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Online wins the Black Friday weekend again
Not surprisingly, online sales by all projections grew sharply over Black Friday weekend while in-store purchases declined vs. the year-ago period. The encore performance appears to show that while investments are being made in physical stores, the e-commerce experience is improving at a faster rate.
Among the findings:
- Online spending over Thanksgiving and Black Friday grew nearly 18 percent vs. last year, according to Adobe;
- RetailNext found in-store sales dipped 10.4 percent on Black Friday as compared to the same day last year, while traffic dropped 10.6 percent;
- The National Retail Federation reported 43.8 percent of consumers shopped online during the four-day Black Friday weekend, up 4.2 percent vs. the same time span last year, while 40 percent shopped in-store, down 3.7 percent. Last year was the first year online outpaced offline over the weekend.
Online’s improving performance could be traced to greater comfort with online shopping, improved shipping speeds, and the desire to avoid the negatives of in-store holiday shopping (crowds, traffic, out-of-stocks, etc.).
Amazon.com, which again stepped up its holiday push, said orders were stronger on this year’s Black Friday than last. But competitors are raising their game.
Exploring the toy category, Boomerang Commerce found Walmart had more than doubled its online product assortment between Q1 and Q3 2016 and priced 55 percent of its popular toys at the same or lower price than Amazon. Toys “R” Us also increased assortments as well as exclusives, while Target focused on special pricing promotions.
Meanwhile, with people traveling and taking to second-screen viewing while watching football games, mobile shopping is taking off. Mobile phones accounted for 55 percent of website traffic on Black Friday and 36 percent of sales, according to Adobe.
Shelley Kohan, RetailNext’s VP retail consulting, told USA Today, “I think going forward, mobile shopping will become more relevant because it’s more convenient, it’s easier, and Millennials, who have the largest shopping power out there, are very comfortable shopping with their mobile devices.’’
Overall, combined online and store sales are projected to have declined again over the weekend vs. last year due to deals arriving well before the weekend and shoppers holding out for better deals.
- Thanksgiving Weekend 2016 – National Retail Federation
- Amazon’s Lead Narrows, Says Annual Boomerang Commerce Report on Holiday Pricing and Assortment of Toys and Games – Boomerang Commerce
- Holiday Shoppers Are Making More Purchases Online – The Wall Street Journal
- Online sales overshadow stores in 4-day shopping frenzy – USA Today
- U.S. shoppers spend less over holiday weekend amid discounting – Reuters
- Adobe Data Shows Black Friday Breaks Online Sales Record With $3.34 Billion – Adobe news release
Discussion Questions
DISCUSSION QUESTIONS: What new factors appear to be driving online’s expanding appeal over the holidays? Did you notice any other new or unusual shopping trends over the weekend?
Poll
BrainTrust
Lee Peterson
EVP Thought Leadership, Marketing, WD Partners
Michael Day
Retail Industry Executive, Genesys
While mall traffic seemed a bit more robust on Friday, this could be the result of malls deciding to close on Thanksgiving (even if some of their mall anchors like Macy’s were open). Otherwise the trend toward online shopping doesn’t look like a big surprise, especially with the early availability of so-called Black Friday doorbusters. It’s past time to try measuring online vs. in-store sales, especially for omnichannel retailers — the real issue is whether total retail spending rose or fell this weekend and which product categories are driving the bigger increases. The silos (e-commerce vs. brick-and-mortar) just aren’t relevant anymore.
In a sense the migration from brick-and-mortar to e-commerce is as profound as the shift from “downtown” shopping to suburban malls and strip centers that began in the late 1950s and accelerated in the following decade. It’s another step in the long evolution of consumer choice, empowerment and convenience — which arguably began with the development of department stores in central business districts in the first place.
Not so fast. Returns are important to online shoppers. A ComScore study found that 60 percent of customers read a company’s return policy and 80 percent are influenced to buy or not based on what they find.
Maybe that’s why apparel returns, in particular, run between 25 percent and 50 percent. Maybe that’s why buy-online-pickup-in-store (BOPIS) is yielding 30 percent to 40 percent of non-pickups.
With 71 percent of buyers shopping online because they want to get a better deal, they only bought items based on price …
While an increase in mobile is inevitable, without the return figures running four to 10 times what they are in a store, adoption is only half the story.
At this point, I think the continued growth of online shopping is due less to specific innovation and more to the increasing velocity of this rolling snowball. The more people shop online, the more comfortable they get doing so and the more they will do so moving forward. Consumers are increasingly familiar with the navigation and overall UX/UI of the websites they frequent, plus these websites routinely offer features like saved history, favorites lists and more which simplify shopping for regular users. The online shopping snowball is rolling and unlikely to slow down anytime soon.
The same factors are driving more people to shop online, it’s just taken quite a while for the light bulb to go off in the center of the bell curve. But it’s DEFINITELY going on now! A friend of mine compared online shopping with single malt scotch: once you taste it, you’re not going back to the junk you used to drink!
For online it’s still more convenience, better service, easy returns and more options that are moving the needle. And like the scotch example, the more you do it, the less you want to get in your car, park, etc. — all the ’90s stuff you used to do. Now you have more time for things you want to do, like hang out with the kids. Maybe. 🙂
The whole premise of Cyber Monday is that people don’t have computers at home and wait to get into the office on Monday to take advantage of computer-accessible deals. In 2016, the only reason we talk about Black Friday and Cyber Monday is the extreme promotions promoted by retailers. The challenge for the industry is to rise above discounting and enter a new era of customer intelligence and engagement.
Retailers are becoming significantly better at online retailing and consumers are increasingly comfortable and capable of shopping online — it should be no surprise that online sales continue to grow rapidly. With so many more ways to buy, it seems like consumers are less frenzied and manic than in past years. Standing in line outside of a store for hours before it opens doesn’t make for a great shopping experience.
Sure, improved online performance, increased comfort levels shopping online, etc. All those things listed above directly contributed to driving online’s expanding appeal during the holidays.
And yes, that “Millennial Factor,” played a role. Retailers are upping their game with evolving digital and data-driven “Millennial Strategies.” Millennials are 80 million strong with a projected $7 trillion in lifetime buying power … With each passing year the Millennial generation becomes that much more workforce-integrated with increasing disposable income spend and buying power, etc.
Several things come to mind here. One is that anyone who acts surprised about the increase in online and mobile shopping this season probably just awoke from a 40-year nap. Another is the decreasing importance of Thursday, Friday, Monday or any other day as a trigger for shopping behavior. As Cathy reminds us, the “cyber” in Cyber Monday refers to our past use of office computers to place shopping orders — now entirely irrelevant in the mobile era.
For retail marketers, Black Friday can still be a useful slogan, but it really depends on the slice of market they are appealing to. This weekend we had some discounters opening their doors before the turkey dinners were digested and other chains who stayed closed all day and bragged that it was out of respect for their employees’ and customers’ family priorities.
Vive la différence! Maybe the industry is reconsidering some of its former knee-jerk holiday tactics in favor of what fits the needs of customers.
Physical option-only retailers, despite the hype of their bargains over the weekend, need to realize it’s game over if that’s the only channel they embrace. This growth in online, for all of the reasons noted, is not going to abate anytime soon. For brick-and-mortar retailers to survive they need to be thinking omnichannel and remembering it’s about customers, not channels.
These retailers need to understand that online is a significant disrupter of retailing as it has existed for the last 100 years. Like the cat that tasted fresh tuna, we are not going back to the canned version.
The new trend is the old trend, which is convenience and time saved. Having to fight the crowds is why I never ever participated in the mess in the first place. Did you all see what happened to the Nike Outlet Store on Friday? It was torn to shreds by the customers. It looked like the aftermath of an earthquake, and this is what is sad about us as consumers. Who wants to deal with this stuff? Not me, and even my two sons go online for stuff, avoiding the madness that is no fun anymore. The turning back of the good old days is gone and we will see more retailers failing, especially small businesses, as the newer generation will spend the bulk of their income online and not in the local stores.
It has become a shopper’s world and price alone cannot be very many retailers’ strategy for success. There HAVE to be compelling reasons for customers to shop your website and come back to your website in the future. Seamless e-commerce websites, painless fulfillment and attractive pricing are just the table stakes at this point.
We have to rethink what drives loyalty. What draws shoppers back to the largest e-commerce sites? What are the key factors that keep people from coming into the physical stores? I think the Black Friday phenomenon will continue as long as retailers promote it. If the merchant provides great pricing, the shoppers will take advantage. It’s not much more complicated than that. However, if you want to also drive true loyalty AND generate the most margin, then you have to investigate some of the newest tools available to leverage external structured and unstructured data to find exactly what is driving your target audience. Personalization is critical in the shopper journey and being able to literally “see” this typically “dark” data will help differentiate your offers from the competition.
No new factors that I saw. Just the same inevitable trends. Retailers want customers to come to stores because they want the opportunity to sell to them more once they get there. Thus doorbusters and early (or late on Thanksgiving) holiday hours. But consumers have changed their shopping behaviors — they cherry pick the deals and meanwhile capture other deals on their mobile phones while they’re in a competitor’s store. Thus traffic is down, online is up and mobile is also up. No mystery there!
Last year I spent all of Thanksgiving evening at the mall … 6 p.m. to midnight. Call it professional curiosity — I just had to take it all in. I did at least six laps of the mall just trying to gauge the level of activity in different stores. Around 10 p.m., something interesting happened. The average age of the shoppers seemed to drop by half. Shopping bags were less prominent. A couple of store managers explained that the adults and serious shoppers had retired for the evening and now it was a social event for the “kids.”
This year I started getting Black Friday emails a full 10 days out. Black November was in motion. I haven’t seen any statistics measuring how much Black Friday sales volume was pulled forward. I don’t think it’s just a left pocket/right pocket shift over the weekend. This year I stayed home. Why, WHY would a sane, rational individual venture to the mall Thanksgiving evening with all the other shopping channels available? I understand that it can be a fun social event for some people, but for pure (price-driven) shopping it’s tough to beat the technology available. Otherwise, the trip to the mall has to provide some kind of non-price-driven experience.
Product selection is also driving online shopping. The endless aisle of sizes and options are an increasing appeal to shoppers, which serves retailers that are improving their omnichannel strategy while improving their brand positioning.
Smart phone penetration is now over 80%. Agree the 18% increase in online spending is more about behavior shift than tech innovation. More digital natives are parents and homeowners. More boomers are comfortable with online security. Both have more smart phones.
One trend I saw that was new was the abundance of specialty retailers that put the entire store on sale at 40 – 60% off. Seems lazy, inevitable and deadly.
I was impressed that Macy’s 1) simplified its promotion activity and 2) enabled its POS computers to understand the value of promotion to shopper. Both made transacting in Macy’s much easier. That and the lack of store traffic.
(Why is the parade still a thing?)
In my BF shopping (started at 6A @THD and roamed from there), I echo all the reports that traffic was way down. In part due to Thursday crazed shopping and shopper promo fatigue.
Here’s an “aha!” Associates in all stores were beat up and weary. On BF in all stores visited, front liners said it wasn’t that busy. A Dick’s at 3PM said, it was busiest of the day. On Thursday, the store was open from 5 to 2AM. I think operating hours and staffing needs some help to ensure a more positive shopping experience for all.
As my UPS driver says, “retail ain’t for sissies!”
It would be interesting to know the cost of Walmart’s and Toys “R” Us’s assortment expansion efforts. We know the cost of Amazon’s assortment expansion: it is zero thanks to the Marketplace model. Third party sellers create an endless aisle and add to the convenience of online shopping, while allowing Amazon to take a purely profitable commission. Can Walmart and Toys “R” Us say that their assortment expansion efforts deliver the same profit margin?