PAT BOLLAND: According to the American Retail Federation, Americans spent close to $28 billion this weekend in retail circles out there. At least one analyst has compared the thanksgiving holiday weekend to war. Today that battle spills into Cyberspace in what is now known as Cyber Monday. For more on this whole retail phenomenon of holiday shopping in the States, Rick Wolfe joins us, President of PostStone Consulting. Rick great to see you again.

RICK WOLFE: Good to be back, Pat.

PB: $28 billion. How does that compare to other Thanksgiving holidays?

RW: Not the best on percentage terms, they had a better year in 2003. It was the biggest shopping day of the year in 2003. It should probably be the second biggest day this year.

PB: If you had to look at these numbers overall, the federation that gave us the $28 billion says that sales are set to increase six per cent this holiday season. That’s an improvement from the previous forecast which was at five per cent. What do they see?

RW: Well that six per cent is good. It’s not the record. The record is about eight per cent. But in an economy that is running out of steam, with consumers having been the engine of the U.S. economy for so long, for the consumer to deliver another six per cent this year is their last act of charity before they withdraw to the sidelines, I’d think.

PB: Yeah, no kidding, with those high gasoline prices. But one of the big stories out there is Wal-Mart.

RW: Indeed, last year Wal-Mart had what could be described as a disaster on Black Friday. They made a decision to pull back on the promotions and they misjudged the day entirely. It was a brutal day for them. The big story is that two days later they had turned it around and proceeded to have a good season. What is the significance of that? The biggest company in the world did a two day turnaround.
Think of the cohesion of the management team. Think of the sweat that they poured into deciding what to do and getting the message out to all those stores. Think of the technology and the information systems they had in order to be able to analyze that behemoth business in order to know what to do. It's a huge accomplishment, in my view, one of the great accomplishments in business history, and it surprises me that nobody has written it down.

PB: How did they do it?

RW: Well, they did it by extraordinary coordination. Every week of the year they meet on Saturday to analyze what happened that week and to make immediate decisions on new products, new promotions. The data that they drive through these terabyte database systems in their headquarters, with data pouring in minute by minute from their stores, allowed them to re-think the business instantly.
Their cohesion as a business, the communication systems they have with the frontline, allowed them to get that message out to the frontline right away.

PB: What would they do? Discount less?

RW: Massive discounts, but with the right items. They would have instantly gotten the message out to the consumers that there were great discounts for them at Wal-Mart.
So, fantastic for consumers, great for Wal-Mart’s volume, but not a growth strategy. It is a beat-back-their-competitors strategy. I think the war analogy is very apt. It’s a strategy for holding your own, but a tough way to try to grow the business.

PB: Target’s been selling this whole sales experience thing, hasn’t it?

RW: Target has a terrific experience in the store. They have design. They have top designers designing products for them. They do great brand advertising. The combination of those three things is compelling. It is just more fun to shop at Target. Look what they did this year for Black Friday in sending out wake-up calls.

PB: From Kermit the Frog, was that them?

RW: And other celebrities besides Kermit the Frog. You could contact Target, presumably through the web site - I believe that was the main route. Let them know what time you wanted your wake-up call, probably let them know what celebrity you wanted your wake-up call from. And you had a message from Target about that.
The great thing is Target doesn’t discount the way others do on Black Friday. Of course they have discounts, but not the kind of massive discounts others do. They don’t open their store at 5 a.m. the way the others do. They open it early, but not 5 a.m. So, they are able to protect some margin through Black Friday.

PB: What about the rest of retailing aside from Wal-Mart? They manage their discounting on a regular basis as you say every Saturday. Does the rest of the retail industry do that kind of thing? Will we see heavy discounting that we saw on Friday continue, for instance?

RW: There are deals that are going to be available right through the season. Not the kind of extraordinary deals … personal computers or laptop computers … with a flat screen with them … for $400 US. Great cameras for $80. Mink coats at luxury stores discounted 30, 50 per cent. Those kind of deals won’t be there right through the rest of the season. Those were priming the pump deals. But you can’t go out like that without offering some pretty good value right through the season.

PB: Cyber Monday is the term that I’ve only just heard. Where does this come from?

RW: It’s a pretty new phenomenon. Last year was the first year it was really noticed. Think of the Thanksgiving rhythm. We start Thanksgiving with the holiday on Thursday, one of the great U.S. holidays of the year. It’s a bigger deal in the U.S. than it is in Canada. Followed by the shopping blowout on Friday. That has people really thinking about their Christmas shopping. People plan this. People have strategies. Not only do they go to the store with a list, but they have a plan of attack, where they know their route through the store and what items they’ll get in what order.
You don’t have half of America thinking those thoughts on Friday and have them turn off those thoughts on Monday. So think of this holiday weekend. A good chunk of the country is traveling back to the office on Monday. Nobody plans any big meetings on Monday. You arrive at the office on Monday, not too focused on work. You’ve got that fast internet connection at the office. And so Internet sales go boom. Productivity goes the other way but Internet sales go boom.