Square is getting back into the gift card business this holiday season — but this time, the cloud-based mobile payments service is channeling its inner plastic self and selling physical cards to its retailers.

Square announced on Tuesday (Nov. 18) that merchants using its Square Register will be able to buy customized gift cards for $1.50 each, with no additional charges when the cards are sold or redeemed. When a merchant’s customer purchases a gift card, funds are automatically deposited into the merchant’s account the next business day, so there’s no waiting for the card to be redeemed to collect the cash.

Square claims that other gift-card providers charge as much as $3.50 per card plus additional redemption and transaction fees, putting them out of reach for small retailers.

To process a gift card, the merchant swipes them like a credit or debit card. The merchant’s Square point-of-sale system automatically updates the value of the card, which can also be reloaded at any time. Customer analytics for card usage are all part of the system.

The Season Of Giving Is Upon Us

With peace on earth and goodwill towards (wo)men being the theme of the season, the normal competitive retail and payments landscape sees a special focus on giving, growth and inclusion. Given everyone’s inclination toward kindness…

PayPal And Square Want To Put Some Cash In Merchants’ Wallets

All merchants know the holiday shopping season is their bread and butter, but prepping for holidays brings high product investment costs. PayPal and Square want make the loan process easier for their customers.

Using PayPal and Square for loans is becoming a popular option around the holidays for small business when merchaniasing needs can spike and cash-on-hand can run low.  In addition to aiding merchants financially, PayPal and Square can provide data as to what their customers need most out of their companies. PayPal’s merchant-lending program began in September 2013; Square started in May of this year.

The companies have extended more than $275 million in financing to about 40,000 merchants over the past year, with demand for loans spiking when businesses need to build up inventory for the holidays.

Travellers Can Turn Points To Purchases In Airports

Who needs presents more than road warriors? Just in time to calm the agitation that business travelers experience around the holidays when face with the hordes of “rookie travelers” who clog the airports, United Airlines is letting frequent fliers use iPads to buy food and drinks using airline miles while waiting for their (inevitably delayed) flights.

This allows United’s nearly 95 million Mileage Plus members who hang out at United’s Newark, New Jersey hub a new way to use miles. The conversion rate, Bloomberg said, is about 143 miles per $1, but that’s not a fixed rate.

Around 6,000 iPads will be placed around the terminals to allow travelers to scan a boarding pass to keep updated on the flight at places they are dining at the airport, and when the check comes the customer can either pay with money or miles. Other payment options will be incorporated into duty-free shops in United terminals over the next 12-18 months as part of a $120 million renovation,

Members’ balances have ballooned with the popularity of mileage-linked credit cards and the proliferation of other schemes by which one can amass airline miles. Airlines would love for nothing more on earth this Christmas than for those frequent flyers to use their miles for something, anything else. Thus, the virtual currency of airline miles needs to migrate into the real world of food, drink, and duty-free shopping.

America’s New Export To China:  Black Friday

Big U.S. retailers are hoping affluent Chinese shoppers will join the Black Friday frenzy next week — with a lot of help from Alibaba.

Saks Fifth Avenue, Neiman Marcus, Bloomingdale’s, Macy’s, iHerb, Gilt, Ashford, Ann Taylor, American Apparel and Aeropostale are partnering with the Chinese ecommerce giant to promote Black Friday sales, accept payments in Chinese currency and deliver packages from the U.S. to the world’s most populous country.

The retailers admit that the Black Friday promotion is an experiment, and no one knows how Chinese shoppers will react to another big, Alibaba-promoted shopping holiday less than three weeks after Singles Day on Nov. 11, when Alibaba raked in $9.3 billion in sales.

U.S. Retailers Next Best Target On Black Friday:  China

The time might be right for retailers of all stripes to think globally and then act globally.

Cross-border transactions are on the rise and those who make more than 10 percent of their online purchases outside their home nation spend spend approximately twice as much as consumers who only shop domestically.

In many ways, the situation in China is a good microcosm of the complexity that cross-border buying and selling presents with its increasingly large market of international consumers with more access to capital and the World Wide Web. Singles Day demonstrates that Chinese consumer will shop on line (a lot) and  with partnerships, like the one that exist between PayPal and China Union Pay, it has become much easier to facilitate payments across national borders.

“It’s a lot easier than small business think to take advantage of this opportunity. I mean there’s no reason they couldn’t start even before this holiday season,” PayPal’s senior director of global initiatives Anuj Nayar told MPD CEO Karen Webster in a recent podcast interview.

And Yet The Spirit Of Competition Remains Alive And Well

There are only so many consumers, and as of next Friday retailers will race will be on to capture as many of them and their dollars as possible.  And a race it is, with retailers actually shoving at the starting line to get out first.  Amazon is getting out ahead of a Cybermonday – a shopping holiday it helped to invent – to beginning its sales on Black Friday.  Target, not to be outdone, is starting its Black Friday sales on Wednesday.  Walmart is one of 15 national chains that is opening stores on Thanksgiving this year, with the hopes that the bad publicity – like theBoycott Black Thursday Movement that has been picking up steam on Facebook all week –  doesn’t cut into its overall weekend take.

Also Bad Publicity Aside, It Might Not Even Make Business Sense To Open

In a podcast earlier this week with MPD CEO Karen Webster Head of Business Analytics for RetailNext Chitra Balasubramanian noted that opening on Thanksgiving had been a duel edged sword for their merchants last year

“A lot of our retailers are planning on opening up their doors on Thanksgiving Day or  increasing the number of openings that they had from the prior year,” Balasubramanian said

Balasubramanian went on to explain that the extra day or so does not necessarily enhance  weekend performance “From the prior year retailers have learned from our information that opening on Thanksgiving can cause people to shop less throughout the weekend.”

With that challenge, Balasubramanian notes, also comes an opportunity for retailers. Forewarned is forearmed and knowing the potential overall depressive effects of the early .opening lets merchants know that they need to put an additional emphasis on outreach throughout the shopping weekend.

Think Competition Is Tough Among Retailers? Try Being A Shipper

The numbers are in, and this year looks like it will be the biggest-ever for holiday shopping in the US. It’s great news for merchants, but the pressure is on for delivery services. In fact, delivering the 350M+ packages ordered by those who participated in China’s Singles’ Day is one of the things that keeps Alibaba’s Jack Ma up at night.

Leading shipping companies like UPS and FedEx are bracing themselves for massive volumes of deliveries this year as they adjust to the evolving habits of consumers aggressively seeking out online deals, even on the holidays.

Both companies are looking to avoid a repeat from last year. According to data from Shipmatrix, 2013 saw a 23 percent spike in shipments the week after Thanksgiving. Unfortunately, poor winter weather interfered with delivery which resulted in many Christmas Day disappointments. FedEx blamed it shipping shortcomings on the unrealistic sales forecasts of eCommerce companies.

Now, FedEx says it’s not going to make the same mistakes. FedEx Ground plans to be in operation seven days a week for the busiest time of the year and is hoping to expand its one-day delivery service to more than two-thirds of the nation. The company has also launched a new reporting system to facilitate delivery planning.

Meanwhile, UPS said it’s expecting the online holiday shopping avalanche to begin the week before Thanksgiving as consumers find pre-Black Friday sales on their computers and phones. The company announced that, for the first time ever, it will be up and running on Black Friday; it also plans to add 49 new package sorting shifts and has boosted its largest air hub with nearly 1,000 new trailer spots.

Meanwhile, DHL Is Going The Extra Mile To Stand Out

Delivery service DHL and carmaker Volvo are working on a service that would let DHL remotely open Volvo cars to make the deliveries. DHL would only get access after the owner accepts delivery via text message. The program may be announced within weeks, and discussions with other carmakers are ongoing, unnamed sources told Bloomberg.

Volvo ran a pilot program in late 2013 in Gothenburg, Sweden, using its GPS-linked On Call service to enter vehicles and drop off groceries in their car trunks. Swedish online retailer Linas Matkasse and Norwegian delivery service Bring were also part of the test. The deliver-to-car service is potentially available in any of the 20 countries where Volvo’s On Call smartphone application is offered,  the sources said.