Posts filed under “Consumer Spending”
Retail theater: Beware of bad Shopmas data!
Washington Post November 29 2013
This weekend kicks off the official start of the seasonal gift-buying frenzy I call Shopmas!
When it comes to retail, ’tis the season of artifice and deception. The retailers offer fake discounts via phony markdowns — no one pays full price for that, honey — or ship made-for-outlet-center goods that are not actually sold in the name-brand retail stores. In “The Dirty Secret of Black Friday ‘Discounts’,” the Wall Street Journal called it “retail theater.” It noted that “in many cases, those bargains will be a carefully engineered illusion.”
The news media aren’t any better. They breathlessly cover shopping as if it were an Olympic event. The big-box retailers play right into the coverage. Each year, we are regaled with stock footage of the 6 a.m. crush, a near-riot battle for the heavily discounted electronics doodad of which only a few are for sale. It is ugly and crass. I see a scene from “The Hunger Games” rather than a modern industrialized nation gratefully celebrating the bounty provided us.
Footage of people camped out at Best Buy or elsewhere is not remotely a celebration. Rather, it’s a reminder of just how economically distressed a large percentage of our populace is. It’s a Barbie, for crying out loud — do you really need to LEAVE YOUR FAMILY FOR THREE DAYS TO camp out for that?
The media mindlessly follow a script written by retailers. The footage, the news reports, the surveys, the measures of foot traffic, all serve to create a false impression of a huge shopping orgy. You better join in, or you will get left behind!
There are several offenders, the most egregious of which is the Holiday Consumer Intentions and Actions Survey put out by the National Retail Federation. As we showed previously, these surveys do not measure retail sales — they measure “consumer intentions.” History teaches that you humans are terrible judges of your future behavior. You have no idea what you are going to do tomorrow, let alone next month.
But the NRF survey ignores that simple fact, asking consumers to recall what they spent last year and to anticipate what they will spend this year. The first question is a wild guess as to past behavior; the second question is unreliable speculation about future behavior. Take the net difference between these two wild guesses and — voila! — you get this year’s holiday sales numbers.
Only you don’t. As the numbers show unequivocally, the data have zero correlation with actual retail sales numbers. Some years, it is off by a lot; other years, it is off by even more. The 2009 survey projected an unprecedented collapse in spending by 43 percent; instead, holiday sales rose year over year by 3 percent.
My favorite piece of mathematical comedy is this line in the NRF methodology: “The consumer poll has a margin of error of plus or minus 1.0 percent.” That may be the funniest thing any statistician will read this holiday season.
The NRF report is just the frosting on the headless gingerbread man cookie when it comes to bad holiday shopping data. Runner-up is the ShopperTrak Retail Foot Traffic report. It is a squishy head count of shoppers at “retailers, mall developers and entertainment venues.” Its claims about foot traffic hardly correlate with actual sales. Yet it is reported as if it were important or accurate.
The retail kudzu arrives earlier each year. Shopmas now begins on Thanksgiving Day. Apparently, escaping the families you cannot stand to spend another minute with on Thanksgiving Day to go buy them gifts is how some Americans show their affection for one another. Weird.
For those who cannot wait for the official retail data to come out, look at data that actually measure retail sales. I have not found a perfect substitute, but MasterCard SpendingPulse looks pretty good. It is based on the credit card giant’s “near-real-time purchase data” and runs through sophisticated models.
Pardon me for being such a curmudgeon, but this is not what Thanksgiving is supposed to be about. Faux data, ginned-up excitement and consumerism have nothing to do with giving thanks for whatever bounty may have come your way this year.
Instead of getting sucked into the nonsense, you could always wait a month for the December retail sales data. If you do that, however, you might actually have to spend time with your family, giving thanks.
I am working on my list of holiday shopping ideas for Traders, and came across this auction: Lot 379: Harrison Ford “Han Solo” DL-44 Blaster from Star Wars: The Empire Strikes Back & Return of the Jedi. Starting bid is $200,000, but there are no takers (yet) . . . I would that that was…Read More
One would hope that after a decade of people lamenting the poor reporting of Thanksgiving weekend retail data, the news media might learn to do better. Yet we see few if any signs that reporters understand the misleading press releases put out by the retail industry and its flacks. The innumeracy of the media has…Read More
I am writing up my BBRG coverage of the innumerate business reporting of Black Friday and the holiday shopping weekend. The press as per usual got it wrong again this year. Here is the press release from the NRF, pushing their usual survey silliness as if it were actual retail sales data: “More than 141…Read More
> My Sunday Washington Post Business Section column is out. This morning, we look at the retail theater that is Black Friday: Beware of bad Shopmas data! Here’s an excerpt from the column: “The news media aren’t any better. They breathlessly cover shopping as if it were an Olympic event. The big-box retailers play right…Read More
Thanksgiving is but a few days away. We celebrate by the giving of thanks for whatever bounty has come your way. It is a warm and wonderful holiday full of family and tryptophan and good cheer. Black Friday, the day after turkey day, is the official kick off of the season I like to call…Read More
Jay-Z faces pressure to end his partnership with Barneys over racial profiling, but Larry Wilmore sees selling out as a sign of progress. Shopping While Black The Daily Show Get More: Daily Show Full Episodes,The Daily Show on Facebook TDS, November 6, 2013 (06:45)