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NEAL CONAN, host:

This is Talk of the Nation. I'm Neal Conan in Washington. The recession we're told started a year ago, but for retailers and their customers, this Christmas shopping season has been very different than a year ago. This weekend, more than a few stores slashed prices by as much as 75 percent to attract those of us who wait for the last minute, whether we're just procrastinators or canny customers looking for the best deals. Black Friday, the day after Thanksgiving, was better than expected, but the rest of the holiday season has been poor in many places, worse in others, and retailers have responded with extended hours and ever deeper discounts.

If you're selling, what are you doing and what works? If you're buying, what was different this past weekend? Our phone number, 800-989-8255. Email us, talk@npr.org. You can also join the conversation on our website. Go to npr.org and click on Talk of the Nation. Later in the program, rendition is on the Talk of the Nation opinion page this week. Reuel Marc Gerecht argues the Obama administration will face awful choices, including that one.

But first, recession retail. We begin with Brad Stout, he's the owner of Stout's Shoe Store in Indianapolis, and he joins us from there by phone. Brad, nice to have you on the program today. Happy Christmas.

Mr. BRAD STOUT (Owner, Stout's Shoe Store, Indianapolis, Indiana): Merry Christmas to you, and thank you for having me.

CONAN: And how are sales this past weekend?

Mr. STOUT: Sales are a little bit - they're off 10 or 15 percent.

CONAN: And no different this weekend than the weekend before?

Mr. STOUT: This last weekend was pretty good.

CONAN: Pretty good?

Mr. STOUT: Mm hm.

CONAN: All right. Is this your big time of the year? I can't remember the last time Santa brought me a pair of wing tips.

(Soundbite of laughter)

Mr. STOUT: Cap toes are more popular than wing tips these days.

CONAN: OK.

Mr. STOUT: And, you know, people are out shopping, and we do have shearling boots that are extremely popular, and house shoes are a nice item, and smart wool socks are a nice item. And people do give shoes for Christmas, and I think, when times are a little bit tough, people lean towards practical gifts, and shoes are practical.

CONAN: Yeah.

Mr. STOUT: So...

CONAN: Shearling boots like those Uggs?

Mr. STOUT: Exactly.

CONAN: OK. See, I haven't been totally out of a shoe store for the last 40 years. Now, retails chains have seen a big decrease in sales this holiday season. Compared to previous years, this one, presumably, is not going to be in the record books.

Mr. STOUT: We are not setting a record this year, no.

CONAN: And have you had sales to try to juice your revenue?

Mr. STOUT: We are trying to - everybody else is doing that, and so we're trying to concentrate on basic retailing, good customer service, having products in stock, marking down products appropriately but not across the board. My dad taught me years ago, don't mark down merchandise that you have to reorder. Mark down merchandise that you're going to - you want to clear out. That money goes into your bank account. The stuff that you mark down that you have to reorder, you just have to reorder.

CONAN: And you're sticking to that?

Mr. STOUT: Yes.

CONAN: Nevertheless, if making sure you have stuff in stock, that could be a risk if you can't move it.

Mr. STOUT: Well - but if you sold it, the odds are that you're going to sell it again. So, if you're keeping basic items in stock, eventually, you're going to sell it, and not going - that's conservative retail.

CONAN: And other than wings tips, which you already told us aren't moving so well, what is moving well this season?

Mr. STOUT: Well, the Uggs are moving well. Echoes are moving well. It seems, like I was saying earlier, more basic merchandise, Rockports, smart wool socks, which are Marina wool, beautiful, very comfortable, fairly expensive. 14 to 16, 17, $18 socks are selling extremely well, but it's cold out there. So - and boots, cortex boots are selling well. What's not selling well is fringy stuff.

CONAN: Hmm.

Mr. STOUT: People are sticking to the basics.

CONAN: And your store has been there for over 100 years. You mentioned your father taught you about this business. How does this recession match up with previous, as you listen to the family lore and from your own experience?

Mr. STOUT: Not even close.

(Soundbite of laughter)

Mr. STOUT: You know, it was - this is not the Great Depression. That was - I hope it doesn't become the Great Depression. But there obviously are social safety nets in place that weren't in place in the - during the Great Depression, but it was absolutely horrible for the people who lived through that. My family was lucky because we did have our business, and the business withstood the Depression, but didn't thrive. But, you know - then you talk about during World War II, when there was rationing, my family got back - father and his father got back from World War II, and shelves were almost empty.

CONAN: Hmm.

Mr. STOUT: Virtually no shoes on the shelves. So, this is tough, but it's not that tough.

CONAN: Those calls are people calling to tell you you're on the radio.

(Soundbite of laughter)

Mr. STOUT: Or just people calling to ask if we have Uggs.

CONAN: Brad, thanks very much. Good luck to you this holiday season.

Mr. STOUT: Hey, thank you. Bye-bye.

CONAN: Brad Stout, the owner of Stout's Shoe Store in Indianapolis. And joining us here in Studio 3A is Ylan Mui, the retail reporter for the Washington Post. Happy Holidays to you. Nice to have you back on the program.

Ms. YLAN MUI (Retail Reporter, Washington Post): Thank you so much.

CONAN: And is Brad Stout's experience being shared across the board, do you think?

Ms. MUI: Well, I think that he is seeing, you know, some trends that retailers are seeing across the country, which is that, as the holiday season has progressed, traffic has picked up inside stores. Sales have increased. But compared to last year, they're still not where they were. Saturday is typically the busiest shopping season - shopping day of the holiday season, and so, you're going to see a lot of people out in the stores. You're going to see a lot of people in that parking lot. But when you look at the comparison to last year, it's just not living up to what it was in 2007.

CONAN: I was interested looking at your face as he was describing his sales technique - don't slash your prices on stuff you have to reorder, just cut the prices way down stuff you're trying to get rid of.

Ms. MUI: Yeah.

CONAN: That doesn't seem to be followed by a lot of people.

(Soundbite of laughter)

Ms. MUI: Well, he has - I think that he has some - that he has some benefit of being a small retailer in that folks will come and shop to his store - shop at his store because they know that they're supporting him. They're supporting a local business. But for a lot of large retailers, they're finding that customers know that if they simply waited out, that the merchandise will go on sale.

So you're finding a lot of retailers just really cut prices across the board. I was out at a Macy's before I came here, and it seemed like every single rack had a 20, 25 percent off sign on top of it. So, you know, there is a lot of discounting going on out there. But retailers really have to be careful that they don't sort of give all the merchandise away.

CONAN: Let's get some callers in on the conversation. Helen with us. Helen is in Burlingame, California.

HELEN (Caller): Yeah. Hi, Neal.

CONAN: Hi.

HELEN: I just wanted to say, I was thinking the shoe retailer - I'm a Mary-Kay lady here in Burlingame. And I'm experiencing the same thing, and, you know, October, November, when things weren't as bad, I ordered all kinds of special Christmas creams that smell wonderful and Christmas colors, and nobody wants them. People just want their basic stuff, and they are buying some gifts from me, but they are buying basics for their daughters.

CONAN: So, the specialty stuff having a hard time moving, the basic stuff is selling?

HELEN: Exactly.

CONAN: And what are you going to do with all of those Christmas creams come January?

HELEN: I don't know. I might return them to the company. I might try to sell them as Mother's Day gifts. I don't really know.

CONAN: Uh-huh. So would you - do you bear - how much of the price - how much of a burden is that on you if you have to ship it back to the company?

HELEN: Um, I get back 90 percent of what I paid for.

CONAN: So not horrible?

HELEN: So not horrible.

CONAN: Nevertheless, this is not one of the great years you're going to remember.

(Soundbite of laughter)

HELEN: Well, it's my first year, so I'll remember it no matter what I do.

CONAN: OK, Helen. Good luck to you. Happy Holidays!

HELEN: Thank you.

CONAN: Bye-bye. And again, that experience, the specialty stuff not moving.

Ms. MUI: Right. You know, you're seeing a lot of folks stick to the basics. During this time when people are afraid about their jobs, maybe afraid about looking at their 401K, they're not willing to splurge and to take a risk on something that someone may or may not like that maybe they may or may not use.

So they're saying what is this person going to use for sure? What is this person definitely going to like? And they're being a little bit more conservative both in the things that they purchase and how much they pay for them.

CONAN: Let's get Lou on the line. Lou with us from St. Louis.

LOU (Caller): Yeah, hi there.

CONAN: Hi there.

LOU: I am an interesting story because we're supposed to be in a dying industry. I own a record store. And after five consecutive down years, we are up 20 percent for Thanksgiving week, 20 percent for the week after, and six percent for the week after that.

CONAN: Lou, you're selling vinyl?

LOU: Vinyl and CDs.

CONAN: And...

LOU: And - yeah?

CONAN: And this is - you're booming?

LOU: Booming. And I put it to two things. It's really interesting because in the last three years before this, our best-selling item was a USB turntable, which is a pretty expensive item.

CONAN: But that translates records into computer files, right?

LOU: Right. And that's way down this year, but the 10 to $20 gifts are just going like crazy. And I think it's - people aren't buying the $200 thing, but they're buying two or three CDs and calling it Christmas. We spent a lot of time planning for this Christmas and set up table after table of, you know, 8.99 or four for $24, three for $24 CDs that were brand new. And those things are sailing out the door.

The other thing that we decided to do was, whatever the chains don't do - like, we have a gigantic and always have had a gigantic selection of Christmas music because the chains just don't carry them. Lots of little things like that. The movie you can't get at Blockbuster, we have on DVD. The CDs that you will never see at the mall, we have on CD. And it's really about the rising musical literacy of the younger generation because there's so much music that they can get at, they can hear on the Internet. You know, we grew up with the radio. And I think it's harder for them to find what they want at a chain or a mall. I'm seeing my customers getting younger in the last year.

CONAN: That's also interesting. What is the movie you can't get at Blockbuster?

LOU: Huh?

CONAN: What is the movie you can't get at Blockbuster?

LOU: Oh, anime. Chop saki(ph).

CONAN: OK.

LOU: You know, karate movies. The slightly odder ones. Older TV shows.

CONAN: Hmm...

LOU: Stuff like that. You know, we don't really well selling HBO and Showtime TV shows. But TVLand TV shows, you bet.

CONAN: Well, Lou, continued good luck to you.

LOU: Thanks.

CONAN: Bye-bye. Have a great holiday.

LOU: Bye.

CONAN: Bye-bye. And that's an unusual story that - this is supposed to be a dying business, the CD and record sales business.

Ms. MUI: Well, you know, my husband is an avid record collector. He has a very large collection of vinyl, so it's probably him keeping that shop owner afloat. But, you know, there is still room for excellent retail execution. He sounds like he's made a plan. He's tried to carve out a nitch and go where they aren't. That's a very good strategy.

CONAN: The wee Willie Keeler strategy.

Ms. MUI: Exactly.

CONAN: Anywhere they ain't.

Ms. MUI: Anywhere they ain't, exactly. So, you know, there is still room for those people who can execute well to do well this holiday season, even though people are cutting back.

CONAN: And those displays that he's talking about, those tables, three for $24 new CDs. Those are important, too, because they will bring people into your store.

Ms. MUI: Exactly. I think that it was Target who said recently that they are going to be focusing on bringing out new merchandise for under $20. So bringing out sort of newness in a lower price point is going to be something that we're going to be seeing a lot off.

CONAN: Our guest is Ylan Mui, the retail reporter for the Washington Post. Don't run to the mall quite yet. We're going to talk more about what retailers are doing to lure customers in and whether anybody is buying, 800-989-8255. If you're selling, email us, talk@npr.org. Stay with us. I'm Neal Conan. It's the Talk of the Nation from NPR News.

(Soundbite of music)

CONAN: This is Talk of the Nation. I'm Neal Conan in Washington. Anybody who spends time - spent time at the mall this past weekend could tell you shoppers were out looking for deals but maybe not enough for the retailers. The International Council of Shopping Centers expects established stores to post their worst holiday performance since they started tracking data in 1969.

Today, we're talking about what stores are doing to lure in shoppers and whether anybody is buying all those deals. Ylan Mui is with us. She's the retail reporter with the Washington Post. If you're selling, what are you doing and what works. If you're buying, what was different this past weekend? 800-989-8255, email is talk@npr.org.

Earlier, we spoke with Brad Stout of Stout's Shoes in Indianapolis. We got this from Carol in Jacksonville, Florida. You don't understand. Stout's is not just any shoe store. They're a wonderful, full-service store that looks just like it did when I was a preschooler. I am now 65. They have real shoes, substantial shoes, and they know how to fit. They will always have good business. We do note, however, that she's writing us from Jacksonville, where I suspects it's a little warmer than it may be in Indianapolis this weekend. Let's get Lauren on the line, Lauren with us from Phoenix, Arizona.

LAUREN (Caller): Hi. Thank you for taking my call.

CONAN: Sure.

LAUREN: We just had a J. Crew outlet open up. And I'm a bargain shopper always. But I went up there because I got an email that they had, you know, up to 60 percent off. And I went in, and they had everything marked down, plus an additional 20 percent off your entire purchase. So, I saved like $150 on my entire purchase.

CONAN: So, 60 percent off, plus an additional 20 percent off your entire purchase.

LAUREN: Yeah.

CONAN: That's verging on free.

LAUREN: Yeah. Yeah. I mean, I knew I saved a lot, and then I finally looked at my receipt, actually, this morning and realized, oh my gosh, $150, that's a lot of money.

CONAN: My math has never been my strong suit. How much did you end up spending?

LAUREN: I spent about a $111.

CONAN: That's not bad.

LAUREN: No.

CONAN: That's not bad, Lauren.

LAUREN: Not all, especially for J. Crew, so I was pretty excited.

CONAN: All right. Thanks very much for the call. Have a happy Christmas. Bye-bye.

LAUREN: Thank you. You too.

CONAN: And, Ylan, that's - how can this be profitable for stores?

Ms. MUI: Well, we'll find out, actually, come the end of the fourth quarter. It actually may not be profitable for them at the end of the day. One thing that we're seeing this holiday season is that the types of discounting that is usually reserved for after Christmas retailers are doing now. And then they're saying, we're going to try to move as much merchandise as we can before the big day because they want to have less merchandise come December 26th. The longer the merchandise is on the shelves, the less it starts to become worse.

So, you know, we're seeing those kinds of sales, those kinds of 60-percent-off sales now. And then, on the day after Christmas, retailers are looking at having door busters such as opening 5:30, special deals for a limited time, you know, sorts of things that we normally see during Black Friday as well. So the discounting is definitely fast and furious.

CONAN: We'll see whether it - will volume make up for the loss of, you know, if you're discounting 75 percent? I mean, that's a lot.

Ms. MUI: Retail typically has a pretty high margin that they can play around with. However, stores are going to be seeing some difficulty, I think, at the end of the fourth quarter. We already saw in the third quarter, Target posted at 24 percent decrease in their earnings, so I believe that they're not going to be the only ones.

CONAN: Are we seeing any examples of the old dodge of, you know, increase prices by 300 percent, then say 200 percent off.

Ms. MUI: I think shoppers are smarter than that this season. Again, I've been at Macy's for several days, and I don't think that the prices have increased. They need to come down. However, you know, there may be some isolated cases of that happening.

CONAN: Let's get Shawn(ph) on the line, Shawn with us from Kensington, California.

SHAWN (Caller): Hey there, Neal, happy holidays. What a timely show.

CONAN: Well, we like to work that way, but go ahead, Shawn.

SHAWN: Hey, listen, this was the year that I was supposed to make a couple of big ticket purchases. I was going to buy a new car and a new big screen TV. But with the economy going where it was along with my 401K, my wife and I - mostly my wife - decided that we should hold off. However, being the person that she is, open to the big screen TV idea, and I'm just wondering if I should wait until after Christmas to make that purchase.

CONAN: Any advice?

Ms. MUI: Well, I'd say it depends on how badly you want it.

(Soundbite of laughter)

Ms. MUI: If you want it - if you wanted to see, you know, the big Christmas Day game, then I would say you can get it now. But I strongly believe that prices on flat screen TVs will continue to fall. We've seen them falling for the past couple of years, if only because of the technology has decreased the price.

But I think that we're seeing Circuit City hurting. We're seeing Best Buy lowering its earnings for the year, its earnings is forecast for the year. So I think that retailers are going to be in a spot where they need to get rid of merchandise, and you might see that price come down even further.

SHAWN: Well, hopefully, I can convince my wife that that's right thing and be able to get one in time for the rest of the ball games throughout the year.

(Soundbite of music)

CONAN: OK, Shawn, thanks very much. Good luck.

SHAWN: Happy holidays.

CONAN: Bye-bye. Email from Ken in San Francisco. Saturday, the last Saturday before Christmas, I was in the Home Depot here in the San Francisco Bay area - not Christmas shopping, by the way. At 10:30 a.m. the place was weirdly quiet. More than once, I found myself in an isle in which there were no shoppers or staff from the front of the building to the back wall. The parking lot was half-full. There were no waiting lines at all, and there were small groups of staffers standing around talking. The store in my experience is always busy with full parking lot and waiting lines. And, boy, they do a lot of sales before Christmas, too, because a lot of people are buying stands and artificial trees and all kinds of things in those stores.

Ms. MUI: Yeah, exactly. But I think that the home improvement and home furnishings sector has been particularly hard hit. We're seeing - because of the housing slowdown, we're seeing maybe some folks not coming in to do some of the construction that they had done before. And we're also seeing folks say, maybe for Christmas in a previous year, they might have redone their cabinets, or maybe they might have put in a new carpet in the house as a gift toward the entire family. This year, people aren't doing that as much. ..TEXT: CONAN: Let's get Leslie on the line, Leslie calling from West Bloomfield in Michigan. ..TEXT: LESLIE (Caller): Yeah. I'm reporting from Michigan, and it is bad here. My mother owns a lady's store, and every night, you know, every time we get together with my mother, the first thing that we tend to talk about is how bad it is at the store. You know, she had to let a person go, and it's just really, really dead here. ..TEXT: CONAN: You say lady's store, so dresses, hats, those sorts of things? ..TEXT: LESLIE: (unintelligible) ..TEXT: CONAN: OK. ..TEXT: LESLIE: You know, blouses, skirts, pants, that sort of stuff.

CONAN: And people are just not - are old customers explaining to your mom why they're not shopping?

LESLIE: No money. You know, everybody is hurting up here.

CONAN: Michigan, if we've been in a recession for one year as a country, Michigan has been in a recession for - I don't know, how long, Leslie, would you guess? ..TEXT: LESLIE: Oh, let's see. My recession started in 2005. ..TEXT: (Soundbite of laughter) ..TEXT: CONAN: Well, Leslie's recession, we'll call it that. It started early up in Michigan... ..TEXT: LESLIE: Leslie had a small resurgence, but no, I mean, like my feeling is, when I'm not working, it's a depression. ..TEXT: (Soundbite of laughter) ..TEXT: LESLIE: And I got laid off in 2005. I had - I worked for about 10 months, and then I got laid off again. And, I mean, we're just watching the auto industry, you know, and praying that things will be better next year. I mean, it was really tense up here, and everybody was really kind of ticked off at what happened in Congress. ..TEXT: CONAN: Last couple of weeks, yeah. ..TEXT: LESLIE: Yeah. And then finally, my mother called me, oh, you know, you got to listen to the news. The president is going to make an announcement. And I could literally hear the hallelujah when he said he was going to give the auto industries the bridge loan. ..TEXT: CONAN: Yup. But then maybe some grumbling when you found out the details. But anyway, more about that later. Leslie, have - I hope you have a great Christmas. ..TEXT: LESLIE: Oh, yeah, we're doing OK. It's going to be - it's going to be small, but I'm taking my daughter shopping after Christmas, on the 29th. And we're just going to - you know, she'll get more because of all the sales. ..TEXT: CONAN: Hmm.

LESLIE: But - well, I have a budget, you know, an amount that I'm going to spend, and when that amount is spent, then...

CONAN: Then it's gone.

LESLIE: Shopping spree is over.

CONAN: OK.

LESLIE: But it'll buy more this year.

CONAN: Well, better New Year.

LESLIE: Yes, thank you very much.

CONAN: So long, Leslie. And, well, we know about Michigan, but, obviously, things are different depending on where you are.

Ms. MUI: Exactly. Some areas have been hit harder than others. I was looking at some reports from shopping malls across the country, and the Fair Oaks Mall had reported that sales were slightly up over the holiday, over this past weekend.

CONAN: Fair Oaks, California?

Ms. MUI: Oh, sorry, Fair Oaks in Virginia.

CONAN: Virginia, OK.

Ms. MUI: It's northern Virginia, the Washington D.C. area. Our economy has been pretty resilient because of the government, because of many things. But their sales were slightly up over the weekend. But other locations across the country, sales are pretty much trending flat to negative.

CONAN: Let's go to - I heard somebody say flat is the new up. Bob is calling from Grand Haven in Michigan.

BOB (Caller): Yes, hello.

CONAN: Hi, Bob. You're on the air. Go ahead, please.

BOB: Well, thank you. Yes, I work - my profession is, I work with small independent retail store owners. I owned my own kite store for 20 years. And the comment that I'd like to make is that flat may be the new up, and there are some definite challenges in retail today.

But our clients, not because they're so smart - they are clients - but the people who are being incredibly proactive about building relationships and staying in touch with their customers and doing more than just pitching price, price, price, price, price, price are doing quite well. We have several clients who are up 15, 20, some of them even up 30 percent this holiday season.

CONAN: In what kinds of businesses?

BOB: Ah, small independent, you know, gift stores, pet stores, shoes stores, you know, stores like that, and what they have been doing all year long.

CONAN: Ylan Mui, is it possible that because those big box stores are having so much trouble, maybe smaller stores like the ones Bob is talking about or Stout Shoes in Indianapolis are doing a little bit better.

BOB: Absolutely, you know...

CONAN: Hold on. We wanted to hear from our guest here. Stay with us, if you would, Bob.

Ms. MUI: Well, I think that's one of the advantages that small retailers have is that, you know, I think this holiday season, people are looking at their dollar and saying, I want it to do more, and maybe that more is not simply buy more product, but that more can be support a local business, support the guy that, you know, goes to my PTA meeting, and I see him around town, or support the small dressmaker or what have you. So, people are saying, I want my dollar to do not only good for the product that I'm buying, but also good for the business I'm buying it from.

CONAN: And, Bob, you're echoing that?

BOB: Absolutely. And not just buying local, but buying from somebody I know, buying from somebody who has been in touch with me several times a year, buying with somebody I have a relationship with.

CONAN: Bob, good luck to you.

BOB: Thank you so much.

CONAN: So long.

BOB: Bye-bye.

CONAN: Let's go to Benjamin, Benjamin with us from Oakland, California.

BENJAMIN (Caller): Hi. I completely agree with Bob. I have a small business that I've grown to be a medium-sized business over the past 10 years. And...

CONAN: What do you sell?

BENJAMIN: Beautiful, decorative, low-energy lighting.

CONAN: OK.

BENJAMIN: And my website is coolmeon.com, and I have - we pride ourselves on strong customer service and have a very faithful customer-base...

CONAN: And how are you doing this season?

BENJAMIN: And unlike Brad, we have decided to dramatically decrease price on our most reordered products.

CONAN: Hmm.

BENJAMIN: We're lowering our inventory for the end of the year to not pay income tax on our inventory.

CONAN: I didn't know you had to pay income tax on inventory that's in hand. That's considered income?

BENJAMIN: On hand - I'm a small - I'm a sole proprietorship, and like Joe the plumber, everything that we hold at the end of the year is considered taxable for this tax year. Of course, it comes off next year, but our sales have been somewhat down this year, and we're moving our most popular merchandise to carry zero inventory and completely reorder for the New Year.

CONAN: And is it working for you?

BENJAMIN: Yes. Yes, it is.

CONAN: Well, Benjamin, good luck.

BENJAMIN: Thank you very much.

CONAN: Like Joe the Plumber, are you going to write a book and go into the radio business?

BENJAMIN: I think not. I'm very happy working with my one employee, who is also a light artist providing unique lighting products. That's our strong suit, and that makes us very happy.

CONAN: All right, Benjamin. Thanks very much. We appreciate it.

We are talking about retail this Christmas holiday shopping season. How is it doing? If you're selling, what's moving? What's working? 800-989-8255, email talk@npr.org, and you're listening to Talk of the Nation from NPR News. Let's go to William, William with us from Las Vegas.

WILLIAM (Caller): Hi, Neal. Great show. Glad to be on the show.

CONAN: Thanks for calling.

WILLIAM: I wanted to talk about - I work for an online retailer, zappos.com, and...

CONAN: Sure. Big, big shoe sales.

WILLIAM: Shoes, yeah. And we're now branching to all kinds of different things, but I want to speak to the fact that, we are really, really, really, strongly focusing on customer service. We always do. You know, we tend to find that the more you discount an item, the more people are going to expect that discount even after the holidays. And so, as a result, we're doing small sales here and there, but, I mean, the max is maybe 10, 15 percent.

The key things is free overnight shipping, free return shipping, perks like that. We're finding that, as long as we keep focusing on the customer service aspect of it and offering things that the customer will truly appreciate other than just a lower price, that those people will keep coming back, and as a result, 75 percent of our sales are repeat customers.

CONAN: I'm sure that statistic is right, Ylan Mui. But nevertheless, people who take orders by computer and over the phone are at a fundamental, you know, disadvantage in terms of customer service.

WILLIAM: Well, we are...

CONAN: Hold on. We are, again, trying to get our response here from our guest, who's the retail reporter for the Washington Post. Go ahead, please.

Ms. MUI: That's quite all right. I know that, just speaking personally, when you are dialing up over the phone to order a product that oftentimes maybe you have less patience than if you were dealing with someone face to face, what have you.

But I will say that a lot of people had turned to online shopping this year as a way to beat the traffic at the malls but also to save a little bit of money. A lot of online retailers have said they're offering free shipping. It's almost a standard now. If you pay for shipping, you really shouldn't be. You're almost wasting your money because so many people will offer it for free. So, online retailing has done better than retailing as a whole.

CONAN: Nevertheless, we just saw a projection that online retailers expect to have a decline. This for the first time since they started measuring online sales, what, eight years ago or something.

Ms. MUI: Yes. Online sales are expected to decline by about one percent this holiday season. However, again, flat being the new the up, one percent decline is better than a lot of the projections we've seen for retail overall.

CONAN: OK. William, good luck.

WILLIAM: Thank you.

CONAN: So long. And let's see if we can go now to Andy, Andy with us from Kansas City.

ANDY (Caller): Hi. How are you?

CONAN: I'm well, thank you.

ANDY: Well, I just wanted to say, we own a upscale consignment store in Kansas City called Pete and Repeat. We've been - my wife and I have owned it. We've been there 21 years, and we're having our best year ever.

CONAN: Consignment, of course, people bring in clothing that they may not want or need or maybe they need some money, and you decide whether to sell it or not.

ANDY: That's absolutely what it is. We sell women's, children's and maternity clothing, and we've been there so long that we're very picky about what we - we can be very picky about what we put on the floor. And what it is, is people want to - they still want to dress well. They want to dress their children well, and they want the labels. They just don't want to spend 40, $50 for a T-shirt.

CONAN: And you split, typically, with one of your - the people bringing the clothes, what, 50-50?

ANDY: Exactly. Usually, a 60-40 split. You know, we had to - if they use on the store, it's a 50-50 split, but it's interesting. We were doing, you know, just kind of OK, perking along until August. In August, when all of the bad news started to hit, that's when our sales really started to increase.

CONAN: I think we found the growth sector of the industry, Ylan Mui.

ANDY: There you go.

Ms. MUI: Yeah. You know, I think that, again, people are looking for bargains, and so therefore, they're turning to consignment shops or turning to places even like Goodwill, even like the Salvation Army. You know, I've also heard of some women holding parties where they each bring a dress that maybe they haven't worn in awhile or some article of clothing, and then they just swap. You know, they sort of look for gifts in each other's closets.

CONAN: So, they have, what, size seven parties?

(Soundbite of laughter)

Ms. MUI: Size seven parties or maybe a pair of shoes or maybe a bag, something that can span many sizes.

CONAN: Andy, merry Christmas to you, and I'm glad you're doing well.

ANDY: Thank you very much. I really appreciate you taking my call.

CONAN: And thank you for calling. (Audio missing) She joined us here in Studio 3A. Coming up, on the opinion page, an argument that, despite the promises, the Obama administration may reluctantly have to accept extraordinary rendition. Stay with us. I'm Neal Conan. It's the Talk of the Nation from NPR News.

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