As Western New York retailers forge ahead in 2012, they will draw both encouraging and challenging lessons from 2011.
Retailers here welcomed gains during the 2011 holiday season, and were quick to celebrate the influx of shoppers who left stores with arms full of purchases.
But even as merchants celebrated the hordes of returning shoppers, they noted the persisting "new normal" of consumer price expectations.
In other words, stores report, almost no one is willing to pay full price for anything.
"When shoppers come in, they expect to see deep discounts," said Betsey Bonvissuto, marketing director at Boulevard Mall in Amherst. "Even something like 40 percent might not motivate them."
In response, retailers have learned to deploy a whole array of tricks to entice customers into feeling that it's OK to part with their money.
They've introduced price matching, price guarantees, no hassle returns and simple rebate processes.
They've also responded to the pressure to provide steep discounts with sleight-of-hand tricks, such as raising prices to artificially high levels, then "slashing" them to reflect a discount.
"Retailers want to signal they have the lowest price, whether it's really true or not,'" said Arun Lakshmanan, assistant professor of marketing at the University at Buffalo School of Management. "It's almost like a given. And now shoppers are like, 'What else can you give me?'"
Clearance racks were once tucked into the backs of stores, but now merchants try to categorize nearly any price cut as a "clearance special," often using brightly colored tags or bold signage to draw shopper attention.
Bath and Body Works and Victoria's Secret routinely run "free gift with purchase" specials. And Target's website now prominently sports three new buttons at the top of the page -- taking shoppers directly to coupons, clearance items and the store's weekly sales ad.
One of the easiest categories to mark up and mark down is clothing. Because there are so many intangibles involved, and because fashion is so subjective, it's hard for a consumer to say how much an item should cost.
"[Markdowns are] very prevalent in clothing. Trends have a lot to do with it, fashion has a lot to do with it," Lakshmanan said.
One bright spot in women's purchases, however, has been in handbags.
Retailers never got into the habit of discounting them heavily, so shoppers were never conditioned to expect to pay less for them.
That makes them slightly more profitable than women's clothing or traditional accessories. As a result, celebrity designer labels -- such as Gwen Stefani's L.A.M.B., Rachel Zoe's Luxe and the Jessica Simpson Collection -- have bumped up their accessory offerings.
Still, stores are expected to feature women's apparel more than handbags, because clothing is what draws women in, according to SageBerry Consulting LLC, a luxury consulting firm in Texas.
Women purchase clothing more often than they do handbags and spend more money on clothing than accessories. They spent roughly $108 billion on clothes last year, compared to $5.7 billion on handbags, according to market research group NPD Group.
Retailers are also increasingly courting male shoppers.
For decades, women have been considered the primary household shopper. But studies show men ages 18 to 50 are beginning to take on more of that role.
Reports vary, but show an increase in men who say they are their household's main decision-maker when it comes to purchasing consumer goods. One national study, conducted by market research firm DB5, put the number of male primary household shoppers as high as 51 percent.
The reason for the increase is unclear. Experts speculate it has to do with men staying unmarried longer, shifting gender roles and the recession's impact on male unemployment.
Whatever the cause, retailers and advertisers are taking notice.
Procter & Gamble began testing "man aisles" in 2009 and has plans to expand the model into such chains at Walmart, Target and Walgreens this year. The program groups men's personal care products into one place, making them easier for men to find, making men more comfortable shopping, and increasing the amount of money males spend.
Commercials portraying men as buffoons are still prevalent, but smart marketers are taking a different tack.
One case in point is Procter & Gamble's outrageously successful Old Spice campaign, starring the ultra manly Isaiah Mustafa.
The commercial appeals to both men and women. For women, there's the tagline "The man your man could smell like." For men, the ad is funny but not patronizing, and Mustafa is handsome, but not intimidatingly so.
It's a far cry from spots for things such as Axe body spray, which show women driven crazy by the scent of Axe products. It's a fine sell for males, but alienates women.
In the end, for both men and women, price is king.
"I would rate it as the most important factor," Lakshmanan said.