Wednesday, October 6, 2010

The Dollar Tree Christmas

Toys, toys, toys. Retail analysts are expecting toys to make a big comeback at retail this Christmas, after a year that saw a stable economy and relatively few major toy recalls. Toys “R” Us is so confident in the outlook for toys that it plans to open 600 extra stores for the Christmas shopping season. It can do that because there are so many vacant stores available for rent on short notice.

But if there is going to be a surge in spending, where will the money come from? Consumers’ financial pictures haven’t particularly improved since last year, and more layoffs are on the way this fall. I believe the answer will not be found at Toys “R” Us or other toy stores, but at dollar stores, especially Dollar Tree.

This is a trend that I imagine will cut across gift categories this Christmas. People who skipped gifts entirely last year will, in some cases, want to come back to that custom, but won’t want to put much time or money into it. In other words, instead of shopping for hours to find the ultimate gift, people will be looking to pick up something quick that looks like a gift.

This trend will drive traffic to online boutiques that can be easily found in search engines. There, shoppers can buy something distinctive in just a few minutes. For people who have to spend less, though, the dollar store is the quick answer.

I haven’t seen any sign that shoppers have more time on their hands than last year. The trend toward increasing time pressure will put more pressure on shopping malls, which are set up to keep people shopping for hours.