It's an increasingly familiar scene: Teenagers armed with gift cards zip into their favorite retailer, determined to get exactly what they want. After the holidays.
The post-holiday shopping surge is no surprise to most retail professionals, including Mike Wirkkala, vice president of operations for Omaha-based Gordmans, who said he's seeing more adults abandoning efforts to pick out gifts for their teens and instead opting for a gift card.
“What that does is make the post-Christmas business a little greater because now the teen has that in their wallet,” he said. “It's a shift of business, pre-Christmas versus post-Christmas.”
Slow-to-buy consumers are forcing designers, factories, shippers and retailers to change the way they approach the holiday season. It's also making the once-predictable peak season during October and November a moving target for all players in the supply chain.
Here's how the 2012 holiday season is shaping up through the eyes of people at different points along that chain.
At Omaha-based Wes & Willy, the high-end boys clothing line, the design work happens a year ahead of the season. Orders for holiday wear were taken in the spring, with shipments going out starting in July through mid-October.
That's consistent with past years because the company so far hasn't seen retailers changing shipping schedules to coincide with predictions of when consumers will do most of their holiday shopping, said shipping coordinator Josh Mullen.
“Whether they hold onto it for two months until they put it out, I really don't know,” he said, noting that holiday sales are about the same as this time last year.
But the company is getting stricter about the retailers it chooses to do business with. If a retailer receives merchandise it can't sell, Wes & Willy could be short of time to find other retailers and get stuck with it.
“We closely scrutinize the history and the credit of the stores that we sell to,” Mullen said.
Mark Carson, founder of Fat Brain Toys, agreed about being choosy with retail partners. With about 20 percent of the Omaha-based toy store's business coming from its wholesale division, he said, Fat Brain Toys has to be selective so that timing issues don't arise.
His company is seeing later orders from retailers because of their anticipation that shoppers will postpone gift buying. Fat Brain is about two weeks off its usual September and early October rush of holiday orders, he said. Sales lacked in September but picked up in October at a better pace than last year, signaling optimism among retailers.
While that's good news, it makes planning difficult, especially if a particular toy exceeds expectations and flies off the shelves.
“Sometimes, they'll make a decision midstream and that can be a challenge for us to make sure we have the inventory to match up with that,” he said. “It's challenging, but it's part of the game.”
The shift in timing of consumer buying is also being felt in the trucking and railroad industries.
Truck tonnage last month increased 3.4 percent over the same time last year, the smallest year-over-year increase since December 2009, according to the American Trucking Associations. Railroad intermodal — container — volume was up 1.9 percent in October, according to the Association of American Railroads.
“Retailers used to stock up stores and we would be hauling it now and even earlier,” said Bob Costello, the American Trucking Associations' chief economist and vice president. “I don't think that's the way they play the game now.”
Instead, he said, “they'll ramp up and put in a last-minute push — pushes that can throw the supply chain in for some havoc.”
Retail hauling jobs account for more than 50 percent of business for Sarpy County-based Werner Enterprises, and the transportation and logistics company saw all-time-low inventories during the third quarter. Historically, that's a time of improved inventories, reflecting that shelves are being stocked, said President and Chief Operating Officer Derek Leathers.
“It would be a real anomaly for it to end up an empty-shelf season,” he said, “but what is unseen is the amount of work, effort and extra transportation to make sure it doesn't happen.”
A surge in business late in the game causes Werner to create a pop-up fleet, or 100 to 150 trucks that can hurriedly move thousands of tons of goods to store shelves in a tight window of time. Sometimes, the trucks have less than 10 days, but that happens only around the holidays or during natural disasters, Leathers said.
The temporary fleet costs the retailer a premium — a cost that could be passed on to consumers.
The trend also means shippers are less of an indicator about how the economy is doing.
Among railroads, Union Pacific's third-quarter international intermodal volume — container shipments of retail products such as electronics, toys, furniture, clothing and appliances — was up 1 percent. President and CEO Jack Koraleski said in a conference call with investors that the company is happy with those results but would have liked to see intermodal volume a little stronger.
The volumes through October and the beginning of November were flat in comparison with the same periods this year and last year, said U.P. spokesman Tom Lange.
“We expected a muted peak season and that's how it played out,” he said.
The National Retail Federation expects holiday sales this year to be up 4.1 percent to $586.1 billion.
When the bulk of the spending will happen is still a question. Starting before the recession, consumers' spending habits were evolving with the rise of gift cards, availability of online shopping and expectations that more sales will happen closer to the holidays.
Economic and political uncertainty are also playing a role in how retailers prepare for how consumers may spend, NRF President and CEO Matthew Shay said.
“There are around a quarter or a third of companies that are saying they're adding inventory this year and a quarter or a third saying they're diminishing inventory,” he said. “Everyone else is sort of in the middle.”
Companies based in the Midwest or doing business here say they're carrying inventory numbers comparable to last year and owe their business-as-usual situation to the Midwestern footprint, one that is often more isolated from larger trends (like gift-card buying) or problems (like the recession).
Wirkkala said Gordmans is keeping the timing of holiday inventory on track with past years and the company's October receipts were up over last year. “There really aren't that many retail growth stories out there today,” he said, noting the company started 2012 with 74 stores and now has 83.
Gordmans expects customers to continue to look for good deals, and those consumers are the retailer's target market, Wirkkala said.
“We aren't expecting this holiday to be particularly conservative — we're anticipating an increase,” he said.
Shipments are already rolling in at the Gap at Westroads Mall, said the stores' brand logistics expert Nathan Soto. Last week, they had five consecutive days of deliveries, each with 1,700 units, a number that's slightly lower compared with the booming early 2000s, he said.
Old Navy at Westroads is actually getting holiday inventory in early this year, said store manager Geena Mehl.
But since she hasn't heard many customers ask for gift receipts with their purchases or seen an increase in gift card purchases — typically signs the holiday rush has started — the inventory boost seems to be for consumers who are buying for themselves.
Mehl, who has been in the retail industry for 25 years, agreed that more customers are postponing gift buying, but it's too early to tell when spending will peak.
“This coming weekend and next week will be the indicator for us,” she said, noting that the two weeks before Black Friday are typically when she expects holiday shoppers to start trickling in.
Hayneedle, an Omaha-based online retailer of home goods, anticipates the holiday season — especially between Thanksgiving Day and Cyber Monday — to be stronger than last year, but hasn't seen strong gift-purchasing numbers the last week and a half, said Donna Faust, director of brand marketing. But she suspects that has less to do with holiday spending habits and more to do with the election and Hurricane Sandy.
“That has put people's minds in a different place,” Faust said.
Consumers are putting off spending for others because they have come to expect sales closer to the actual holiday, said Marshal Cohen, chief industry analyst at NPD Group. They're also getting better at recognizing items they saw last month or the month before.
In response, retailers are not laying out merchandise all at once, he said.
“Retailers are flowing merchandise in a much more sporadic, spaced out and scientific manner,” Cohen said, “which basically means what they want to do is be in a position where you're coming back for more new and exciting merchandise.”
And those gift cards are becoming a bigger factor all the time. A First Data survey late last year indicated that 18 percent of 2011 holiday gift purchases were gift cards, up more than 3 percentage points from 2010. The average consumer surveyed had bought five of them, and the average spent was $414, up from $375 the year before.
The good news for shoppers who find gift cards a fast and easy choice: First Data's survey found that recipients perceive gift cards to be more valuable than a traditional gift, with the vast majority of respondents saying they'd rather get a $25 gift card than a $45 gift.
Gift cards don't make up a big percentage of Fat Brain's retail operation, but Carson said they are popular late in the season when the company can't guarantee items will be shipped in time. He said the option suits last-minute customers and ensures the business momentum will continue through January.
“These days,” he said, “it really takes a little bit of everything to keep making progress as a company.”
Contact the writer: