Three major things have happened this year that will require the vast majority of retailers (including online retailers) to discount this year: they are subprime concerns, credit crunch and higher energy prices (including but not limited to oil).
All of these have created an attitude in consumers that will make it difficult to compete this holiday season unless you discount in a meaningful way.
Even the third-quarter numbers for the retail luxury goods market have had pressure on them for the first time in a while, as companies reported slower earnings.
There's really not much more to say. If goods we sell will in any way come under pressure, we must discount or suffer a horrible holiday season. I don't think there's any way to get around it.
Obviously the real high end goods that middle class consumers won't buy in the first place may be exempt, but other than that, I don't see an exception to the rule.
The third-quarter numbers of Wal-Mart (WMT), which is a bellwhether, were better than expected, and confirm that people are looking primarily for deals this holiday shopping season. Although the company will have their highly-anticipated black Friday specials again, essentially they started the shopping season the week after Halloween because of consumer wariness and concerns over the economy.
This year consumers will have to be baited with discounts to get them to loose their wallets and purses. The whole success of the season will depend on it.
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