Well, that was certainly ... uh, interesting. Holiday shopping seasons come and go, but 2011 has to rank as one of the most unpredictable, if not downright entertaining, years in recent memory for consumers and retailers alike. From midnight Black Friday openings to website meltdowns, shoppers had plenty to be worked up about. As for retailers, sales growth will likely exceed 3.5 percent, no small feat since the economy seemed pretty bleak just a few months ago. So as we welcome 2012, here are the Star Tribune's top five surprises (in no particular order) from the recently concluded holiday shopping season. You may now exhale.
Crash of the titans
With just weeks before Christmas, consumer electronics giant Best Buy suffered from two embarrassing problems with its online operations.
Several days before Christmas, the Richfield-based retailer said it would not be able to process some of its online orders in time for the holiday, including some made the day after Thanksgiving. Suffice it to say, customers weren't too happy.
And just a few days before Black Friday, consumers trying to access Best Buy's Reward Zone early online sale faced long delays. In both cases, Best Buy issued a statement blaming "overwhelming" demand.
Entering the holiday season, Target seemed like the retailer most likely to fumble online. In September, its website crashed following the debut of its Missoni line. The following month, Target.com President Steve Eastman left the company after another website malfunction.
Best Buy's woes were particularly noteworthy. The company has labored to portray itself as a tech-savvy, multichannel retailer. Best Buy CEO Brian Dunn frequently touts the company's ability to drive "explosive growth" through its stores, website, mobile devices and Geek Squad.
Of course, retailers of all stripes absorbed heavy online traffic.
But Amazon and Wal-Mart managed to process Christmas orders on time.
Did you know?Target.com averaged 35.3 million unique visitors a month compared with Best Buy's 23.6 million monthly unique visits in 2010, according to Internet Retailer.
Cyberwarfare
Speaking of heavy online traffic, 2011 will arguably go down as the year when Internet shopping morphed from spunky sidekick to full-fledged superhero.
Though traditional physical stores continued to grab most consumer dollars, online sales showed explosive growth, surpassing the expectations of even the most ardent optimist. Online holiday sales totaled $35.3 billion, a 15 percent gain from 2010, according to ComScore.
This season saw 10 examples in which online sales surpassed $1 billion in one day alone, including Nov. 28 ($1.2 billion), Dec. 5 ($1.17 billion) and Dec. 12 ($1.13 billion).
Furthermore, consumers bought lots of stuff not just from their PCs and laptops but also mobile devices like smartphones and tablets.
Did you know?A recent ComScore study says 38 percent of all smartphone owners used their device to purchase something at least once.
Midnight (and earlier) madness
That retailers like Target and Macy's would open their doors at midnight the day after Thanksgiving should come as a surprise to no one. Just a few years ago, stores opening their doors at 6 a.m. were considered crazy. Then came 4 a.m. and the rest is history.
No, the real surprise was how fast retailers, despite some consumer backlash, rushed to match or even outdo one another. Wal-Mart opened some of its sections at 10 p.m. on Thanksgiving, Toys 'R' Us at 9 p.m. Gander Mountain just decided to rename the entire holiday "Camo Thursday," in which the retailer sold discounted camouflaged gear throughout Thanksgiving.
There was quite a bit of hand-wringing among retailers.
Pier One said it does not plan to open at midnight Black Friday in 2012. "We want our associates to have a nice a Thanksgiving at home with their family," CEO Alex Smith told analysts. "We have no intention of extending hours over that weekend. It just makes no economic sense."
CEO Brian Dunn of Best Buy said he felt bad about the midnight hours but did so anyway.
"We recently had to make a difficult decision," Dunn told a conference. "We were going to be open at a much more civilized hour. At Best Buy, we need to be where our customers are. The market has moved to a midnight hour."
Sears and J.C. Penney tried to take a stand and opened at the usual 4 a.m. But the market punished them, as both retailers reported lackluster Black Friday sales. Sears tried to make up for lost ground in December, extending its store hours to midnight. The retailer even cited a poll it commissioned that showed customers preferred to shop "off hours," either late-night or early-morning.
But it was too little, too late. Sears recently said it would close 100 to 120 stores, partly because of poor holiday sales.
Did you know?Almost 25 percent of shoppers say they visited a store midnight Black Friday or earlier, a National Retail Federation survey says.
Not quite dead yet
It wasn't so long ago that the department store format looked as if it was going the way of the dodo bird.
Discounters and dollar stores were stealing customers on the low and middle end while luxury shops grabbed dollars on the higher end.
But 2011 proved that department stores, especially among higher-income shoppers, still have plenty of life. Macy's Inc. said sales at stores open for at least a year rose a healthy 4.8 percent in November, beating Wall Street's estimate of 4.1 percent and continuing a string of strong monthly performances throughout the year for the famed retailer.
Saks said November same-store sales jumped 9.3 percent, while Nordstrom rose 5.6 percent. Mid-tier department stores such as Bon-Ton Stores and J.C. Penney continued to struggle. But even Dillard's posted a respectable 3 percent same-store-sales gain.
DID YOU KNOW?
In November, high-end department store sales rose 6.5 percent over the same period in 2010, compared to a 0.3 percent loss for mid-tier department stores, according to Bloomberg data.
Still spending after all these years
Despite a weak economy, consumers, especially luxury shoppers, proved remarkably resilient this year, proving that they will buy stuff if retailers offer a good enough reason.
The National Retail Federation expects holiday retail sales to rise 3.8 percent to $469.1 billion, a full percentage point higher than its previous estimate of 2.8 percent.
The International Council of Shopping Centers also upgraded its holiday forecast to 3.5 percent from its earlier estimate of 2.2 percent.
That holiday retail sales would break the 3 percent mark seemed laughable in August, when the stock market crashed in wake of the country's bruising political fight over raising the debt ceiling and Standard & Poor's downgrade of the United States' credit rating.
Experts even predicted that America was sliding into another recession.
But the holiday shopping season demonstrated that Americans can and will spend money.
God bless America.
Did you know?Shoppers made fewer trips to stores but bought more when they did. ShopperTrak, which monitors malls and shopping centers, estimates holiday sales will rise 3.7 percent, almost equal to the NRF estimate, but foot traffic will decline 2.2 percent.
