Monday Morning Quarterbacking Black Friday

Discussion
Nov 29, 2010
Tom Ryan

By Tom Ryan

With doorbuster deals aplenty and seemingly 24-hour shopping options,
Black Friday 2010 delivered on the hoopla and, apparently, the revenues for
the retail industry.

According to the National Retail Federation (NRF), about 212
million shoppers visited a store or a website over Black Friday weekend, an
increase of 8.7 percent over last year. The average shopper spent $365.34,
up 6.4 percent, according to a survey of 4,300 consumers conducted by BIGresearch.

“It’s certainly encouraging to see an increase in traffic and
sales from the four-day holiday weekend, however, consumers still have concerns
about the economy, jobs, and paying down debt,” said Phil Rist, EVP,
BIGresearch, in a statement. “It was the consumers’ search for
deals and bargains that drove the weekend traffic rather than their confidence
in the economy.”

ShopperTrak said Black Friday sales figures for brick ‘n mortar
stores increased 0.3 percent with traffic ahead 2.2 percent. But the retail
traffic monitor maintained its forecast for a 3.2 percent increase in sales
this holiday season. It noted that the muted Black Friday results partly came
because figures for the first two weeks of November were unexpectedly strong
— rising about six percent year over year.

“Additionally, a percentage of retailers concentrated on pushing folks
to their websites with various online-only sales, which most likely influenced
Black Friday performance as well,” ShopperTrak founder Bill Martin said
in a statement.

Among some trends spotted over Black Friday weekend:

More discretionary
spending:
The NRF survey found that shoppers are
in the mood to purchase more discretionary gifts this year. The number of people
who purchased jewelry over the weekend rose 14.3 percent, up from 11.7 percent
last year. More people purchased gift cards, toys and books and electronic
entertainment than a year ago.

Crazy hours: Sears, Kmart, Walmart, Toys “R” Us, Bass
Pro and several other stores opened some or all of their stores on Thanksgiving
in what members of the media entitled “Gray Thursday” or “Black
Thursday.” Many stores also pulled back their opening hours on Black Friday
to midnight.

Small Business Saturday: While the commercial success is unknown, the “Small
Business Saturday” promotion organized by American Express received a
bevy of media attention concerning the plight of independents — albeit not
as much as the coverage given to Black Friday doorbusters.

Value over deep-discounts: According to the NRF survey, both department
stores (52 percent this year vs. 49.4 percent last year) and clothing stores
(24.4 percent vs. 22.9 percent) saw healthy increases in traffic, while the
percentage of people who shopped at discounters declined 7.2 percent, from
43.2 percent in 2009 to 40.3 percent this year.

Online boom: According to Coremetrics, based on data from the sites
of more than 500 U.S. retailers, online sales were up 15.9 percent on Black
Friday, with the average order value rising about $20, from $170.19 to $190.80.

RetailWire also went out and about to do some unscientific tracking
of Black Friday traffic at malls in Florida and New Jersey. See more images
posted
on the RetailWire Facebook page.

Discussion Questions: Did Black Friday weekend set the stage for healthy holiday
spending? What, if anything, do you think is different about how retailers and
consumers are approaching the holiday season this year?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

28 Comments on "Monday Morning Quarterbacking Black Friday"


Sort by:   newest | oldest | most voted
Ryan Mathews
Guest
10 years 5 months ago

The quick answer is that Black Friday sales were more positive than anyone had hoped they would be and that data point compared with Small Business Saturday, Cyber Monday and whatever else retailers can dream up will bode well for the 2010 shopping season.

A cynic might point out that many of these sales were “bought” through heavy discounting, aided and abetted by near insane media hype.

In the end, it doesn’t matter. Consumers did their duty and sales were up — a trend that can be expected to hold, even on an anemic basis — for the balance of the holiday season.

Bob Phibbs
Guest
10 years 5 months ago

American Express did more good for independent bricks and mortar stores with their Small Business Saturday than the SBA has in years. It is a model of an incredible social media campaign that “got it right”–some comments on RW earlier notwithstanding.

While we may not be out of the woods yet and many disgruntled media writers are touting high inventories and expected “greater discounts” the reality is America is regaining confidence in spending across channels and that is a very good thing.

Phil Rubin
Guest
10 years 5 months ago

Given the amount of sales and the level of promotion and markdowns, you cannot discount the impact of Black Friday on holiday sales as a whole. While there are countless variables, from the weather to the day-of-week on which holidays fall, we have to remember that last year was still mired in the financial crisis hangover. This year the economy is better even if it is still not great for many, especially the ~10% that are still unemployed, not to mention the under-employed.

The real impact, of course, is not just the level of sales but whether those sales are driving profits. Given the level of discounting, that’s still a big unknown.

Dick Seesel
Guest
10 years 5 months ago

The metrics for Black Friday are notoriously difficult to gauge, with the NRF report of a 6% sales increase over the weekend especially hard to swallow. (Retailers are optimists by nature, and the NRF is no exception.) The continued growth of e-commerce sales and the earlier openings (including Thursday) make the raw numbers reported in brick & mortar stores on Friday hard to use as a benchmark for the season. And anecdotal evidence (like crowded parking lots and customers with shopping bags) is no substitute for raw data. Add in the fact that Black Friday is traditionally dominated by margin-busting categories like electronics, toys and small electrics.

Retailers need to provide flavor for weekend sales today or (more importantly) they need to report November comp sales before anybody can draw conclusions about the nature of the holiday season. I still expect to see the sort of modest increases for the holiday season that happened during Back to School — there is nothing in the macroeconomic picture that would turn this season into a barn-burner.

Paula Rosenblum
Guest
10 years 5 months ago
I’m not particularly “disgruntled” but when traffic is up by a lot, and total sales are up by “a little” it means the average ticket is down. No matter how you slice that, it spells deeper discounting, and the season has just begun. With regard to Small Business Saturday, I think it’s a GREAT idea, and I really wanted to participate–long live the shopkeeper–but what Amex DIDN’T do (as far as I can tell) is identify those retailers who were “in the program.” What a perfect thing to have an app for! So rather than wander from store to store, I just stayed home. I hope next year, Amex goes the rest of the way, and lets the consumer know who’s participating. As for the rest of the holiday season…I still maintain inventories are higher than they should be. Sales will be up, profits will be flat. And the return of the gift card bodes well for January sales, and poorly for pre-Christmas sales. That also bodes poorly for aggregate margin. So I’m not being… Read more »
Doug Fleener
Guest
10 years 5 months ago
Here is some (early) insight from our retailers: – Stores who got behind Small Business Saturday seemed to do quite well. One local retailer doubled her Saturday business from the year before. By the way, AMEX has extended this promotion which should be a win-win for independents and AMEX. – Our independent retailers definitely were more profitable this year. Last year they felt they had to have aggressive pricing on Black Friday weekend, and this year they scaled the discounts back. I really think that having the Small Business Saturday to promote made it easier for them to do. – We’ve been most surprised that our Florida retailers did quite well with stores being up between 25% and 65% up for the weekend. – One group that didn’t do as well as last year were the outlet stores. Over the last couple of years the outlet malls midnight madness sales have been quite successful, but now that Walmart and others are doing them it definitely hurt sales and traffic. – Even the retailers who were… Read more »
Joel Rubinson
Guest
10 years 5 months ago

There is also a transparency factor. Remember, only three years ago retailers were outraged that their Black Friday sales were “leaked” online? Now, they embrace this, began running sales before Black Friday, and shopping apps bring sales and comparison shopping from online to the point of purchase (Amazon app allows price checking them right in Walmart? Oh yeah.)

This is a shopping renaissance that is about the process per se, not just about the economy.

Bill Emerson
Guest
Bill Emerson
10 years 5 months ago

It’s always great to celebrate a broad-based jump in revenues, particularly with all the grim news. I don’t mean to sound like a Grinch (although everybody should stick to what they’re good at), but the basic fundamentals haven’t really changed. Housing is still a mess, unemployment is high and beginning to appear intractable, and household savings rates continue to rise.

With all the discounts, extended hours, etc., there is a strong possibility for another “U-shaped” holiday pattern, where there is a big jump on Black Friday, followed by 3 weeks of giving the gains back, and a big jump towards the end as the deals get more desperate. One key indicator is sales of gift cards, used after Christmas when the discounts begin in earnest.

The key statistic to watch is sales in the coming week. If they stay strong, we should have a very good holiday performance. If not, not.

Susan Rider
Guest
Susan Rider
10 years 5 months ago

The weekend was positive for retailers. People were ready to spend a little more than the previous year. There will be more angels on the tree this year and hopefully the people who can will spread the cheer.

What was different–EARLIER; sales at Toys “R” Us started at midnight, stores opened at 3AM! By 10AM most were already back home.

Also, it seemed sale items were more practical and useful versus extravagant.

Lee Peterson
Guest
10 years 5 months ago

All indications are that, despite 9.6% unemployment, those who are employed are a little more secure with what they have, especially since savings have been way up. Secure to the point, slightly deprived to the point, whichever, it looks like we’re going to have a more ‘normal’ Holiday spending season.

Many merchants who are still giving away the farm will soon realize the above and start to take more advantage of this increased appetite and promote quality ahead of price. Those who don’t will be caught in the price war indefinitely and will have to compete like savages (vs. brand merchants) throughout 2011 until they either have the same epiphany or go out of business.

It’s going to be an interesting year!

Ralph Jacobson
Guest
10 years 5 months ago
One of the toughest things for a retailer to do is to differentiate from their competition. Although I believe this past weekend was successful for many retailers, the challenge is still how to be different and compelling. Opening up at 5am, 4am, 3am or never closing at all on Thanksgiving Day only keeps you in the game. Giving away merchandise at a loss will not keep you in business in the long run, however, it may boost holiday sales. But it will only kill margins, of course. I agree with the statement that shoppers appreciate value more than ever. “Value” can be very profitable. And value can be driven by “service.” For example, my very unscientific experience in a store this weekend proved to be both profitable for the store and satisfying for me as a customer. The store offered a bundle of gifts for a reduced price. The bundle had items for both of my kids. However there was one item that I didn’t need. The store manager walked by me, saw I was… Read more »
Dan Berthiaume
Guest
Dan Berthiaume
10 years 5 months ago

I agree with some other posters that a strong start does not guarantee a strong finish (even good “Cyber Monday” numbers today will not ensure good sales through Dec. 24) and high traffic isn’t always an indicator of strong individual purchase behavior.

However, what is clear is that retail marketers have turned Black Friday into a national holiday arguably more embedded in the public consciousness than Thanksgiving. Also consumers who used to complain about how early Christmas promotions began now look forward to holiday displays in September. The early marketing of Christmas from an awareness and public acceptance standpoint is a huge success, let’s see if it translates into profits.

Marge Laney
Guest
10 years 5 months ago

The impact of a good showing on Black Friday isn’t as important as it used to be. But, having said that, if this past Friday was a bust we’d all be lamenting the demise of the consumer and retail as we know it this morning. Cyber Monday isn’t even a relevant term anymore, but if we don’t have a decent showing today there will be those who will jump on the doom and gloom band wagon once again.

Bottom line: we’re going to examine and analyze every day, every week, and every retailer this holiday season and compare it to their pre-recession and recession performance with the hope that what we see is the post recession revival that we’ve all been anticipating.

Joel Warady
Guest
Joel Warady
10 years 5 months ago

I don’t think it was so much what the retailers did differently that caused a surge in consumer traffic and sales. I think it is simply that people are tired of being depressed, tired of cutting back, tired of not being able to afford “new things.” We are a consumer society, and what makes most Americans happy is the opportunity to consume.

The retailers have trained the shopper to anticipate large price reductions for the post-Thanksgiving shopping weekend. Consumers saved up in anticipation, bought less leading up to the holiday, and then with cash in their pocket, and pent-up demand, surged to the stores for holiday bargains. In essence it was the perfect storm; pent-up demand, available cash and credit, and great bargains. That is what makes for a profitable Black Friday, and we saw great results this year.

Let’s see what happens over the next 4 weeks, and whether or not this spending can be sustained.

Anne Howe
Guest
10 years 5 months ago

I liked the idea of the AMEX promotion on Saturday but was on an eleven hour drive and couldn’t participate via my iPhone! Maybe next year? The rest of the Black Friday madness I personally escaped by golfing and kayaking, choosing to contribute my $$ to tourism and the recreation industry instead of retail. My adult kids enjoyed the treat of a vacation on the beach!

I think the retail model is broken in many ways, and Black Friday is the ultimate time to assess that truth. The stats are more blurred than ever, but the reality is that we all contribute to creating shoppers who are forever married to the deal, and that’s just not good for the industry. I posted on my personal blog on this.

I am glad that those who really need to save money in order to give their families holiday gifts get to do so. But this deal-hunting hungry monster is on the loose and eventually it will eat most of the profits in every key retail season.

Mark Burr
Guest
10 years 5 months ago
First, I just have to say, I absolutely loved the Target commercials–they were a total scream! That being said, I didn’t go to Target. In fact, for the first time, I avoided even observing Black Friday. I did observe the only traffic spotted in my resort town and that was at Walmart. Go figure. Beyond Friday, I ventured out on Saturday. During the day, my impression was traffic was indeed up. Statistically, I think that likely bears itself out in the reports. My observance was however captured in a word–bagless. As I strolled among the crowd, it was the most common thing I noticed. Lots of folks–no bags. The inconsistency in reports from the two sources on sales is interesting. Since ShopperTrak is on real purchases, I tend to think it’s likely more accurate than a ‘survey’. Interestingly, the spread between traffic and sales is nearly exactly the same. People are looking. My interpretation is that consumers will buy slightly more or about the same as last year. Their purchases in some areas will be… Read more »
Michael Boze
Guest
Michael Boze
10 years 5 months ago

Black Friday was good, maybe better than expected. Retailers made it easier for a bigger audience to take advantage of this day after Thanksgiving event with broader use of the Internet and mobile apps.

In the consumer’s mind, the values represent a reason to get out of bed earlier. The bottom line is a better and more convenient means of shopping combined with great deals makes for a great day at retail.

What we may have witness was strong value shopping enjoyed by a bigger audience in a more convenience way to shop pushed the holiday business forward in the season.

David Biernbaum
Guest
10 years 5 months ago

I was very happy that many smart retailers promoted “value” rather than dirt cheap pricing. Of course the usual brain dead retailers tried to out-do Walmart with deep discounting and that’s almost always such a bad way to go.

Ed Rosenbaum
Guest
10 years 5 months ago
Some thoughts from someone who has never shopped on Black Friday before: I am not a shopper and do not want to be mistaken for one. I shopped Black Friday for the first time this past weekend and was pleasantly surprised. I need to say first that I was not an early shopper; but a later in the day shopper. I went to a big box retailer and a discount retailer. The staff in both stores was pleasant and more than willing to assist us. We were able to find what we wanted plus some items we had no idea we wanted. Thus we became a statistic in both the discretionary and non discretionary columns. We spent close to the average for the day; and returned Sunday to finish the job (and it is a job to me). I tend to think the strength of Black Friday came from the deals and deep discounts offered and actually available for a change. I also believe Black Friday’s stronger numbers are partially because Chanukah comes so early… Read more »
Brian Kelly
Guest
10 years 5 months ago

I doubt if the increased length for “Black Friday” offers increased total holiday spending among American consumers beyond preseason projections. Despite the increase in spending across traditional (FSIs/TV/Radio) and digital media (email/sponsorships/social), I imagine the 2-3% NRF projected lift will hold.

Additionally, I think it is crucial to check back on earnings as many retailers aggressively embraced off price promotions (sales, coupons) to drive sales.

All that said, this first weekend will show “share” shifts from outlet to outlet.

I think a more interesting question to be answered is: What share of consumers will forsake the “new normal” return to the “old normal” and spend beyond their ability to repay the credit card company?

That is the needed consumer behavior for sales to spike beyond 3%.

W. Frank Dell II
Guest
10 years 5 months ago
Black Friday was a term used in non-food retailing to indicate the retailer’s bottom line changed from red (a loss) to black (a profit). This was from the days where retailers only make a profit in November and December. Most of those retailers that operated like this are no longer with us. Sam Walton’s objective was to make money every day the store was open. Using the term Black Friday with consumers seems like a weak idea at best. The numbers I have seen of traffic up 2.2% and sales up only 0.3% overall are unlikely to have much meaning. Online shopping continues to grow at a double digit rate, but are these sales coming from brick & mortar retailers or catalog sales? The consumer is still de-leveraging. Unemployment is still over 9% and no one knows what they will be paying next year in taxes or healthcare. Wall Street will be paying good bonuses this year and that will help the top tier retailers. When all is said and done, consumer spending will not… Read more »
John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
10 years 5 months ago

The stage was set on Friday morning sometime between 4-5am. Retailers worked hard on providing strong deals and consumers responded. I was outside a Staples in Connecticut at 5am and over 250 people were lined up before the doors opened at 6am. No question, people were focused on deals, but you could look in everyone’s basket and find more than one item that was not a door buster.

Consumers have held back on spending (whether they wanted to be or not) for the last 2 years. It is clear that regardless of the tough times people want to spend and they will. This won’t be a record breaker, but the 2010 holiday season will be remembered as the one that surprised everyone with stronger than expected sales.

Craig Sundstrom
Guest
10 years 5 months ago

Let’s see: sales were up 6.4% (Wow!) and traffic 8.7% (WOW!!)… or they were up only 0.3% (OMG, the world is ending); the usual spread of all-over-place (and often contradictory) numbers allowing people to believe whatever they want. But no matter, it has nothing to do with the final holiday sales figures–except by chance–and everything to do with analysts seeking their 15 minutes of fame. Happy holidays!

Charles P. Walsh
Guest
Charles P. Walsh
10 years 5 months ago

Hate to be the “Grinch” but in the end I feel strongly that total holiday spending will end basically flat. The reality is that disposable income has not increased for the vast majority of Americans. Jobless rates and unemployment claims haven’t significantly improved and commodity prices have continued their upward creep.

I believe we’ll see that the majority of Americans spent their holiday budget early, during the black Friday/Cyber Monday time frames, in order to maximize the value of their dollar during this heavily advertised and discounted period.

Holiday sales nearly always disappoint and despite high hopes by the soothsayers, will likely repeat last year’s dismal performance.

Tim Henderson
Guest
Tim Henderson
10 years 5 months ago

Black Friday didn’t set the stage for healthy holiday spending. Rather, the stage for healthy holiday spending was set over the past year as consumers applied their recession-honed, hard-bargain shopping behaviors to celebrations and gifting throughout the year. This is a holiday season marked by savvy shopping behaviors and retailers supporting the consumer-led charge by offering earlier and better deals.

One thing re: the increase in discretionary spending; it’s not clear to me that we’re actually seeing a consumer who is confident about their own personal economy and thus willing to spend more. Rather, I think it’s more a consumer who is getting a better holiday shopping deal from brands so they’re buying. Obviously, the former would herald improved retail spending in 2011, while the latter is only holiday-related, deal-induced spending. If the hard-bargain shopping behaviors we’re seeing now are a harbinger of what’s to come, we can expect to continue to see an overall savvier shopper in search of a good deal to close the deal.

Lester Willson
Guest
Lester Willson
10 years 5 months ago
Here’s another spin on traffic being up 2.2% and volume up .3% from 2009 (depending upon the numbers you’re using): this Black Friday with its deep discounting and 24 hr mania is another installment of a gyrating business model hoping to revive the consumerism of a system that is unalterably different. An economy built on 50 – 70% consumer activity (again, who’s numbers?) fueled by obscene debt and driven by narcissistic compulsion is about played out. Unemployment, peak oil, QEII, rising commodity and energy prices, falling real asset (estate) values, stagnant wages and income, and an increasing awareness of environmental degradation and resource depletion are transforming the economy. When merchants offer 40% discounts on everything and are using a keystone, margins get cut 80%; that, and a dramatically overbuilt physical capacity mean there’s a shakeout coming with far reaching implications. This party is over. But, there will always be opportunities for astute operators who fill real needs that contribute to the quality of life. Trying to coax more vacuous consumption out of our citizens isn’t… Read more »
Ed Dennis
Guest
Ed Dennis
10 years 5 months ago

We can only pray that the loss leader worked! I have my doubts as the consumer is very wary. Everyone seems to be getting real excited about comparing last Friday to 2009.

Just remember, 2009 was the worst in 50 years. A 10% increase over 2009 really yields nothing but an indicator.

And if you really want to get frightened look at all the vacant commercial real estate–who do you think will pay that bill?