Black Friday Weekend Shatters Sales Records
Apparently, all the early hours, freebies and hyped promotions offset any consumer concerns about the economy this past weekend. According to a National Retail Federation survey over the weekend, traffic and spending were up both online and in stores, reaching historic highs.
According to the survey of 3,826 consumers from Nov. 24 to Nov. 26 conducted by BIGresearch:
- A record 226 million shoppers visited stores and websites over Black Friday weekend, up from 212 million last year;
- The average holiday shopper spent $398.62, up from $365.34 last year. Total spending reached an estimated $52.4 billion;
- Shoppers spent an average of $150.53 on the web, representing 37.8 percent of their total weekend spending.
“More consumers than ever turned out for retailers’ Black Friday promotions, a promising sign for the economic recovery,” said NRF President and CEO Matthew Shay in a statement.
The move to add extra hours — including some stores opening on Thanksgiving Day and others pulling back Black Friday opening time to midnight — appears to have worked. The survey found 28.7 million people shopped online and at stores on Thanksgiving Day, up from 22.2 million last year. On Black Friday, 86.3 million more shopped online and in stores. Nearly one-quarter (24.4 percent) of Black Friday shoppers were at the stores by midnight on Black Friday or visited retailers who opened on Thanksgiving evening for Black Friday deals. By comparison, the number of people who were at the stores at midnight was 9.5 percent in 2010 and 3.3 percent in 2009.
“The appetite for these early openings is only getting stronger among holiday shoppers,” said Phil Rist, executive vice president at BIGresearch. He nonetheless said retailers will “have to stick to an aggressive holiday promotion schedule to keep consumers interested.”
The promising holiday start was largely echoed by other reports:
- ShopperTrak reported Black Friday sales increased 6.6 percent, the largest year-over-year gain for its survey since the 8.3 percent increase seen between 2007 and 2006;
- ComScore found online spending on Black Friday grew 26 percent. Sales on Thanksgiving Day grew 18 percent;
- The NPD Group’s Second Annual Anatomy of Black Friday and Cyber Monday Study found that consumers spent an average of $223 on Black Friday, up from $205 last year.
NPD reported that while record numbers took advantage of the deals on Black Friday, traffic slowed over the weekend and survey responses continued to point to a cautious consumer. Said Marshal Cohen, chief industry analyst, NPD, in a statement, “This year credit is tight, cash is limited and the promise of better times ahead is being held at bay and that all adds up to a less enthusiastic consumer.”
- Black Friday Weekend Shines as Shoppers Line up for Deals, Spend Record $52 Billion – National Retail Federation
- Black Friday 2011 Sets New Retail Sales Record – ShopperTrak
- Black Friday Boasts $816 Million in U.S. Online Holiday Spending, Up 26 Percent vs. Year Ago – comScore
- They Came With A Purpose – The NPD Group
- Black Friday Retail Winners: The Early Birds – street.com
Discussion Questions
Discussion Questions: What’s your assessment of the results from the Black Friday weekend? What does it portend for holiday shopping and what should it mean for how retailers approach the remainder of the holiday selling period?
This is nothing but great news. Coupled with the wildly successful AMEX Small Biz Saturday promotion, everyone in retail should be rejoicing, not “yeah, butting” their way towards fear. The mindset of a happy holiday is closer to a reality this morning.
Was it the early hours or the deals? Consumers are hurting financially and they showed retailers that they will go out of their way to take advantage of deeply discounted deal. I doubt they will turn out in force for regular items at full-price.
An increase in Black Friday traffic in no way substantiates positive consumer sentiment or improved spending patterns in general. In fact, it could indicate just the opposite — that more consumers felt compelled to chase discounts this year out of necessity. Riots over two dollar waffle irons can’t bode very well for general economic conditions.
Also, there has not been any traditional correlation between Black Friday performance and overall holiday spending.
Black Friday has become nothing more than a side-show. What will ultimately save a retailers life is what they do the other 364 days of the year.
I think the Black Friday numbers portend a really good season, without caveat. But, the pundits and the media will continue to insist that the holidays are going to be a challenge for retailers in this uncertain economy. It’s what’s in the play book and the headlines will continue to wail ‘yeah, but’ no matter how good things are going until Santa has come and gone.
The conversation will then turn to ‘yeah but’ in January and declare the consumer DOA from the holiday spending frenzy. Some things never change and downbeat holiday forecasting is one of them.
Until stores report comp sales this Thursday, we have an incomplete picture of winners and losers. However, it’s clear from the early evidence that consumers spent robustly over the weekend. Whether driven by early hours, doorbusters, “Small Business Saturday” or other marketing angles, customers were motivated to spend. (And slower traffic over the weekend vs. Friday should not come as a surprise to NPD or anyone else.) This is consistent with the narrative throughout 2011…consumer sentiment is persistently negative but actual spending behavior is less cautious.
Seen as strictly an economy morale booster, the 2011 Black Friday was great to see. In terms of how “black” this event turned the ink for retailers and manufacturers, the jury is still out. Giveaways and deep discounts do not always mean good results.
The main question to be answered going forward is whether consumers will be back to extend the holiday sales period and make this a good year? If consumers slow down over the next couple of weeks will retailers have to drop prices or promote more to keep up the momentum? It’s a good start; let’s hope it continues.
As in the past, I’ll repeat that anything above zero is good. It’s good. Does it indicate anything towards the remaining holiday selling period? No.
Was the price paid by retailers too high for the results? Yes. The price, however, wasn’t paid in lost margin or high markdowns to drive the results. The price paid was much higher.
We talk often here about ‘social responsibility’. We talk here often about how wonderful the latest new ‘green’ program is for everyone. We talk also about how wonderful the latest ‘pink’ or charitable program launched is for a retailer’s image. Certainly, the retailers aren’t to blame for all of the consumer misbehavior this past weekend, are they? They were doing what they had to do to be competitive, right? I’m sorry, but it’s a two way street.
Many retailers, and we know who they are, showed no sense of any social responsibility this past weekend. None. If this is the price we pay as a group (retailers) to achieve the all important shattered record, it was far too high. Far too high.
So, sure, the number of somewhere between 6-7% is good. The price, however, was far too high. The barn door is now open. It can’t be closed. Or, can it?
Using a Styrofoam cup is a sin. Trampling a child for a sales increase over last year apparently is not. Can we as a group (retailers) look back over this weekend and say something really great happened? What we saw is only the beginning. The future doesn’t look bright if the indication of what occurred is a success. That being the case, we can expect more extremes and even less responsibility. But, then again, that only applies to certain categories, right?
Yeah, but Black Friday appears to be nothing more than a Groupon-style promotion on a larger scale. Stores are doing loss lead promotions to bribe customers to fight for scraps.
But Friday and Saturday afternoon, these same stores are empty with little foot traffic and no wait checkout lines. Have retailers conditioned the consumer to wait only for Black Friday and December 26th to come out in droves?
I have to say I’m happily surprised about these sales figures. It would be interesting to see how online evolved compare to last year. Since shoppers don’t seem to care about the Euro zone and the debt crisis, retailers will undoubtedly meet and exceed targets through the end of the year.
I would trust NPD’s numbers over NRF’s. But anyone who shopped on Friday saw huge crowds, frustrated drivers hunting for parking in shopping center lots, shoppers with big bags, and great deals. There’s just no question that the economy is coming back.
Even at the cost of some casualties, Black Friday seems a success; the numbers are very good. However, one message from these numbers that should not be forgotten in all the euphoria relative to recovery is that the response to the deals still means price is king for consumers who continue to be cash strapped. In addition, public news media hyped Black Friday to almost manic degree, and my belief is that that factor helped boost the numbers.
Pent up demand and conservative approach to spending over past several years portends a consistent demand this holiday season. I made my annual pilgrimage to Michigan Avenue on Friday and it felt like the shackles were lifted from everyone’s wallet/purse. The special discount pricing until 10am or 1pm (depending on the retailer) was “lifted” and extended at many stores to keep the traffic flowing and encourage conversion. Nothing too “amazing” in so far as merchandise featured in apparel stores; the fragrance category was dull at best. Specialty stores had solid price/value offerings. As always the countdown to the 25th will push retailers to the 40, then 50, then 60/70% off as is usual. Metrics shared regarding online spend are encouraging — online-only deals and convenience. New twist to offer a special discount for online buyers who pick up in-store. Nice move to attempt to acquire new online buyers. Today is Cyber Monday…let your fingers do the shopping!
This was a good start to the holiday retail season, but the truth will come over the next 30 days…if there are not enough sales to support the fast start, we will see a dismal holiday. Much of this is a psychological mind-set, which pumps the consumer to spend more.
Call me a Grinch, (many do), but I’m sure I could break records selling $10 bills for $7.
With all the marketing and early hours, the customer showed up. The real indicator will be the comparable sales numbers for this week and next. If they are down significantly from YAG, all that’s happened is that business was pulled forward at a greatly reduced gross, much less net, margin. $10 bills for $7.
It’s what’s left over when the smoke clears that matters.
It was a great way to start the holiday buying season. The only problem is that it is going to be down hill from here on out.
The recession from a few years ago is well over and our economy is exploding again. Good retailers continue to do well. By noon on Friday most stores were dead that I went to. So I expect sales to drop off but still be as strong as ever.
After the smoke, the mace, and the fights in the stores cleared, we have to really look at the bottom line. In my business, it is crystal clear what the future is, and it ain’t pretty. Thanksgiving week in the supermarket business is just like Black Friday, as many stores lost a fortune on frozen turkeys like they do every year. Most other high demand items were sold at cost or below to entice shoppers to buy their entire order in that store, but it is just not the case. Consumers are very deal oriented to shop multiple stores to get the price they want on all basic commodities today, and that will not change. We have conditioned them to wait for the giveaways, and wonder why our bottom lines are the lowest of any industry.
The challenge for small independents is how to make your store the Go-To place for high profit items, and this is where anyone can shine with putting quality goods (deli-bakery, and meat) specialties out at the holidays. Sampling does work, and it is a must for survival of anyone in this business. Let the shoppers have their way on Black Friday, and focus on Black Wednesday in our stores to sell all the goodies they really want for their dinner.
I hope everyone enjoyed Thanksgiving with their families!
That’s nice. What does it portend? Nothing, since you can extrapolate a point any way you want (and a non-comparable point as well). Whether the headlines on December 26 read “Christmas to Remember as Sales Hit Record Highs” or ” What Went Wrong? Retailers Struggle to Understand How Black Friday Magic Fizzled,” only time will tell.
Our Black Friday sale was 10% off store-wide and we beat last year. We’re happy with that! But Small Business Saturday was a dud. I won’t be expending any special effort next year promoting this non-event.
As far as the big picture, I side with the cynics who point out that selling product at or below cost is not a business model which works for small business. Public companies and venture capital supported companies can lose money until they’re blue in the face. They can just sell the company or reorganize under bankruptcy and let the investors take the hit.
And a pet peeve — customer who thrusts his cell phone in my face displaying an online price $50 below my price. I try to be knowledgeable about online pricing, but how can I stay up to the minute on the 5,000 items in my store? Is there an app for that?
My wife and I decided to buy ourselves a new TV for the holidays. We went to Best Buy on Wednesday night just to get a sampling of prices and models. There were people already camped out 27 hours before the Black Friday opening. They said they were there since early Wednesday morning. I find this incredible that people will do this. Granted the bargains were good. But to have to give up the holiday for it? I am not that sold.
Yet I read all the statistics and see where this was a sales busting day for retailers. I now think it had to be good for those early shoppers as well. Just not something for me.
Great start. However…
The consumers’ wallets have not suddenly grown larger, and the amount that they will pull out for the overall Holiday Shopping Season is still likely to come out in the +2.6% – +2.9% range on a year-over-year basis — sticking with the BIGinsight forecast for the season.
If the consumer is planning on picking up a “sweater for Uncle Ned for $50, and found one for $30 on Black Friday,” she’s not going to buy another one for Uncle Ned.
Retailers that worked this past weekend effectively, will pick up market share (added hours and discounted items), and they will likely be ones that pull added shoppers through the turnstyles over the next 27 days. Some of their competitive cousins will have smaller topline sales — but perhaps a sharper bottom line.
Look for added promotional fanfare, and an increasing number of consumers shopping online over the next couple of weeks.
Black Friday data pulled from our RQ4 retail management solution for wireless retailers showed a similar result: People spending more per transaction this year than last year. Our data also indicated the increase in spending is attributable to consumers purchasing more expensive phones this year.