NEW YORK (Reuters) – They left home without it.
Black Friday shoppers shunned credit cards at the start of the holiday season this past weekend, according to a survey released on Tuesday, adding a cautionary note to expectations for U.S. retail sales over the next few weeks.
And this year's Black Friday, the day after the Thanksgiving holiday when retailers offer deep discounts and early-bird specials, attracted the greatest percentage of households to date, showing that consumers were willing to shop before dawn for significant savings.
According to the survey by America's Research Group and UBS, 16.3 percent of consumers polled said they used credit cards, down from 30.9 percent last year, and the lowest percentage ever seen by the group's chairman, Britt Beemer, who has tracked holiday shopping for more than two decades.
This could have repercussions for credit card processing networks like Visa Inc, American Express Co and MasterCard Inc, which stand to benefit from a rebound in spending this holiday season.
America's Research Group said it expected total holiday sales to range from down 1 percent to up 1 percent, based on data showing that consumers spend $41 on average per transaction when using cash, check or debit cards, compared with $87 on average when using credit.
That is far weaker than the 2.3 percent holiday sales rise forecast by the National Retail Federation. Other industry predictions top 3 percent.
The holiday shopping season is the biggest retail event of the year, helping to shore up profits for store chains from Wal-Mart Stores Inc to Macy's Inc to Tiffany & Co.
Although higher-income consumers are starting to spend again, Beemer said they would not be able to counter the caution pervading the wider population because of unemployment and slow economic recovery.
"There's no doubt that luxury is going to do better this year than last year," Beemer said in an interview. "But ... if the number of consumers using credit cards is half of what it was a year ago, the luxury customer cannot make up for that 50 percent decline."
BLACK FRIDAY RECORDS
The Standard & Poor's Retail Index rose 0.4 percent on Tuesday, outpacing slight declines for the wider stock market. The index hit a 3 1/2 year high ahead of Black Friday, and some analysts have said that retail stocks have already factored in a small increase in holiday sales.
Between 46 and 47 percent of U.S. households shopped on Black Friday this year, the survey found, marking a new record for Beemer and rising from roughly 37 percent last year.
Of the people who shopped, nearly 62 percent made purchases only on Black Friday, topping a prior record of 56 percent.
More than 14 percent of shoppers said they finished 90 percent or more of their shopping during the weekend, compared with 10.5 percent last year.
Discount stores and electronics retailers were the day's winners, with the survey finding that those segments actually gained prominence.
About 46 percent of Friday shoppers said they spent the most money in discount stores, an 11-year high and up from last year. About 15 percent of Friday shoppers said they spent the most at electronics stores, such as Best Buy Co Inc, a five-year high and up from only 10 percent last year.
The survey polled 1,000 consumers from Friday through Sunday and has an error factor of plus or minus 3.8 percent.
Its findings differ from those of the NRF, which showed that discounters lost ground this year to clothing and department stores as consumers were a little more relaxed about spending.
It seems that if a new product or technology platform doesn't generate huge sales right away, you can count on it to be written off as a bust faster than you can say "LaserDisc." Google TV is the latest victim of this mind-set, with skeptics sounding the funeral march for the Android-based home entertainment platform following less-than-enthusiastic reviews for some early Google TV products such as Logitech's (Nasdaq: LOGI - News) Revue set-top box, and Sony's (NYSE: SNE - News) decision to slash prices on a slew of Google TV-enabled television sets and Blu-ray players. But writing off the platform this early in the game means overlooking both Google's (Nasdaq: GOOG - News) history when it comes to software development, and the strategic motivations of the TV manufacturers lining up to support Google TV.
Google's software strategy
As some longtime Google followers will tell you, Big G's attitude toward releasing new platforms is very different from that of, say, Apple (Nasdaq: AAPL - News). Whereas Apple prefers to take a perfectionist approach to new products, Google has no qualms releasing something that's still rough around the edges for the sake of quickly building up a user base, getting partners on board, and generating user feedback. This was the case with Gmail, Google News, and most relevantly, Android.
If you were forced to predict Android's future success relative to the iPhone based on the reception for the first mass-market Android phone (HTC's G1, released in October 2008 by T-Mobile), chances are that you wouldn't be too optimistic. Its sales weren't terrible, but they couldn't hold a candle to the iPhone's, and any side-by-side comparison of the two products couldn't help mentioning how the G1 was missing some key features that iPhone users took for granted, and how its software was chock-full of bugs and quirks. But Google learned from its mistakes, lined up a slew of new hardware and carrier partners, and tweaked and retweaked Android to make it both more feature-rich and user-friendly.
Needless to say, Android's current standing in the smartphone universe is a lot different today than it was two years ago. And as my colleague Anders Bylund pointed out last week, Google appears set on putting Google TV on a similar development path, with upcoming Android updates clearly having large-screen devices in mind.
Why TV manufacturers are on board
But Google's engineering geeks and ad salesmen aren't the only people motivated to see Google TV succeed. Big-name TV manufacturers have a strong incentive to support Google TV for the sake of avoiding the dreaded c-word: commoditization. The success of low-cost manufacturers such as Vizio is already putting a squeeze on the margins of the TV industry's traditional big names, proving that consumers are willing to put brand loyalty aside if it means saving big money on their next set. And when it comes to using a living-room device for accessing the web and watching online video from the likes of YouTube and Netflix (Nasdaq: NFLX - News), consumers are turning far more to video game consoles from Microsoft (Nasdaq: MSFT - News), Sony, and Nintendo than to "web-enabled" TV sets.
That's why leading manufacturers have a big incentive to support Google TV. If they don't want their industry to slowly devolve into a commodity business, in which mainstream consumers base their buying decisions overwhelmingly on price, then they need to find ways to differentiate their pricier models through software and hardware alike.
Even with its early kinks and bugs, Google TV gives manufacturers their best shot at pulling this off.
Google and Microsoft are Motley Fool Inside Value recommendations. Google is a Motley Fool Rule Breakers selection. Apple and Netflix are Motley Fool Stock Advisor picks. Logitech International SA is a Motley Fool Hidden Gems choice. Motley Fool Options has recommended a write covered strangle position on Logitech International SA. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Apple, Google, Logitech International SA, and Microsoft. Try any of our Foolish newsletter services free for 30 days.
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DETROIT, Michigan (AFP) – General Motors Tuesday launched its battery-powered Chevrolet Volt and a major hiring program to ramp up production of green vehicles.
GM said it would add 1,000 engineers and researchers in Michigan over the next two years, beginning Tuesday, in a drive to develop next-generation electric vehicles beyond the Volt.
"GM is going to lead the industry in the adoption of various vehicle electrification technologies, whether its electric vehicles with extended-range capability, like the Chevrolet Volt, or the recently introduced eAssist technology that will debut on the 2012 Buick LaCrosse," GM chief executive Dan Akerson said.
"We want to give our customers energy choices other than petroleum and to make the automobile part of the solution when it comes to the environment," he added, speaking at an event at Detroit-Hamtramck Assembly, where the Volt is put together.
Akerson also said GM is studying whether to expand production beyond the 45,000 units the company plans to build in 2011.
"My sense is there is going to be a lot of demand for this vehicle," he said.
Announced in 2007, the Chevrolet Volt is an electric vehicle with an extended driving range of up to 375 miles (603 kilometers), based on US Environmental Protection Agency estimates.
For the first 35 miles (56 kilometers), the Volt can drive gasoline- and tailpipe-emissions-free using a full charge of electricity stored in its 16-kWh lithium-ion battery, the company says.
When the battery runs low, a gasoline-powered engine/generator kicks in to extend the driving range another 340 miles (547 kilometers) on a full tank.
The first Volt made in regular production will go to the company's museum, said Mark Reuss, president of GM North America.
The first Volt available for retail sale was put on the auction block at a starting bid of 50,000 dollars, including a charging station and a home installation.
Reuss said the proceeds would benefit math and sciences education in the hard-hit public schools of Detroit, struggling to recover from a recession that threatened to wipe out the US auto industry. The winner is to be announced December 16.
Reuss said the first Volts were ready for distribution to customers in Michigan, California, New York, New Jersey, Connecticut, Texas and the US capital of Washington.
GM, the largest US automaker, recently launched a massive share offering that highlights its new traction after a government-backed bankruptcy restructuring.
Akerson said the initial public offering (IPO) of GM stock was a great success as it raised more than 23.7 billion dollars for principal shareholders.
The principal shareholders will determine whether additional GM shares are put up for sale, he said.
GM's return to public trading on November 18 marked a dramatic turnaround for the embattled company.
Amid skyrocketing debt and plummeting sales, GM had been forced into bankruptcy protection in June 2009, as it got a 50-billion-dollar government bailout.
The IPO lowered the government stake in the company below 50 percent and recouped 11.7 billion dollars for US taxpayers.
Coinciding with the return to Wall Street, Green Car Journal on November 18 named the Chevrolet Volt the Green Car of the Year, the first electric vehicle to win the award.
The Volt also was named by AUTOMOBILE Magazine as the 2011 Automobile of the Year.