Does weak traffic spell trouble for Black Friday?

Discussion
Nov 30, 2015

Traffic, as expected, is projected to have declined again over the first two days of Black Friday weekend.

ShopperTrak estimates that brick-and-mortar retail sales on Thanksgiving Day and Black Friday reached $12.1 billion on a combined basis, which is down from the $12.3 billion it projected over the same two days in 2014. Specifically, Thanksgiving Day grossed an estimated $1.8 billion in sales, while Black Friday garnered an estimated $10.4 billion in sales

Preliminary numbers indicate a decrease in shopper visits on both Thanksgiving Day and Black Friday versus last year.

Somewhat more encouragingly, RetailNext noted that while it found Black Friday was down 1.8 percent, the decline was considerably smaller than the monthly declines experienced throughout spring, summer and autumn of 2015. Including Thanksgiving, traffic was flat. RetailNext had previously found overall holiday traffic declined in 2013 and 2014.

The latest traffic decline on Thanksgiving and Black Friday was traced to holiday sales that began as early as Halloween this year. The heavy discounting was partly due to a warm November and some felt last week’s doorbuster deals were lighter this year as part of a plan to spread sales throughout the season.

Shrinking store visits are also linked to consumers using computers and smartphones before hitting the stores.

NRF Thanksgiving weekend survey chart

NRF’s 2015 Thanksgiving Weekend Survey

"Fewer visits on both days reinforce the trend we’ve seen throughout the year, in which shoppers are researching products ahead of time, targeting their store visits, and arriving in-store with the intention of making a purchase," said Kevin Kearns, ShopperTrak chief revenue officer, in a statement.

Finally, online is taking a bigger share of holiday sales, boosted by aggressive email campaigns and the expansion of mobile devices as shopping tools. Said NRF President and CEO Matthew Shay, in a statement, "It is clear that the age-old holiday tradition of heading out to stores with family and friends is now equally matched in the new tradition of looking online for holiday savings opportunities."

According to Adobe, online sales reached $2.72 billion on Black Friday, 14 percent more than in 2014, and $1.73 billion on Thanksgiving Day, a 25 percent increase. On Black Friday, mobile devices drove 53 percent of shopping visits (40 percent smartphones, 13 percent tablets) and represented 21 percent of online sales on the day.

While most are expecting online sales to still contribute less than 15 percent of overall holiday sales, retail executives were again left to defend brick-and-mortar stores and explain how online is reshaping shopping. Terry Lundgren, Macy’s CEO, told CNBC on Friday, "The consumer likes that multi-dimensional experience today more so than ever. I think stores that are strong online, and strong in-store will be the winners of retail in the future."

Should retailers be concerned about the apparent erosion in Black Friday weekend traffic? What’s your assessment of the health of holiday sales based on Black Friday weekend?

Braintrust
"We won’t have a true picture of consumer spending in November until the month’s sales estimates come out. Until then, all estimates about consumers spending less are just guesses."
""Concerned" is a funny word in this case. Is the objective to sell merchandise or is the objective to sell merchandise in a store? If total Black Friday sales are up (all channels), isn’t that good?"
"First of all, you can now shop on Thanksgiving so all the first-in-line crazies are out of the way the next day. Second, online sales are so well promoted and so much less hassle, it’s only a matter of time before they REALLY eclipse the physical experience year-round.."

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28 Comments on "Does weak traffic spell trouble for Black Friday?"

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Max Goldberg
BrainTrust

We won’t have a true picture of consumer spending in November until the month’s sales estimates come out. Until then, all estimates about consumers spending less are just guesses. Retailers tried hard to lure consumers into their stores since November 1 by advertising Black Friday deals long before Thanksgiving weekend. Likewise, we cannot estimate the health of holiday sales solely based on Black Friday numbers.

Ken Lonyai
BrainTrust

Black Friday is an old retail notion that has ever-more-diminishing value. Now that mobile/e-commerce has reached a large enough scale to be a way of life for many shoppers, the season is more of a yardstick than a day, a weekend or a week. Of the e-tailers I saw, they all extended Black Friday to Saturday and most started Cyber Monday on Sunday. It’s all just a sales blur and as each company assesses its daily sales targets off and online, they will add/remove discounts on the fly in hopes of meeting seasonal/year-end targets.

For me, the real assessment cannot come until mid January when the holiday and post-holiday sales have ended and the immediate rush of returns has been adjusted into sales figures. So with today only being Cyber Monday, I do not believe the industry has much to worry about.

Bob Phibbs
BrainTrust

As I wrote in my blog yesterday, How To Deal With The Retail Holiday Headlines Designed To Scare You; as much attention as the doom-and-gloom headlines will garner today and much of the next month, the reality is that sales have risen 11 out of 12 years.

If retailers were concerned, just a mirror check. When you give the deals in October once reserved for one day in November and when stores are mostly open Thanksgiving and there is no compelling reason to shop the day after, you’ve pretty much torched the scarcity idea in customers’ minds.

Thursday and Friday have pretty much become just another shopping day.

Finally, while online sales are growing, Forrester Research forecasts brick-and-mortar shops will still control roughly 90 percent of retail sales. Sniff around for where dramatic increases from online retailers come from and you’ll most likely discover they are created by PR companies looking to create buzz.

Retail is still as healthy as ever, and as prone to hyperbole as ever too.

Cathy Hotka
BrainTrust

We saw this last year, too. Savvy shoppers want the best discounts they can get and they’re willing to wait to get them. And it was telling to me that on Black Friday Bloomingdale’s looked a little thin, but there was a huge line at Marshall’s. With little truly new merchandise this year, Christmas sales are going to be all about the discount.

Dick Seesel
BrainTrust

One mall doesn’t make a big sample size, but the Simon mall that I shopped on Friday morning is anchored by Macy’s, J.C. Penney, Sears, Bon Ton and Kohl’s. So it’s a good place to look for areas of common ground. I noted the same thing that many observers saw nationwide: Mall traffic was not impressive around 10 A.M. on Friday, at what should be the height of “doorbuster” sales.

Yes, the growth of omnichannel, Thursday openings and week-long “doorbusters” (instead of for a few hours on Friday morning) have all affected post-Thanksgiving volume. But these tactics didn’t just start in 2015. They have been gaining strength for the past several years. So how to account for the visible dropoff on Friday? I believe it still comes down to merchandise content, especially in the women’s apparel areas that have been troubled all year. In my observation, this was consistently the quietest area of the stores.

That being said, it’s too early to write off the weekend (or the season) until somebody adds together the brick-and-mortar numbers with the e-commerce sales and what is likely to be a robust Cyber Monday (or “Cyber Week”) this year.

Ralph Jacobson
BrainTrust

I don’t think there are any real surprises in these statistics. Shoppers continue to bifurcate into online and offline purchasing. And although consumers do still make shopping trips to stores with friends and family, a portion of online shopping, also sometimes with friends and family we’re finding by the way, grows each year. The overall pie of holiday shopping spreads out more away from Black Friday, however not to a significant degree. More and more people are waiting for the “big deals” closer to the holidays.

Dr. Stephen Needel
BrainTrust

If the estimates are close, sales are up by half a billion or so. Not too shabby. If retailers want to get people in stores, presumably to drive impulse purchases, give them a reason to come — in-store specials, mystery deals, etc.

Chris Petersen, PhD.
BrainTrust

Retailers should be concerned about the changing patterns of omnichannel shoppers and how to adapt to their behaviors. As a result, retailer strategies and metrics also need to change.

A definition of insanity is doing the same things over again and expecting different results. Many brick-and-mortar stores are still running the same Black Friday ads and price-driven promotions, but shoppers can now get those for many days online … so why would you expect the same results?

And then there is today. Cyber “Monday,” which actually started on the weekend for many e-commerce retailers. Shopping traffic is now spread across physical and virtual stores for many days, if not weeks.

In addition to changing strategies to adapt to consumer shopping behaviors, the metrics also need to change to reflect purchases across channels.

The traditional metric was cash register rings in stores on Black Friday or the weekend, BUT the real measure of retail success today is whether a retailer captures more sales (on AND offline). When, where and how the customer purchases during this holiday seasonal period.

Tom Redd
Guest

No. The channel is not the issue anymore — it is the totals at the end of the buying season. The store is far from dead or dying. It is changing and it is being synced up with the online channels, from mobile to PC. The OLD WAYS of measuring retail performance are changing. Update those methods and get off the very old “store is dying” gig. Many people shop the stores then the web or vice-versa. In the end, who cares what channel? Retail is not your wacky omni-term that some love — it is RETAIL.

Think total RETAIL. All channels, whatever the shopper deems hip to them.

Frank Riso
BrainTrust

No, they should not be concerned. Shoppers as noted are sharing their shopping trips between online and in-store. This year due to lower gas prices and better sales, they will spread out their shopping over the next three weeks and sales will increase for most retailers.

Ed Rosenbaum
BrainTrust

It is too soon to be concerned. Wait until the season is just past the mid-way point and then we will see where it stands. I am wondering if the early numbers are an indication of the shopping public saying they have had enough. No more opening on Thanksgiving Day. Let your employees be with their families.

Zel Bianco
BrainTrust

I think it’s important to note both the preliminary nature of the reports of a slow Black Friday and to consider the rapidly changing rhythms of holiday shopping. I know I have been taking advantage of Black Friday deals since last Monday and I plan to keep an eye on several bigger-ticket items over the next few days. Retailers need to take these numbers with a grain of salt and look at their holiday sales strategies as a two-month long marathon, not a sprint.

Gene Detroyer
BrainTrust

“Concerned” is a funny word in this case. Is the objective to sell merchandise or is the objective to sell merchandise in a store? If total Black Friday sales are up (all channels), isn’t that good?

Consider that retail sales will grow on average about 2 percent every year for the foreseeable future. Some projections have online sales growing almost 60 percent by 2020. And even if the year-to-year rate of growth falls, the absolute magnitude of the growth gets bigger and bigger.

Fill in the numbers however you like, the result is that all the online sales growth above 2 percent comes out of brick-and-mortar on an absolute basis. So don’t be concerned. Use the information to fix the business model instead of fighting the inevitable.

Todd Hale
Guest
Todd Hale
1 year 8 months ago

The 14 percent e-commerce Black Friday growth is on par with e-commerce sales growth over the past several quarters, so no surprise from this reader. Department stores and specialty retailers will need to aggressively manage store closings smartly to shift investments to drive growth from their digital assets.

Brian Kelly
Guest
1 year 8 months ago

Online offered the consumer the opportunity to shop when she wanted to shop. So she did. Retailers reacted by pushing Christmas up to Halloween and basically skipping Thanksgiving by opening stores.

“If she wants to shop online, she’ll want to shop in a store,” doesn’t quite ring like “cogito ergo sum,” but reactionary retailers think its genius. And now they are going to scramble to protect the bottom line.

While in a Walmart, the store manager lamented the momentary surge on Thanksgiving, the over abundance of TVs and the lack of anything new. Walmart! That was telling.

Black Friday is a concoction of journalists who never ran a store. For those of you who did run a store, you know Black Friday is pure hype, a bubble. The day that matters is the Saturday closest to Christmas, when it’s not on a Sunday.

Total retail will be up about 3 to 4 percent between November and December. At least that’s close to the consensus of the notable prognosticators. Total because separating out a channel’s contribution is so yesterday. Or at least a couple of years ago.

As Mrs. Claus reassures Santa, “retail ain’t for sissies!”

Lee Peterson
BrainTrust

First of all, you can now shop on Thanksgiving so all the first-in-line crazies are out of the way the next day. Second, online sales are so well promoted and so much less hassle, it’s only a matter of time before they REALLY eclipse the physical experience year-round, let alone Thanksgiving Day weekend.

Fact: The entire retail landscape is changing due to the upgrade of the online experience. This disruption, albeit not new, is finally starting to take hold in a massive way, especially as it applies to physical retail. ALL of our thinking, planning, historic sales patterns and most especially our retail environments will have to change. Get used to it. Get ahead of it.

P.S.: there really is no Cyber Monday either — every day is Cyber Day.

Peter Charness
BrainTrust

Black Friday used to be a signal as to how the balance of the season was going to play out. I think the signal is a little harder to read, but I agree with others that the channels don’t matter, the hint is in total sales across all distribution points. And the single day has blurred to Black Something Week-or-two. So until all of November’s sales are read (and maybe some of this week as well) no one will really know.

On a related topic, did anyone think that some of the retailers were playing a bit fast and loose with the savings statement? Some of my favorite electronic retailers were quoting savings that frankly were based on some pretty interesting retail prices, and not their usual sales prices.

Shep Hyken
BrainTrust

This is just as I expected. More online sales and a little less foot traffic in the brick-and-mortar stores. Get used to it. Many customers are seeing the convenience of going online and having items shipped versus dealing with the crowds at the mall. Still, many like the idea of the in-store shopping experience. At least for the foreseeable future, the winners will have both an online and brick-and-mortar presence. As Terry Lundgren, Macy’s CEO, states: “The consumer likes that multi-dimensional experience … I think stores that are strong online, and strong in-store will be the winners of retail in the future.”

Doug Fleener
Guest

Black Friday weekend is becoming or maybe even has become irrelevant to the overall holiday business. Even the retailers who use to hype it are now spreading the business out over the entire month, and shifting much of the sales online. What matters is where the numbers fall by early January.

I will add that many of my clients’ Black Friday results were off by 30% or more, then turned around and had a terrific Saturday and Sunday that made up for the shortfall. I told them the same thing. What matters is where the numbers fall by early January.

Patricia Vekich Waldron
Guest
Patricia Vekich Waldron
1 year 8 months ago

Since retailers have been stocking and promoting holiday goods since Halloween, and consumers can shop anywhere, anytime on their devices, Black Friday (in-store) doorbusters are no longer a valid measure of the season to come.

The combination of ubiquitous access to shopping and “holiday creep” makes Black Friday store traffic a less-than-accurate indicator of season success.

Tony Orlando
BrainTrust

Online has chipped away a nice chunk of the craziness of Black Friday, and will continue to do so every year. For the retailers that have both online and physical stores, they can make money on both ends, and the labor savings inside the stores by hiring less help will be felt in the future. Leaner stores, that get into creative ways to sell by making their stores showcases for the holiday, can save money and still offer attractive deals to be shipped to their customers, without excess inventory on the floor and less labor to pay out. This in time will reduce the need for excess temporary employees, and add profit to the bottom line.

The changing retail environment is fast and furious, and for many retailers, it is time to make changes, or risk perishing. Consumers want deals, and many of them want it shipped free, and anything less these days in not going to fly.

Tom Martin
Guest
Tom Martin
1 year 8 months ago

Weak Black Friday traffic doesn’t spell trouble at all, because a single Black Friday is no longer a good indicator of retail sales. In fact, when all the numbers are tallied at the end of the buying season, the total likely will be up over the past few years. Customers want to shop and explore using all the avenues available, whether in-store, online, PC, or mobile. Savvy companies are giving customers the power to shop across any combination of those avenues. When some retailers — like REI with their #OptOutside campaign — even went so far as to close their doors for Black Friday, it became clear that the shift to a wider omni-channel availability and experience had truly arrived. Let’s face it, Black Friday is irrelevant; cyberEveryday is here. Now the rest of us have to get over it!

Craig Sundstrom
Guest

Holiday seasons come in two sizes: the “starts out great but fizzles” type and the “OMG! slow start that ends on an up note.” It appears that this will be the latter.

More concerning to me is that far — what, a decade? — into the era of online being a significant component, we still seem unable to come up with an aggregate number, and are left with excuses like “same store is down, but (that might be OK because) e-tail is up”…it’s the total that counts, and with “Big Data” on the ready, I would think we could at least master the small data practice of adding two numbers together.

Mark Burr
Guest
1 year 8 months ago
This is all fun, especially realizing that few will likely look back in February to see if we were right in November. I’ve seen nothing in any of the reports based on true numbers reported by any retailer and what is being reported is speculation and modeled guesses by limited information that makes nice literary banter. Doesn’t it? Sure it does! That’s why we’re here. Quite seriously, there is nothing in any of the reports that should be a “concern” of a retailer that has been watching the erosion over time along with technological advancement. Those that are concerned haven’t positioned themselves in the pattern of the emerging trends over time and are behind the game. Those that are moving as close to the pace of the trend in changing behavior are able to take advantage of the opportunities that consumers are giving those who can play in the trends. Amazingly, it is hard to get trampled, assaulted, or angered by the crowds, service and stock in your sweatpants on the couch clicking away online with as good of deals or better. No one should be surprised. If they are, they shouldn’t say so and look so out of touch. They’d… Read more »
gordon arnold
Guest
Many brick & mortar retailers rolled out the Christmas displays and merchandise one to three weeks before Halloween. In addition to the abandonment of any Thanksgiving sales there is the high likelihood of siphoning sales as a result of the soft kickoff (with both feet) prior to the traditional Black Friday start date. It is obvious from this early head count and a look at year to date figures that retailers are for the large part in for more bad news. We won’t know for sure until April 2016 what fiscal year 2015 did in total which by then will be too late for many more small and medium size businesses. It may be time for the retail executives to own as truth that large layoffs, sale event removal and three month sale events won’t bring back the good old days. The market management scheme that mandates success or removal might be in need of rethinking or refining. Adding the people and tools needed to get a clear understanding of why inventory, marketing events and people are or aren’t successful in the present day economy might be a good place to start. It is certainly more professional and less risky… Read more »
Frank Poole
Guest
1 year 8 months ago

A bit of a tangent, but more disconcerting is the devastating effect ship-from-store and BOPIS are having on B&M locations.

Whether it’s a lack of payroll to adequately staff stores, a lack of training, or simply a deadly lack of imagination of what might happen, the stores I’ve visited look like the aftermath of a tsunami, and the folks with whom I’ve spoken said that everyone’s more concerned about meeting SfS/BOPIS marks than maintaining a shoppable environment.

Naomi K. Shapiro
Guest
Naomi K. Shapiro
1 year 8 months ago

As many before me observed (rightly), the shift to a wider omni-channel availability and experience has truly arrived … Black Friday is irrelevant … cyberEveryday is here…. These trends been gaining strength for the past several years.

Don’t let it go unnoticed that retailer strategies and metrics are also changing, e.g. “300,000 Products Analyzed Suggest Fewer Promotions in 2015 Holiday Season” and “Analysis of Holiday Promotions Shows Retailers Moving Inventory More Efficiently and Continuing Sales Into the Post-Holiday Season.” Luxury Daily ran an article: “Retailers looking to move away from discounting for holidays: Report.” 

Arie Shpanya
Guest

I don’t think retailers should be too worried — unless they haven’t planned for the more spread out holiday shopping season. Most predictions for the holiday season are rather conservative, but retail winners will have multiple promotions to get shoppers in the door and onto their site.

A slower than hoped for Black Friday doesn’t have to spell disaster for the industry. Instead, it shows that online is more important than ever this year and shoppers aren’t as wooed by particular shopping days as they may have been in the past. Give them multiple times to save and the early birds and procrastinators alike will thank you.

wpDiscuz
Braintrust
"We won’t have a true picture of consumer spending in November until the month’s sales estimates come out. Until then, all estimates about consumers spending less are just guesses."
""Concerned" is a funny word in this case. Is the objective to sell merchandise or is the objective to sell merchandise in a store? If total Black Friday sales are up (all channels), isn’t that good?"
"First of all, you can now shop on Thanksgiving so all the first-in-line crazies are out of the way the next day. Second, online sales are so well promoted and so much less hassle, it’s only a matter of time before they REALLY eclipse the physical experience year-round.."

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