Cautious optimism is opening the wallets of consumers again as we celebrate the slow rise out of a two year recession. November month end results were buoyed by Thanksgiving weekend sales, with surprise increases online both Black Friday and Cyber Monday, indications that early discounting and great offers by Amazon, Wal-Mart and Sears worked. Brick-and-mortar stores didn’t fare as well, with sharp declines for many teen and luxury retailers, while discounters like Costco, Wal-Mart and TJ Maxx had increases over last year, both in sales and foot traffic. The message was loud and clear from consumers, “Give me a large discount or lose me as a customer”. Traditional Black Friday sales were everywhere, but the retailers that won were discounting far beyond the standard 20%. Those that offered discounts in the 20-25%, like Ann Taylor, Banana Republic and Target, paid dearly for not being more aggressive.

The largest increases came from online purchases on Thanksgiving, Black Friday and Cyber Monday, a trend that will only increase from year to year as technology savvy generations become a larger population of the buying public. It’s no surprise that Monday, November 30th captured the prize for the most online sales since the term Cyber Monday was introduced several years ago, with Amazon increasing 28% , Walmart 22% and Apple 39% yr. over yr. Which begs the question, “Will brick and mortar stores be necessary in the future?”. Too many of the Kohl’s and Borders online shoppers, the answer will be a resounding “YES!” due to the eight online failures that occurred within a 14 hour period on the Kohl’s website and 16 failures on the Borders site, certainly costing them revenue. But consumer behavior is changing and for different reasons. More of the population is technology savvy, but equally as important, they are wiser to costs and prices of products.

Let’s look at who has reason to celebrate results for the month of November 2009 and why. Instead of looking at numbers, we will look at how public sentiment and behaviors are shaping retail now and potentially in the future.

Brick-and-mortar stores still account for the largest percentage (greater than 90%) of consumer purchases, even during the critical Thanksgiving to Christmas timeframe, but not all stores are created equal. Specialty apparel and children’s/teens stores, including Children’s Place (13% decrease) and Abercrombie and Fitch (17% decrease) lost out big time. Even Target, considered on the higher end of discount stores had a 1.5% drop. Is it a sign that parents are unwilling to pay outrageous prices for clothes that will be outgrown in a few months and tank tops/jeans that can be found at discount stores for a fraction of the price? The question of whether these companies will be able to survive even after the recovery is a real concern. When mindsets and behaviors change, there needs to be an overwhelming reason to resort to old ways. The products these stores carry is not differentiated enough to warrant an increase in spending, for the same thing they have been getting for the past 2 years at a lower price. Only time will tell, but with discounters grabbing market share it will be an uphill battle.

It’s not surprising that discount retailers TJMaxx/Marshall’s (8% increase) and Kohl’s (3.3% increase) were winners, picking up market share and loyalty from shoppers eager for a deal. What is surprising is where their sales for the month of November were the strongest…domestics and home furnishings with a 13% increase in that category at TJMaxx/Marshall’s. What does this tell us about the general public? With the majority of consumers tight for money, cutting back on everything including entertainment and eating out is a no brainer. So with more time spent at home, products that create visual pleasure and a feeling of comfort are items that consumers feel are worth the money. Changing bedding, adding a new rug or pillows and spending more time cooking/baking is an easy and practical way to bring us joy. It has been said many times that during times of economic instability, families get closer, probably due to the fact that they are home more often together, so creating the perfect environment is critical to compliment the time being spent with family.

Other products consumers bought heavily were their gadgets…flat screen TV’s, iPods, computers, etc. Stores carrying these items, including Costco (9%), Best Buy (XX) and Wal-Mart(7.5%) had comparable store and online sales increases from last year, with electronics the heavy winner. Creature comforts and the need to have the newest technology are driving forces behind these purchases. New technologies are making small electronics and gadgets obsolete in such short periods of time that upgrades or new purchases are required every year in some cases. Not to mention that they are fun and somewhat prestigious in their own right.

November results don’t necessarily predict what the end of the year will look like, but it is a relevant indication of where the consumer’s mindset is during these tough economic times. The good news is that we are seeing increases in sales, both in stores and online, and that is something to celebrate this holiday season.