Staples has concocted a remedy for customers unable to say “that was easy” about their Christmas shopping. And the office products retailer has enlisted crooner Engelbert Humperdinck to help.

In order to prevent  what it deems “mediocre gift-giving”, Staples formed the “Department of Unexpected Gifts,” which will be featured in an advertising campaign starring Humperdinck, in what will be his debut commercials on U.S. television.

The Department of Unexpected Gifts is a team of gift “experts” and includes characters such as the “Sweater Lady,” the “Holiday Dancer,” the “Arctic Nomad,” the “Taste Maker,” and a reindeer named Mr. Nibbles.

Here are the top 5 gifts recommended by the department:

1. The iSpot chair, which has in-arm speakers and an arm pad earphone dock that is compatible with iPods, MP3 players, or any gaming system. ($199.99)

2. The Canon PowerShot A540 Digital camera. This is for the wife who says “she doesn’t need a thing,” the department said. ($199.98)

3. The Staples MAILMATE Shredder, which it says is powerful enough to shred 10 folded sheets of paper, CDs, DVDs and credit cards — for people who hate junk mail. ($69.99)

4. The Lenovo 3000 C200 laptop computer. ($699)

5. The Mio DigiWalker C310 portable GPS navigation system. It’s great for those who hate asking for directions, the department said. ($399)

Reuters reports that Wal-Mart Stores Inc.’s (WMT) annual holiday price-cutting may pressure rivals more than usual this year. Undoubtedly, this will be good news for shoppers and will make great theater for observers of the retail scene.

It’s likely just a sideshow for equity investors.

There are two broad strategies retailers use to bring in the money. One approach involves low-margins and, presumably, high turnover; in other words, sell cheaply but make up for it by moving stock quickly. The opposing strategy involves living with slower turnover in an effort to make more on each sale.

Financial theory is neutral on which strategy is better. Return on capital is what matters and one way or another that’s calculated with reference to margin and turnover. Companies can excel through either strategy. The weight of anecdotal experience seems neutral too. A stock can just as easily get hammered by news of excessive markdowns as it can by news of overstocked shelves.

Interestingly, a preliminary glance at data covering the past 12 months suggests neutrality may, indeed, be the right answer.

We looked at share price performance for 164 retailers in our database over the past year and did a quick fundamental comparison of companies whose shares outperformed the S&P 500 (the “better” group) versus those that underperformed (the “worse” group). This is not a back-test; in other words, we are not saying that shares of companies with such-and-such characteristics as of November 2005 were more/less likely to outperform in 2006. It’s a contemporaneous test: we compare 52-week share price performance since November 2005 with financial data that gradually came out over the same time span, thus measuring the extent to which share prices tracked fundamental trends as they unfolded.

The results are in Table A show average results for each group. (The conclusions would not change if we were to switch to median results instead.)

Table A

Data is for the trailing 12 month period.

It appears that the higher operating margins achieved by the better group mitigate against the low-price-high-volume strategy. But in truth, it’s not so clear. Price cutting would more likely be apparent in gross margins, where differences between the better and worse groups seem much less significant.

There isn’t much indication that investors care about how quickly goods fly off the shelves, either.We do see that the better group achieved stronger returns on investment, again supporting the view that investors will accept either strategy, as long as the company succeeds in its chosen course.

We do see that the better group achieved stronger returns on investment, again supporting the view that investors will accept either strategy, as long as the company succeeds in its chosen course.But before we go all out tipping our hats to the ivory-tower crowd, let’s check Table B.

Table B

Data is for the trailing 12 month period.

That’s a huge edge for the better group, so much so as to induce us to check median data, to guard against a small number of exceptionally large numbers. These results are in Table C.

Table C

Data is for the trailing 12 month period.

The sales impact is not replicated in reported earnings-per-share figures, but it’s possible that non-recurring items may be causing distortions. Meanwhile, the significance of sales growth is consistent with casual observation of the growth-momentum quality of recent market rallies.

Referring back to the last row of Table A, we’d like to believe capital efficiency counts. But Tables B and C raise questions.

In any case, Wal-Mart’s annual round of price wars are just as risky for the Bentonville giant as for rivals: If the next 12 months look anything like that past period, Wall Street will be looking at dollars, not necessarily foot traffic. Rivals should note that Wall Street will probably be looking at more closely at dollars than margins.

Bottom line for retailers: whatever the strategy, at the end of the day, just show the money.

    Anyone over 30 listening in on the Abercrombie & Fitch third quarter earnings call on Tuesday may have felt a little, well, old.
    “I don’t think it’s in our DNA to really do business with mature people,” Chief Executive Mike Jeffries told analysts.
    The retailer, which sells trendy casual apparel at its main chain of stores to a target 20-year-old shopper, posted a 43 percent rise in quarterly net income, helped by a 22 percent rise in sales.
    A focus on youth — and billboard advertising featuring very well-toned, very young and very unclothed bodies — has helped the retailer stay one of the hottest apparel brands in the mall.
    Besides its Abercrombie & Fitch stores, the company also operates the abercrombie chain of stores, with a target shopper age of 12, and the surf-inspired Hollister chain, geared to 16-year-olds.
    The oldest folk Abercrombie has to deal with are its Ruehl customers at 30.
    Jeffries — who noted during the call that his customers view sweaters as “an old man business” but added that he himself was wearing one — graciously noted that “a 30-year-old is not very old in America today.” 
    Gee….thanks Mike. 

    Fueling the perception that shopping for men is harder than pushing boulders uphill, an online survey finds that women are more likely than men to buy their spouse or partner a gift card for the holidays.
    But if female readers have exhausted their holiday gift ideas for ties/golf balls/soap-on-a-rope/insert-male-gift-he re, they may want to think twice before making the effortless choice of a gift card. 
    That’s because, according to the Biz Rate Research survey for Shopzilla.com to be released this week, men are twice as likely than women to consider gift cards an impersonal substitute for a real, tangible gift.
    Confusing the issue even further, the survey — which polled more than 1,000 online buyers — found that 40 percent of Web shoppers said they prefer to receive gift cards over actual gifts.
    Overwhelmed? The Mayo Clinic has compiled a list of 12 tips to cope with the holidays — including one that will strike fear into the hearts of retailers: “Don’t try to buy happiness with an avalanche of gifts.” 
    

Well, the weather outside may not yet have turned frightful, but the search certainly has.

With the launch of Nintendo’s Wii and Sony’s PlayStation 3 in the United States less than a week away, consumers have gone online, scouring for ways to secure one of the guaranteed-to-be-scarce new video game consoles.

Nintendo has said it expects to supply 4 million Wii units worldwide by year end, and Sony expects to ship 2 million PS3’s in the same time period. But judging from early response to the consoles and recalling the hard-to-find XBox 360 that Microsoft launched last year, demand is expected to outstrip supply.

Toys “R” Us and GameStop, which let shoppers reserve a Wii console in advance of the official launches later this month, said they quickly ran out of the supply they had set aside for these early “preorders.”

So, the hunt is on. On Yahoo Shopping, searches for Nintendo’s Wii jumped 506 percent and PlayStation 3 searches jumped 463 percent during the week of Oct. 29-Nov 4, compared with a year earlier.
   

The PS3 will go on sale in the U.S. Nov 17, while the Wii will hit stores Nov 19.

For those ready to trade Halloween’s black and orange for Christmas’ red and green, searches are increasing for holiday decorations. During the first week in November, searches on Yahoo Shopping for Christmas trees, ornaments and cards jumped between 143 and 271 percent. Searches for Ugg boots rose 319 percent, electric blanket searches jumped 206 percent and coat searches rose 165 percent.

Here are the top 25 searches on Yahoo Shoping for the week of Oct 29 Nov 4:
1. iPod
2. shoes
3. playstation 3
4. ps3
5. books
6. tmx elmo
7. psp
8. wii
9. gps
10. iPod nano
11. nintendo wii
12. xbox 360
13. eBay
14. cars
15. cell phones
16. tires
17. furniture
18. nintendo ds
19. digital camera
20. pets
21. elmo tmx
22. nikon d80
23. coach
24. mp3
25. toys

The blogosphere is abuzz with the latest news on Wal-Mart. No, it isn’t about $4 generic drugs, labor practices or politics. The world’s biggest retailer has decided to wish you a Merry Christmas.

Wal-Mart and other retailers took some heat in recent years for switching to the generic “Happy Holidays”, fueling boycotts and talk of a War on Christmas. Wal-Mart said on Thursday that Christmas will feature prominently in its advertising and in-store signs this year. The “Holiday Shop” will now be the “Christmas Shop”. Christmas carols will be played in stores. And greeters are free to greet as they see fit.

“We encourage our associates at Wal-Mart and Sam’s Club to greet customers utilizing various glad tidings inclusive of, but not limited to, Merry Christmas, Happy Holidays, Happy Kwanzaa, Happy Hanukkah and Feliz Navidad, to name a few,” Wal-Mart said in a statement released on Thursday.

Rob Frankel, who writes about marketing on his blog, calls it a “Hail Mary shot across the bough of retail America”.

Alex Rosenleaf, aka The Fighting Liberal, takes a more cynical view.

So what do you think? Do holiday greetings matter?

And what about “The Feats of Strength”?

Are visions of gingerbread lattes dancing in your head? The Starbucks holiday drinks are back. You may see some new food at your local shop this holiday season, but the sweet drinks are the same.
 
“Rather than take away something that’s very popular with the customers, we’ve decided to continue to offer what they’ve been asking for,” said Starbucks Coffee’s U.S. president, Jim Alling. “That’s not to say we don’t look at new things during the holidays.”

Gingerbread lattes, eggnog lattes and Christmas Blend coffee will only be around till the end of the year. But did you know you can order peppermint mocha all year long? Alling says you can. One caveat: except during the holidays it won’t have those tasty red sprinkles.

The holiday drinks arrived one month after Starbucks raised prices on most of its drinks by 5 cents, but consumers do not seem swayed by the increase, the chain’s first in two years.

“At this time, there’s nothing that we’ve seen that is at all surprising to us or concerning,” Alling said. “Things have gone as anticipated.”

Okay, I’m the first to admit I don’t understand how this is supposed to work. This lingerie maker has unveiled a bra that somehow turns into a shopping bag. There’s even a picture of a model carrying a loaf of bread in one, so it must be true.

So… How does this happen in real life, then? Ms. Johnson pays the Kroger cashier for her lima beans and turkey burgers and stuff, and then she disappears into a convenient dressing room, emerging with a big red bag? Or does she just disrobe right there, making the check-out process a lot more interesting than it used to be?

Meanwhile, does this mean we’ll now see Express Lanes for scantily clad shoppers who can get to their bags quickly? Please, send your explanations via Post a Comment.  And see our Video Report here:

Lingerie maker Triumph International Japan’s “No More Plastics Bags Bra”, a bra which converts into a shopping bag, is shown at the company’s showroom in Tokyo November 8, 2006. REUTERS/Yuriko Nakao

Making shoppers happy as they hand over the credit card is the name of the game in retail. But while some retailers have mastered the art, others have much further to go.
    Web retailer Amazon.com was bestowed a “Customer’s Choice” award on Thursday by the National Retail Federation, which asked in a survey with American Express which U.S. retailer delivered the best customer service. Nordstrom and L.L Bean rounded out the top three in the survey.
    But some disgruntled shoppers are ready to cut out purchases altogether when customer service goes awry. A Forrester Research study published earlier this week found that 27 percent of shoppers were prepared to cut out holiday gift buying on the Web altogether because of the hassle of returns.
    With about half of surveyed shoppers saying that Web returns were a hassle, Forrester analyst Sucharita Mulpuru warned that, in the age of comparison shopping sites and intensely competitive promotions, it’s not enough anymore to just offer the best price online.
    Nonetheless, online retail sales are expected to rise 23 percent this holiday season — the same increase as from 2004 to 2005– to $27 billion, according to Forrester. 
    One-fifth of consumers say they’ll do the bulk of their shopping on the Web this year, the survey found.
    But returning gifts may not be the only sticking point for Web skeptics. Some fifteen percent of surveyed shoppers said their holiday gifts came late in the mail last year, according to the study.

    October wasn’t the month retail analysts were hoping for, as U.S. stores from Target to Abercrombie & Fitch posted lackluster sales results that spurred some fears of weak holiday trends.
    Overall, 61 percent of U.S. retailers reported sales at stores open at least a year — a key retail metric known as “same store sales” — that were below Wall Street estimates, according to Retail Metrics.
    But rosier results came from certain apparel sellers including teen retailer Aeropostale, department store operators Nordstrom and J.C. Penney and off-price retailer TJX Cos. 
    Analysts, who had thought that cooler October temperatures and lower gas prices would boost October sales, have been eyeing a disappointing 0.5 percent rise in same-store sales at Wal-Mart, a bellwether for the retail sector, to gauge whether it has broader implications of a spending slowdown.
    More bullish retail watchers say that October may have just been the month when consumers pulled back from shopping after a strong September month, and that a robust November and December are still on the horizon.
    Read about overall retail results in October here and see how specialty apparel retailers did here.

 
    ##For U.S. stores
    **Reported on Wednesday
 (Table compiled by Kuncheria Cholemkeril in Bangalore)