ND1101116

Title: Retailers Unveil Incentives to Lure Prudent Shoppers

Description: Walmart, Amazon.com and Best Buy are just a few of the major retailers looking to attract a pool of shoppers impacted by the economic downturn this holiday season.

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NEW YORK ? Retailers are scrambling to grab a share of what is expected to be reduced consumer spending on holiday gifts by introducing cash-friendly product and payment plans, the Financial Times reports.

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Walmart, Amazon.com and Best Buy are just a few of the major retailers looking to attract a pool of shoppers impacted by the downturn, with falling house prices and high unemployment eroding consumer confidence.

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Walmart announced recently a price match policy that reassures shoppers of receiving the lowest product price. The promise: If shoppers buy a product at its store but later find it cheaper elsewhere, Walmart will give them a gift card for the price difference.

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?There is a real depression among the lowest income 20 percent in the U.S.,? said Michael Silverstein, a senior partner at the Boston Consulting Group. ?These consumers are living pay check to pay check or government payment to government payment. They have cut all the corners that can be cut. There?s a great desperation among retailers to find ways to reach them.?

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A recent Deloitte survey revealed households earning less than $100,000 a year expected to reduce their holiday gift spending by 27 percent this year, while those earning in excess of $100,000 would cut spending by less than two percent.

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And a study by Accenture noted nearly one-third of U.S. shoppers said they would only purchase gifts whose prices are reduced at least 50 percent.

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Accordingly, Best Buy introduced a wide range of gifts priced under $100 and is giving customers a longer return window ? until the end of January.

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?All these things are really important because we?ve got to help the people in the middle who are really feeling this [weak economy],? said Best Buy CEO Brian Dunn. ?We?ve got to give them confidence and security in what they?re buying.?

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Walmart recently joined Sears in relaunching a layaway plan that allows shoppers to pay for their purchases in installments.

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?It?s definitely more appealing to customers who are on a tight budget, who have very limited cash or cash-flow issues,? said Salima Yala, head of Sears? layaway program.?

Content Subject: Operations

Formatted Article Date: November 1, 2011

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