Are Black Friday results a sign of Christmas 2018 things to come?

Discussion
Photo: Walmart
Nov 26, 2018
Tom Ryan

While the shift to online selling continued, a number of other factors — including a recovery in lower-income household spending, an acceleration of in-store pickup and possible stabilizing of store traffic — may have provided a boost to sales over Black Friday weekend.

Among the early findings:

  • Online spending still booming: Adobe, which tracks transactions at 80 of the top 100 U.S. retailers, estimated online sales rose 23.6 percent on Black Friday over year-ago after climbing 28 percent on Thanksgiving. More online-specific deals are helping the gains.
  • Mobile influence increases: Adobe found 33.5 percent of online sales on Black Friday came from mobile devices, compared with 29.1 percent in 2017. Kohl’s reported 80 percent of its online traffic came from mobile devices on Thanksgiving.
  • Lower-income household boost: The Wall Street Journal’s Black Friday wrap focused on the likely benefit retailers are getting from increased spending from lower-income households due to lower gas prices and higher hourly wages. For the first time in a few years, middle and higher income households may spend at a lower rate this holiday in part due to the choppy stock market.
  • Foot traffic flattening?: RetailNext estimated traffic at U.S. stores fell between 5 percent and 9 percent during Thanksgiving and Black Friday compared to 2017. But a poll of 60 U.S. mall managers from real estate services provider JLL found the wide majority reporting flattish traffic. ShopperTrak found that traffic fell only one percent over the two-day period, improving from the 1.7 percent drop in 2017.
  • Holiday pick-up: Buy online, pickup in-store (BOPIS) orders were up 73 percent from Thursday to Friday, Adobe found. Target, Kohl’s and Walmart are among a number of retailers touting the option this year. About half of consumers expected to BOPIS this holiday season, according to NRF’s holiday survey.

Many reports underscored that planned promotions before and after the weekend have lessened the relevance of Black Friday. ShopperTrak predicted eight of the season’s 10 busiest in-person shopping days are still to come.

DISCUSSION QUESTIONS: What’s your take on the 2018 Black Friday results? Do you see any unusual factors driving revenues? Does Black Friday offer any insights into how the holiday season will play out?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Sales were up, with digital sales and digital connections into stores driving most of the growth. Is this because of retailers’ investments in omnichannel or in spite of them?"
"This was a difficult weekend to “read,” but most panelists have already observed that Black Friday “ain’t what it used to be.”"
"Black Friday results are not surprising; ecommerce is still in high growth mode with many retailers and brands expanding further into the omnichannel opportunity."

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26 Comments on "Are Black Friday results a sign of Christmas 2018 things to come?"


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Art Suriano
BrainTrust

I think overall we’re going to see a solid 2018 holiday sale season. As for Black Friday, it’s only natural that online sales are going to increase as retailers continue to offer opportunities to make that happen and one cannot beat the convenience of shopping online. Also, many retailers began their Black Friday promotions early which no doubt cut into some of the thunder of the day itself. The shopper today knows all the games. They know excellent sales opportunities versus the not-so-good ones, and they also know the longer they hold out until Christmas Day itself the better the deals will be. Moreover, if you can wait until the day after Christmas, you’ll save even more money. That said, we’re seeing a strong economy and high consumer confidence so regardless of what Black Friday itself showed, we’re bound to see a solid holiday season for retail both online and in-store.

Neil Saunders
BrainTrust

From our initial results, this was a very strong Black Friday with overall spending up by more than 5 percent. Online was the undoubted star of the show, with growth of around 33 percent over last year. More people than ever shopped online during Thanksgiving Day.

I do not believe the data that show such sharp declines in store traffic. Spending was modestly up in stores, though by nowhere near as much as online.

Comparatives with last year are now in more challenging territory, so a good Black Friday performance shows that retail is set for good holiday period even as prior year numbers become tougher to match.

That said, I think things will come down to earth with a bit of a bump come the new year.

Georganne Bender
BrainTrust

It was a madhouse out there this weekend, that’s for sure!

Neil Saunders
BrainTrust

We had a nice discussion about this on Twitter! Our data shows visits to stores were up over last year. The retailers and mall owners we have spoken to so far also say traffic was up modestly or, at least, flat. There’s something odd about the traffic numbers. Last year they also reported a downward trend but retailers like Walmart, Target and others all reported rising footfall and spend.

Mark Ryski
BrainTrust

I agree with your assessment Neil. The traffic stats cited by RetailNext and ShopperTrak are contradictory and questionable. Store traffic is an important, leading indicator of retail activity, however, this data is only useful if we understand how it’s being collected and how projectable it is. It seems that the media is quick to cite these pseudo market index results without a full understanding of how representative they actually are of true market conditions.

Brandon Rael
BrainTrust

Store traffic aside, the most encouraging part of how successful Black Friday was is that the conversion rates appear to be up as well. Store traffic remains a significant statistic to track, yet in our commerce-anytime, any-channel 24/7 world, the customer journey and the path to purchase is as dynamic and fluid as ever thanks to this.

Charles Dimov
BrainTrust

These are great results. I’m specifically impressed with the BOPIS orders being up 73 percent from Thursday to Friday. Given that only 27.5 percent of U.S. retailers actively offer BOPIS at the moment, this means retailer which already have it are reaping the greatest rewards!

When Black Friday plays out well, we can expect that the rest of the holiday season will come in strong as well.

Nikki Baird
BrainTrust

My local – and not low-end – mall was so busy on Friday, around lunch time, that we had to park at the defunct Sears outlet store across the street and walk in. Which makes me wonder if average traffic might’ve been flat, but traffic at specific places was out of control while others were empty.

But I think the overall take-away from the weekend is that sales were up, with digital sales and digital connections into stores driving most of the growth. For me, the question is, “Is this because of retailers’ investments in omnichannel and store experience and digital transformation – or is it in spite of them?”

My feeling is that the economy is good enough that retailers are benefitting, regardless of their progress towards digital transformation. But any retailer who looks at this holiday season and thinks “thank goodness all that disruption stuff is finally over” is making a big mistake.

Paula Rosenblum
BrainTrust

Small point, but ShopperTrak had traffic down 1 percent. I tend to believe them more, since I generally use their numbers and it’s like for like. I think lower traffic makes for bigger baskets.

Min-Jee Hwang
BrainTrust

This year’s holiday season will still be a strong one. Black Friday’s in-store traffic may seem down, but from my travels Thursday and Friday the lines outside malls felt massive. Most likely, traffic is down overall as people are losing interest in the crowds and rush of the traditional Black Friday experience. Online deals are too good, and too convenient, for many to pass up.

Brandon Rael
BrainTrust
Black Friday has been outstanding, and it’s very encouraging to hear the positive news. Overall we are experiencing a bump in retail sales, both in-store and online or a combination of the two due to an increased consumer confidence thanks to some positive economic indicators. However, the Black Friday event as a single day phenomenon is evolving as consumers enjoy the experience from shopping on a mobile device rather than fighting all the crowds and chaos in the stores. Perhaps Cyber Monday will not have the significance it used to. With that said, we should expect the momentum to continue throughout the holiday shopping seasons. Retailers have responded, and their more curated experiential-focused stores will draw plenty of traffic over the next few weeks. Additionally, the omnichannel BOPIS offering is a key differentiator to draw customers to your stores, where incremental purchases and full price sales could happen. Going into December, we should expect retailers that have made the necessary strategic changes to benefit by offering the consumers a very fluid mobile/digital-first way to shop… Read more »
Michael La Kier
BrainTrust

The holiday season is off to a great start. But despite the rosy picture painted by the strong numbers above, issues lurk below. There were multiple reports of stores that were less than crowded (or even empty in my personal experience) on Black Friday. Further, shoppers encountered disabled or crashing websites (including Walmart, Lowe’s, J.Crew, Lululemon, Gamestop, and Hollister to name a few) as the holiday shopping season kicked off. Black Friday 2018 may be the shift towards online and mobile shopping-first — after all, you can cover a lot more sales on your phone than by foot.

Harley Feldman
BrainTrust

Pre-Black Friday offers, the ability to order online 24 hours a day and being able to pick up in-store options drove Black Friday sales. Even though shoppers purchased early, the excitement of shopping on Thanksgiving or the day after still exists for the prepared shopper. One factor driving revenues is that almost every website that sells anything offered Black Friday specials (and Cyber Monday) reinforcing the excitement to purchase something. Black Friday sets a trend for the holiday season — high Black Friday sales should bode well for the remaining holiday sales.

Mohamed Amer
BrainTrust

Online comps are now hitting the 30 percent range for milestone days, this tells me we’re still early in the shift to digital shopping experiences. Combined with the steady flow of store traffic and the increasing hybridization of online/offline retailing, I expect consumer spending to continue its rise making the 2018 holiday season one of the better ones in years.

Locally the shopping malls, parking lots, and traffic around major shopping destinations over this period were as busy as ever — a very healthy picture for the 2018 holiday season. BOPIS is a huge hit and I found many examples of retailers offering incentives to pick up in store (while still reducing COGS). There are more opportunities ahead to integrate online and offline retailing and deliver personalized predictive and intelligent offers based on individual consumer behavior and preferences.

Cynthia Holcomb
BrainTrust
Sales may be up, but the digital shopping experience has miles to go to before it is easy and seamless. Personally, I was exhausted and gave up on Black Friday. Using specification filters and clicking through on banner prompts for great deals lead to the same place most times. Shopping for shoes, clothes or handbags, forget it. When I logged into Amazon, recommended for me were doormats, braces for door wells, and a bunch of things I have never even shopped for on Amazon. Shopping Nike shoes on Amazon lead to way too many redundant recommendations and out-of-stock third-party sellers. The Nike offerings seemed like “private label” by Nike for Amazon when double checking against Nike.com. Try shopping for a handbag on Amazon. Forget it! No filters! Just “Recommended for You!” Awful handbags, but “Sponsored!” Shopping Nordstrom, Macy’s, The Rack, Neimans, Saks, Off 5th, Final Call, etc. lead to specification-driven/collaborative filtered lackluster results. Then dynamic pricing came into effect! By that time with no purchases I quit! Today is Cyber Monday, we will see how… Read more »
Bill Friend
Guest

Black Friday is no longer just about the day and in-store sales. It’s about overall results and the ability to create an image across platforms that is attractive to the shopper. While overall foot traffic might be down (I’m not sure I believe this) I bet foot traffic was up if you remove older C and D grade malls. Also, the BOPIS numbers are impressive despite it still being early in the adoption cycle for many retailers.

Jeff Sward
Guest

This Black Friday/Cyber Monday is a perfect storm for retailing. The confluence of frantic hype and crazy pricing all within a strong economy. It’s not tough to predict a good holiday season. I think the real read comes later when we can see the combination of sales growth/decline coupled with margin growth/decline. Which retailers managed both sales AND margin? Which retailers managed both brick-and-mortar AND e-commerce? Which retailers can execute for both peak sales volume AND offer some kind of experience in the process? Which retailers will maximize pre-Christmas sales AND execute optimum seasonal conversion post-Christmas? Lots of lessons yet to be learned from this holiday season.

Ananda Chakravarty
BrainTrust
When all the forecasts seem to be aligned, and there are no outliers, it’s hard to support a contradictory idea. However, there are a few things that can put a damper on the season – but low chances. Some unusual factors: An early start also means depleted consumer funds. Retailers have been pushing earlier and earlier each year and this translates into potential challenges for retailers later in the season. Worker management has been hectic, clearly with more employment. According to the BLS, November will have the highest number of temp workers employed in any month since 2008. Discounting remains high — and retailers that manage this poorly not only will see profit misses, but also competition eating their lunch. Online continues its trend, but mobile is an interesting growth play that is showing its hand and smart retailers are already on board. Travel is high — over 50.9 million Thanksgiving travelers over 50 miles or more — mapping to AAA’s prediction of the highest Thanksgiving travel since 2005 — means more business for C-stores,… Read more »
Dick Seesel
BrainTrust

This was a difficult weekend to “read,” but most panelists have already observed that Black Friday “ain’t what it used to be.” Between extended doorbuster hours, omnichannel shopping and early promotion of Black Friday pricing, there just isn’t the same urgency around Thursday night and Friday morning.

That being said, the overall signs of a good holiday season are there — especially among the survivors. (Market share from stores like Sears, Toys “R” Us and Bon Ton has to go somewhere, and not all of it is being captured online.) While higher-end shoppers may feel the pinch from their IRAs and tax estimates, lower-to-middle income consumers are seeing improvement in hourly wages and lower gas prices. Both of these tailwinds will drive sales in the weeks ahead.

Ralph Jacobson
BrainTrust

With the natural migration toward online shopping and gift certificates, I believe these finding are not surprising and will continue to proceed in this direction for at least the next few holiday seasons. The economy in the U.S. is strong, so shopping will be at a brisk pace, and online purchases will become even more dominant.

Lee Peterson
BrainTrust

Seems consistent with trend lines: store traffic down, e-com and BOPIS up and overall smiley faces all around. I’m still not in favor of opening on T-Day as it only serves to flatten out what was once Black Friday, but people seem (operative term) to enjoy shopping that day in store and otherwise, so here’s to them!

Looks like a good holiday coming up. Appreciate it while you can.

David Naumann
BrainTrust

There is nothing too surprising about the Black Friday results, as it aligns with economic and shopping trends. With a strong economy, minus the stock market, of low unemployment and reasonable gas prices, consumers are likely to spend more this holiday season. And the continued increases in online and mobile shopping is consistent what we have seen over the past few years. Looks like it will be a good holiday season for retailers.

Liz Adamson
BrainTrust

2018 will be a solid holiday season for many reasons including a strong economy and consumer confidence as well as a plethora of holiday sales, both online and at brick and mortar. Black Friday results are not surprising; ecommerce is still in high growth mode with many retailers and brands expanding further into the omnichannel opportunity.

Shep Hyken
BrainTrust

The results aren’t surprising. Retailers are smarter. They are seeing the trends (for a number of years now) impacting all channels and are learning how to balance out the online versus onsite. Furthermore, the old saying goes: “The rising tide lifts all boats.” In this case, the rising tide is the economy. We’ve enjoyed a good economy with low unemployment. This is a major contributor to the increase in sales this year.

John Ghiorso
Guest
22 days 58 minutes ago

Our clients on Amazon are expecting a stronger holiday sale season compared to last year. This weekend’s sales and early indications from today’s Cyber Monday numbers are matching their expectations for their online and Amazon sales. On Amazon, advertising played a bigger factor than previous years in driving increased revenue. We expect this continue throughout the holiday season and increase even more in following years.

Rob Taylor
Guest
20 days 23 hours ago

Convey clients saw a record number of shipments being created during the 2018 Thanksgiving weekend. In fact, the growth in shipments year over year has vastly outpaced reported growth in sales. This reflects a trend towards more discrete packages in response to consumer demands for greater assortment and speedy delivery fulfilled through drop shippers and forward stocking locations. Will customers appreciate the speedy shipping options or will there be backlash due to the increased environmental impact related to packaging and transportation?

Perhaps the most interesting finding this year was the dramatic increase for less-than-truckload shipments. As consumers have become more comfortable making large item purchases online it’s clear they are taking advantage of holiday specials to order big-ticket items for themselves.

It will be interesting to look at how the increase in shipments ultimately impacts margins given that many retailers were offering free shipping deals in addition to heavy product discounts.

wpDiscuz
Braintrust
"Sales were up, with digital sales and digital connections into stores driving most of the growth. Is this because of retailers’ investments in omnichannel or in spite of them?"
"This was a difficult weekend to “read,” but most panelists have already observed that Black Friday “ain’t what it used to be.”"
"Black Friday results are not surprising; ecommerce is still in high growth mode with many retailers and brands expanding further into the omnichannel opportunity."

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