Does it matter that Black Friday sales were down?
By all indications, Black Friday weekend sales and traffic fell modestly to sharply. The decline — occurring despite an expansion of Thanksgiving evening shopping hours by many stores — either represented an omen for a subpar holiday season or another indication of how early promotions, e-commerce and savvy shoppers are transforming holiday selling.
According to the National Retail Federation’s (NRF) estimates:
- Overall shopper traffic from Thanksgiving Day through Sunday, Nov. 30 dropped 5.2 percent to 133.7 million unique shopper visits versus the 2013 period;
- Total shopping, including multiple trips by the same shopper, declined 6.2 percent to 233.3 million;
- The average person who shopped spent $380.95 over the holiday weekend, down 6.4 percent from $407.02 last year.
- Total spending was down 11.3 percent to $50.9 billion.
The projections were based on a poll of 4,631 consumers conducted on Nov. 28 and 29 by Prosper Insights & Analytics.
"A strengthening economy that changes consumers’ reliance on deep discounts, a highly competitive environment, early promotions and the ability to shop 24/7 online all contributed to the shift witnessed this weekend," said NRF president and CEO Matthew Shay, in a statement.
On a conference call with the media Sunday, Shay admitted it was challenging to determine what factors carried the most weight in causing the weekend drop.
Clearly, early promotions, which were pervasive online, pulled sales away from the holiday weekend, Shay said, referencing his conversations with retail execs. Retailers brought out promotions earlier partly to entice consumers in the competitive landscape but also because they lost two weeks in 2013 due to inclement weather and "ran out of selling days."
While the economy is strengthening with the aid of lower gas prices, a healthy stock market, and rising home values, a "bi-furcation" of consumers is working against the holiday weekend, Shay added. With growth still not at the mid-single digit rate seen in pre-recession years, some households still "don’t feel great about the economy" and are restraining their spending.
On the other hand, the households that feel better with the economy’s improvement are "somewhat less reliant" on Black Friday weekend deals. Said Shay, "In the absence of a crisis mentality about the economy, people don’t feel the same psychological need to get the great deal, especially since they know more great deals are coming."
Online, with particularly aggressive deals this year, also continues to affect brick & mortar traffic. According to IBM’s Digital Analytics Benchmark, online sales gained 14 percent on Thanksgiving Day and 9.5 percent on Black Friday, with both Walmart and Target reporting record-breaking days. But NRF estimated that the early promotions also led to average spending online over the weekend to decline 10.2 pecent to $159.55 versus last year.
Asserting there are "still many weeks left," Shay said NRF continues to expect a 4 percent holiday gain this year.
Somewhat better projections came from ShopperTrak, which estimated combined sales of Thanksgiving were down 0.5 percent to $12.29 billion. A 27.3 percent jump on Thanksgiving with increased doorbuster deals almost made up for a 5.6 percent decline on Black Friday.
"We need to be cautious about looking at a single day or two in projecting the season’s total," said Bill Martin, ShopperTrak founder, in a statement. "In 2013, the Black Friday weekend produced a one percent gain, underperforming the 3.1 perfect gain for the entire season. There is a significant amount of energy left in the consumer with seven of the top 10 sales days of the year yet to come."
- Early Promotions, Online Shopping And An Improving Economy Changing The Face Of Black Friday Weekend – National Retail Federation
- Consumers Respond Positively to Thanksgiving Day Store Openings – ShopperTrak
- Target Shoppers Nationwide Score Doorbusters as Black Friday Gets Underway – Target
- Walmart Statement on 2014 Early Black Friday Results – Walmart
- Thanksgiving Sets Historic Milestone as Mobile Drives More Than Half of All Shopping Traffic, Reports IBM Digital Analytics Benchmark – IBM
- Black Friday Sales Slip as Discounts Start Earlier – The New York Times (tiered sub.)
- Black Friday Weekend Spending Tumbles 11% as Shoppers Stay Home – Bloomberg News
- IBM press release
Discussion Questions
Is the Black Friday weekend becoming significantly less relevant? How should retailers be adjusting to changing spending patterns around Black Friday weekend and the overall holiday period?
In an omni-channel world, Black Friday weekend is significantly less relevant. In fact, Black Friday itself may be on its last legs in terms of store sales.
Today’s omni-channel consumer shops anytime and everywhere—and over a longer period of time. They now have very powerful price comparison apps on their smartphones so that they can truly determine if a deal is really a deal.
Retailers must get over the schism of stores sales on Black Friday and online sales on Cyber Monday. For today’s consumer it is all one thing. The question is not whether Black Friday store sales are up or down, but if the retailer is generating more composite traffic and total sales this holiday.
Black Friday is becoming significantly less relevant. And honestly, retailers should want it to be. Why would you distort your supply chain, your workforce and pressure your stores to have to unnaturally support an enormous amount of shopping forced into one stinking day?
Not to mention consumers have caught on, as all of those stats amply indicate.
For me personally, I found that having retailers open on Thanksgiving Day meant shifting all of the crazy shoppers from Friday to Thursday. So when my family went out to Home Depot to buy some Christmas tree lights, it was actually a pleasant experience.
Maybe not so pleasant an experience for the retailers who persist in treating Black Friday like some kind of stand-alone experience that exists outside of the rest of reality—for those retailers, those stats are probably incredibly disappointing.
But this is the world we live in. My only regret for the Black Friday weekend is knowing that some of those Thanksgiving Day shoppers weren’t looking for gifts. Their holiday was spent standing in line and ditching their family dinner in order to buy staples they would not have been able to afford any other time of year.
To me, that’s what Black Friday (Gray Thursday?) has become. And I’m happy enough to see it fall by the wayside.
Not only has Black Friday become less significant, it is quickly becoming a distant memory like semi-annual sales, Nordstrom’s half-yearly sales and on and on. Price has become so transparent that retailers will need to find other ways to engage customers. Perhaps we’re coming full circle back to the notion of great (fair) price and high-level service. Price alone cannot be a stable sustainable business model.
It can’t come as a surprise that sales on Friday itself fell in brick-and-mortar stores, although the size of the decrease was bigger than I expected. Every year that sales are pulled forward by earlier openings—first from 6 a.m. to 4 a.m. to midnight on Friday and now to 6 p.m. or earlier on Thursday—takes the sense of urgency out of Friday morning. The entire four-day weekend has to be considered disappointing.
This year’s decline was more pronounced than usual because of the rapid shift to e-commerce and mobile commerce (not reported in the overall weekend numbers) and the probability that some sales shifted to the early part of November this year. As the consumer becomes more empowered each year by the information at her fingertips, she is also less likely to believe that Black Friday pricing is really the lowest of the holiday season.
Add it all up, and it probably made for a more pleasant, and less crowded, shopping experience on Friday. But the sheer size of the numbers will leave retailers sweating it out—as usual—for the next couple of weeks.
In a rather strange way all three of the RetailWire items today are about the same thing. That is: How do you influence human behavior?
This particular one is about shopping “patterns.” And we all love it when we think we’ve found a “pattern!” It makes it so much easier to manipulate and control shopping behavior. Or so we think.
The discount game has destroyed itself in many ways. There is no urgency to buy anymore. It’s like living in Arizona. When you’re new here from Seattle you rush to take advantage of a sunny day. Soon you realize that tomorrow will be nice too and so will all the following days. Or it’s like getting a Jos. A Banks sale notice. There’s no need to jump on it, there will another one, probably even better, in 48 hours.
The lesson is this: Remove the urgency and you lose your influence on shopping behavior.
As usual, Nikki has it exactly right. We’ve been saying for a long time that the only thing Thanksgiving openings and frenetic sales do is move sales around.
I think we’ll still see our 4 percent increase, but what we’ve done as an industry is distort demand curves to a point where we create our own uncertainty. And in an uncertain environment, retailers tend to take more markdowns, perpetuating the problem they’ve already created.
I was saying to someone over the weekend, there was a time when shoe retailers in particular would pray for light snow on Thanksgiving. Just enough so that consumers would realize they needed new boots. Now … meh. There’s a friends and family sale around the corner, Amazon or Zappo’s can get products to us overnight, and if we wait long enough, prices will go down.
This is a bad situation. Putting the top aside for a moment, the cost of HVAC and extra payroll for the Thanksgiving openings have to have an impact on the bottom line. And if your costs are higher, and your top line is the same, that means your profits go down. Simple math. And no easy solution at this point.
P.S. I went to a small local mall and to the movies on Sunday. The place was almost empty.
Yogi Berra once said, “Nobody goes there anymore. It’s too crowded.” I think a great number of consumers have come to the conclusion that shopping doesn’t have to be done in the madness and chaos of Black Friday. However, I’m also skeptical about how statistics are arrived at and analyzed these days when there are so many alternate methods of shopping. For one, “Black Friday” sales begin so much earlier now than they did in years gone by. Sales and advertising begin weeks ahead. Secondly, the obvious, that so many people shop online. I’m not too sure that retail sales on the date designated as Black Friday are meaningful anymore.
The pressure on retailers to beat sales statistics every day of the year is driving them to use their entire arsenal of marketing and merchandising tricks. As history has shown, a single day does not a year make. With all the various channels available to shoppers, things like “door-busters” may become obsolete.
The challenge is, and always has been, to provide surprise and delight for shoppers. This is true regardless of the day of year or the channel: in-store, online, etc. Despite the small sample size, my experience with friends and family are two-fold. 1) the lack of meaningful customer service and the stress of the holiday shopping experience has become predictable and simply “not worth the it.” 2) the frustration with a mark-down for a single day is bad for the brand. My son was in town and due for a phone upgrade. He went to the major wireless carrier’s retail store on Saturday. The clerk told him he should have come yesterday and would have gotten a better deal. The brand just added another VERY disenfranchised customer to its ranks.
Absolutely, for all of the reasons noted. However, in my opinion, online shopping has changed Black Friday forever. Consumers still remain time-starved and online shopping reduces the associated stress of holiday gift buying.
A couple of options: 1. Click-and-collect promotions that will drive traffic into stores. 2. Mobile delivered promotions that are only presented and executed while in-store.
The mad rush to save a few bucks on Black Friday is being negated by the online deals, as people can sit in their pajamas and order what they want and not fight the crowds. This trend will grow, as it is convenient, and the pricing for the key goods is about the same. The big box retailers will drive this hard, and actually will save labor in their brick-and-mortar stores, which will help the bottom line and ease congestion in the stores. The money will be spread over the holiday season as savvy shoppers will wait for the deeper discounts closer to Christmas.
Black Friday is gradually diminishing with stores opening on Thanksgiving Day and with the migration to online shopping. While I think holiday sales will continue to expand, in a few years Black Friday will have a significantly reduced impact on holiday shopping.
Mark one up for technology’s impact. We have produced an unique selling climate in which eventually everything becomes less relevant. As long as retailers chase sales and Wall Street grades them heavily on that factor don’t expect such craziness as Black Friday to perish from this earth.
Black Friday is absolutely becoming less relevant. Even the news coverage this year seemed to be sick of the whole idea.
With easily accessible lists of where and what the best deals are it has become apparent to most shoppers that Black Friday is only worth it if you are buying electronics—and most of those deals can be found online without the hassle of crowds, exhausted retail workers and the chance of a stampede.
The most competitive retailers will try to keep their prices low for most of the season and focus on convincing customers to do more of their shopping in their store (or on their site) by offering the most convenience or best experience.
Macy’s does a great job of this. They constantly have sales with the deepest discounts focusing on just a few types of items for two days at a time. This gets people in the door for a few items on their lists and then other in-store deals convince customers to buy more items. This plus their “Thanks for Sharing” program, where Macy’s card holders pay a $25 dollar enrollment that goes to charity and then receive 10 percent rewards on all purchases during the holiday shopping season, convinces many shoppers (like my wife and daughter) to do almost the entirety of their holiday shopping at their stores.
An old song came to mind as I read the numbers on last Friday’s sale. “The old gray mare ain’t what it use to be.” This old horse has been ridden to death.
Retailers keep asking her to work harder and harder and put in more work. She’s just worn out. It is time to find a new horse, or maybe a new method to get the work done.
It’s now become three weeks to a month of discounted holiday shopping before Thanksgiving. More retailers are opening their doors on Thanksgiving Day/night. More consumers are shopping online. It’s no wonder that Black Friday is becoming less relevant.
One example: A young couple I know—very savvy shoppers—went out shopping Thanksgiving night. They said they were home by 11 p.m. after a successful shopping trip and completed the remainder of their shopping online. Enough said.
I think retailers really need to focus on the entire holiday season more effectively, from November through January, viewing all channels as one shopping experience. It’s been said over and over again, but retailers need to think like consumers to succeed.
Stores were jam-packed ten days before Black Friday, and nobody waits for Cyber Monday. Don Uselman is correct: Retailers will have to find new ways to engage customers and engender loyalty beyond limited-duration Black Friday deals.
Oh, and shame on those retailers who forced their associates to give up Thanksgiving.
Woe to retailers who aren’t looking at the tea leaves. Old Navy and Gap had traffic on Thanksgiving/Black Friday because the entire store was 50 percent off. Most retailers have lived by the sword of discounts for a long time, now the pain of all those promotions is showing.
I saw the same Kitchenaid mixer “sale” price for the past 10 years as a leader for the majors, ditto 1/2 price on cashmere etc. The same promotions are stale.
Plasma TVs for $299 that are normally $699. Looks like crap didn’t sell so you’re discounting it heavily.
In truth, the shopping experience has been focused on discounts so long with shoppers moving like rats to the cheese, it isn’t a wonder they don’t want to do it any more. It’s Limburger.
Look in the mirror.
Been to a retailer lately? Deep discounts everyday everywhere. Black Friday is weakening because today, everyday is Black Friday
Black Friday has become less relevant by (retailer) design, thanks to the stretched-out promotional time frames that the majority of retailers have adopted. The 2014 holiday shopping season should go down in retail history as one of the most complex and experimental. As such, early reads on how everything is going, particularly those that focus on store traffic, may prove premature and one-dimensional. A more relaxed vibe doesn’t necessarily equate to lower sales in the end.
Over the years, retailers have trained their customers to know that the “big sale,” also known as Black Friday, happens the day after Thanksgiving Day. Then some retailers changed the plan. This year Black Friday started Wednesday, which means that there wasn’t really a Black Friday. It’s just a Thanksgiving week sale—but still called Black Friday. I think you’ll see numbers are still good for 2014, but the spike in a 24-hour period (Friday) may be off because of the extension of the sale dates. By the way, this will also impact Cyber Monday, as online retailers followed the lead of the brick-and-mortar stores and started Cyber Monday well before Monday.
Call it blurred lines that retailers simply continue to blur with little understanding of what they are not only doing to their profitability, but also, most importantly, to their brands themselves.
Some years ago as the online trends were only beginning to strengthen, gift cards changed the holiday shopping patterns significantly. Retailers failed to recognize this trend and I am not sure if they have yet.
In the same way, retailers have failed to recognize the shifting patterns towards online shopping and continue to march into the extremes of old patterns by marginalizing Black Friday, by blurring the lines there as well.
Furthermore, they fail to recognize how the shopping patterns of Millennials are changing everything while they continue to just try to exploit old trends.
Times they are a changin’.
There’s a message here, but retailers will think it is about Black Friday. The real message is completely different. The message is that their customers are much more savvy then they are and they are exploiting them—not the other way around.
There is not urgency. There is no price advantage.
The guys who better be prepared are the online retailers with their ability to deliver those December 23rd orders by the next day.
I don’t think the weekend is less relevant, however I do believe that shoppers are tiring of the crazy, all-night shopping fiascos of most recent years. There are definitely exceptions to this across the U.S., but I think shoppers are taking to online, as everyone suggests, and stores are better prepared to handle the traffic. I also think product deflation is a metric to better understand. In many cases the actual product movement tonnage increased, yet the revenue decreased due to lower selling prices than last year.
With more retailers getting their omni-channel groove on, the whole notion of Black Friday will further smooth out into a “Holiday Kickoff” week. While the traditional sport of the Friday store rushes will continue, it’s likely beginning to lose some of its value as an indicator of spending.
What we have been witnessing is a spreading of the holiday selling peak from one day to a whole weekend and beyond. Black, gray, cyber or pre-season, the deals keep coming, and shoppers know they will begin right after Halloween and continue through New Year’s at least.
It’s amazing to see how many ads and news reports this year invoke “Black Friday” as a familiar term for shoppers. I wonder how many of their target audience understand the phrase originated as accountant’s jargon.
I want to be the first kid on the block to declare Black Friday is officially OVER. Not just losing relevance, but kaput. By next year, merchants and pundits would do well to come up with a new buzz word.
It looks like the consensus in these posts is that Black Friday weekend is less relevant and will probably become even less relevant. What we’re missing for the moment is a better understanding of the consumer’s perception.
We have the transaction data reported in the article. But as one post suggested we don’t know what proportion of the purchases were gifts, staples or personal indulgences. Add that component to the other statistics and I think retailers will have something upon which to develop strategy for next year.
Oh, and it will help to hear the opinions of the Black Friday weekend shoppers and those who didn’t shop at all. Their attitudes and behavior examined by where they shopped, i.e., online only, brick-and-mortar only or both online and in the store, can help shape future retail strategy. How are they directing their shopping trips regardless of channel? What are they doing differently from last year and why?
The whole idea of Black Friday and Cyber Monday is shot. First of all, for what we used to call Cyber Monday, when is it NOT Cyber Monday, Tuesday, Wednesday, etc., now? That idea is long gone. And as for Black Friday, most retailers were giving heavy discounts the Tuesday and Wednesday BEFORE Thanksgiving so, what’s left to excite? Talk about shooting yourself in the foot.
There’s also a prevailing theory now among most consumers that the discounts will really start in earnest in the next couple of weeks, that the Thanksgiving Day weekend is just a pre-lim to the real deals about to come. And with online shopping and quick-deliver items, what’s the incentive to move so quickly?
All-in-all, it’s a sad state of affairs. Even the use of the term “Black Friday,” which was always sort of a secret term within retail organizations because we made so much money that day, is being used by sports shows, car dealers, bakeries. I mean, wow. You see, it sounds old-school, but the old model really worked: Nothing to do the day after Thanksgiving, so let’s go shopping! But now it’s 24-7 online and physical with insane discounts pretty much also 24-7. The thrill is gone, and it looks like that lost thrill has translated to the masses.
It’s now really “Black Friday week,” so no surprise that the single day was down. It’s spread across a wider time span.
In my area, the deals were not as good as they have been in past years. There really was not much motivation for me to get out there and deal with the crowds when I know they will have the same deals or better in the next few weeks.
As consumers continue to change their buying habits, I think Black Friday will be less relevant. Retailers need to look at their higher sales leading up to Black Friday to understand the volume shift. Online sales will again this year grow at a greater rate than overall sales. This means brick & mortar sales will not be as strong.
“We need to be cautious about looking at a single day or two in projecting the season’s total,” said Bill Martin
Truer words are seldom spoken, though of course we usually only hear them when sales are disappointing. And Mr. Shay gets my award for creative thinking in claiming that sales DECLINED because of a strengthening economy.
I think all the BrainTrust commenters got it right: Even without all of us being scientists, it seems obvious that the holiday shopping appears to be more spread out over a longer period over a wider variety of channels, and for a variety of reasons (which I’m happy to see). Ultimately, I think that’s better for the economy as well as for the retailers and the shoppers. Someone already wrote, the times they are a’changin’. Yes they are!
The NRF results were mined from data provided by shoppers, not retailers, through a study (survey) by Prosper Insights & Analytics. According to Gerald Storch, CEO of Storch Advisors, on CNBC this morning, we need to wait for the figures from the business sector. It may be too early to doom and gloom the effects of Black Friday pursuant to sales and profits.
The fact that less than one in ten, so far, are willing to look at the decline in consumer spending, the increasing number of store closings, the increasing number of business failures and the 20 to 30 million unemployed and under employed as supporting indicators for the existence of an economic depression in the past decade is amazing. The need to acknowledge the surrounding and prevalent economic conditions in any specific and overall market(s) is mandatory for creating accurate forecasts and sales planning tools. This statement should in no way be considered an opinion of any kind, but in fact a reality we must contend with and predicate forward plans with.
Just saw this: “Don not panic about the NRF Black Friday spending report.“
Black Friday is becoming less relevant and retailers will still make sales. I am delighted. shopping is more sane, customer experience can be appreciated versus people stampeded, retailers can hold onto their brand identity and experience and still have sales and promotions—without the nasty experience and drain on resources—human, financial, supply chain—to support one big day. Oh—off to do some online shopping now…Diana
As retailers begin to aggressively market as of Nov 1, many customers are being lured into making purchases prior to Black Friday. In addition to aggressive in-store promotions, online sites were also swinging at the ball as of Nov 1.
We will have to look at the numbers for total month, but sales are projected to be up. So the single day has been supplanted by a month. Some shoppers do recreational shopping on Black Friday, but I project that this number will decrease over time. After all, the sales on BF just aren’t that good anyway….
Retailers have made it so, and insofar as people no longer have to elbow themselves to a deal, its a good thing. We always heard about the sales side of black Friday but never the margin, and not much in the way of any multiplier effect it had on sales thereafter. One wondered if the people who lined up and sprinted to deals were going to be loyal at all. So, think it’s something whose time as peaked and retailers will continue to retool their programs across the entire “holiday” season.