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Five days after my original post (below), the Commerce Department released its estimate of December retail and the report was much less rosy (down .3% or basically flat).  This data counted ALL RETAIL, as opposed to the earlier report which was based on reports from larger mall stores and retail chains (i.e. well-known consumer brands).   Both sets of data are probably correct, but it’s yet another mixed signal about the economy.  Some sectors are slowly improving and others obviously not. If these conflicting reports say anything to us as marketers, it’s that well-known brands benefit first when consumers start spending again…

Original Post:

Data released today indicates that holiday retail sales grew a surprising 3% compared to last year.  After the sting of unsold 2008 inventory and the massive discounting early in the year, retailers approached 2009 with conservative inventory levels and relatively low pre-holiday discounts.  With retailers holding their price, the season started with what appeared to be a standoff.  Neither side capitulated throughout November and early December.  But, as one analyst noted, in late December ‘the consumer blinked.’  In a strong pre-Christmas week, retailers of all types received a surge of high-margin business from consumers who had avoided significant spending for over a year.

While our economy is still a long way from recovery, this data point is another signal that we might have turned the corner.  Whether or not it means that a turnaround is certain, it is sure to get businesses thinking about their investment in growth again.  No one will want to be the “last in” when it comes to competing again for lost revenue.  If you’re in a category that is driven by replacement spending, you should be thinking particularly hard about this timing:  the consumers who’ve delayed spending on maintenance, worn equipment, even things like dental visits, typically re-enter the market in a wave as consumer psychology improves.  It typically takes several months of marketing, after a prolonged absence, to be considered for these purchases.  Don’t be the last one in your competitive set to make this important decision…