Retailers rejoice — and Cyber Monday sales could set a record

November 27, 2017 in Latest News

Shoppers opened their wallets Thanksgiving weekend, setting records in online purchases while also hitting the malls in a big way, giving retailers a strong start to the holiday shopping season.

The next big test comes Monday, also known as Cyber Monday, when consumers are expected to take to their keyboards in record numbers to pursue online discounts.

Shoppers spent $5.03 billion on Black Friday, traditionally one of the biggest shopping days of the year, 16.9% more than on that day in 2016, and a new record, according to Adobe Analytics.

Thanksgiving Day also saw a surge in online spending, with purchases leaping 18.3%, to $2.87 billion, as compared to last year, Adobe says. That performance bolstered the forecast that Cyber Monday could become the largest online shopping day in history, generating $6.6 billion in sales, 16.5% more than in 2016.

ShopperTrak, meanwhile found that customer visits slipped less than 1% on Black Friday, and dropped a combined 1.6% over both Thanksgiving and Black Friday. In-store traffic declined 4.5% on Black Friday, according to RetailNext which analyzes in-store performance.

“It was a huge win,” said Rod Sides, vice chairman of consulting firm Deloitte. “I think bricks and mortar (malls and stores) held their own this weekend, which is exactly what (retailers) were wanting and needing this holiday season.”

Online sales were pushed by consumers’ growing use of mobile devices for purchases: online retail giant Amazon said that purchases made via its mobile app were 50% higher on Thanksgiving than the number placed on smartphones and tablets on the same day last year.

The long weekend was the first big test of the holiday season, the make-or-break period for retailers. It’s particularly critical this year in pointing to the future of chains like Toys R Us, which is restructuring under bankruptcy protection, and iconic but troubled companies like Sears and J.C. Penney, which have shuttered stores amid dwindling profits and sliding sales.

“The holiday is when the brightest light gets shone on your business,” says Charlie O’Shea, lead retail analyst for the credit rating agency Moody’s. “If the website isn’t up to snuff …(customers) are not going to shop,  and if your stores aren’t looking fresh, they’re going to walk out and they’re going to go somewhere else.”

But the door-busting, deep-discount sales that are the hallmark of  Black Friday and the entire Thanksgiving weekend pose a potential dilemma for many retailers.

They need to offer deals to price-conscious shoppers, particularly when trying to compete with online giant Amazon and the world’s biggest retailer Walmart. But if they discount too much, they could erode their profits and undermine their bottom lines.

“Amazon and Walmart are battling over market share in many different categories,’’ said O’Shea, who added that the turf war is “rippling throughout retail. … There’s a lot of retailers especially during the holiday that are going to have some tough decisions to make on whether they can price that low and if they do, what’s the impact.’’

The answer won’t come until January or February, when most retailers report their fourth quarter financial performance, he says.  But “fighting with Amazon and Walmart in a price battle is not usually successful.” O’Shea says.

Still, Sides says retailers carefully assess what they need to charge to woo customers and still make money. “Most would like to be promotional early and then they can adjust vs. not having an offer that’s compelling and having the consumer go somewhere else,” he says.

Sonia Syngal, president and CEO of Old Navy said Friday that it was seeing long lines at its stores, and strong business online as well.

The company’s focus “is to ensure the customer is getting great value . . and at the same time that we’re driving a healthy business,” Syngal said in an interview. “I think we’re finding that right balance.”

Despite its strong showing, Black Friday is no longer the only day shoppers can grab the season’s best deals, with retailers rolling out bargains throughout November, including on Thanksgiving Day when big box giants and department stores like Target, Kmart and Macy’s were open.

The dip was evident in Rehoboth Beach, Del., where Ayla Orteza, manager at a Michael Kors outlet said the throngs arrived between 3 and 5 a.m.Friday morning, and managers of several other outlet stores agreed that the Black Friday rush had already come and gone by the time the sun came up.

In Wisconsin, Bev Huettl noticed that the aisles were a little less crowded.

“Normally we shop all night, but they closed the mall at midnight,” Huettl, of Greenville, Wis., said of her holiday trek to stores in Grand Chute, about 100 miles north of Milwaukee. “Black Friday is not as bad as it used to be. It’s not crazy busy. I think that’s because more people are going online.”

That was the case with Rhonda Graphos and Robynn Gershmehl, sisters from Appleton, Wis, who said they got plenty of online shopping done well before Black Friday, so their lists were shorter and the need to fill their carts on that day a little less urgent.

“It was nice not getting beat up by the crowds,” said Gershmehl.

The slight dip in store traffic was expected, with shoppers telling consultancy Deloitte that for the first time, they planned to spend more of their budget — 51% — shopping online rather than in store, where 42% of their dollars would go.

“As more people move to spending online, foot traffic is going to be down slightly,” Sides says, “but again, I think people were predicting a doomsday scenario and that everybody was going to be online and that’s not the case at all.’’

In some spots, the decision by some stores to close on Thanksgiving, resulted in long lines Friday morning.Hundreds of people waited before dawn outside Menards, a Wisconsin-based home improvement store, and its parking lot was filled by 6 a.m.

Carts were all taken six minutes after the store opened, and shoppers who came later grabbed garbage cans to collect their purchases which included items ranging from dog beds to salt lamps.

“We’re fortunate that it’s 40 degrees,” said general manager Tony Jacobson, standing outside in short sleeves and no jacket, about the relatively balmy weather.

Source: USA TODAY

Why Black Friday Is Dying

December 1, 2014 in Latest News

black fridayTwo strange things happened over the holiday weekend. The average price of a tank of gas fell to just $2.76. And Black Friday sales plummeted 11 percent.

Neither datum is strange on its own, of course; it is the combination that has retail analysts and economists scratching their heads. That is because low prices at the pump tend to be a powerful stimulus for consumer spending. Every penny that gas prices fall translates into a billion or so dollars for families to spend on other things, like Christmas gifts, over the course of a year. The sharp decline in gasoline prices in the past few months had analysts convinced that we were in for a big Black Friday spending boom.

But Prosper Insight & Analytics has estimated that total spending over the weekend dropped to $50.9 billion from $57.4 billion in 2013. That is both because fewer people went shopping (133.7 million, versus 141.1 million a year ago) and because they spent less money ($380.95 on average, versus $407.02). Black Friday is dying. And there seem to be three big reasons.

1. The Hangover Economy
The National Retail Federation cited the still-sluggish recovery as a central culprit in the surprising spending numbers.

Executives at the retail federation, which had predicted strong growth in sales this holiday season, appeared at a loss to fully explain the drop-off. The results could show that “there are a significant number of Americans out there for whom the recession is not yet over,” said Matthew Shay, the group’s president and chief executive.

There’s plenty of economic good news out there, including falling gas prices, rising employment, and improving consumer sentiment. Even so, wages have remained stagnant and many families still feel pinched, particularly at the lower end of the earnings spectrum. The depth of the recession and the sluggishness of the early recovery also might be lingering in families’ minds, leading them to hold back on spending even when they have the money to spend.

Why the economy might have been more more of an issue this year compared to last year is a mystery, and the explanations get tautological pretty quickly. (Consumers are spending less … because they don’t want to spend as much?) But there are two further trends that might have dissuaded price-sensitive consumers from heading out for Black Friday this year.

2. Cannibalism
The retail universe is zero-sum. If you are buying a bath set at Superstore A, you are not buying it at Big Box Store B. That gives stores an incentive to get shoppers in the door on Black Friday with a few door-buster deals — a $119 television, say, or a one-cent Samsung Galaxy S5 — and then to juice their spending with many more fake “deals.” Shoppers think that they are getting a bargain, but those 50-percent off bath sets probably cost the same amount, full price, a few weeks ago.

But there’s another way for retailers to lure customers in: offering deals early or late, appealing both to avid shoppers and non-masochists who choose not to go out to hypercrowded malls with their relatives the day after a giant turkey dinner. As such, at Walmart, Black Friday has officially become a “five-day event.” And really, this year, it has become an eight-week one. Target started pushing out its Black Friday deals on November 10, and Walmart on November 1. Stretching out the traditional Black Friday shopping window has reduced the pressure on families to shop on Black Friday itself — as evidenced by the deflation of the weekend’s sales numbers.

3. The Internet
Sure, you can try to assess a deal in person: “This television seems like a bargain. That set looks the same and costs $50 more. Maybe I’ll elbow 13 people out of the way to try to get that one over there … ” But comparison-shopping is vastly easier online, and that is where millions of price-sensitive shoppers are now choosing to look for holiday gifts. And time is much less of the essence when you are looking for Aunt Millie’s present on the web. Don’t see a television that fits your criteria? Log off and wait a while, or pick out something else.

Many brick-and-mortar stores saw flatter sales through the holiday weekend. But online retail giants did well on Black Friday. Amazon’s sales climbed 26 percent year over year, and Best Buy’s website got so much traffic that it crashed.

The combination of those three things — still-tentative consumers shopping in a wide-open sales window with numerous online options — helped to undercut Black Friday this year, and good riddance to it, too. But do not worry too much about America’s stores. At the end of the day, aggregate spending is all that matters to them. And there’s no relationship between Black Friday sales and overall holiday sales — really, none — anyway.

 

Source:  New York

 

U.S. Holiday Trends & Forecast

December 2, 2013 in Latest News

holiday shoppingEven government shutdowns can’t put a damper on the consumer’s plot to shop this holiday season. In fact, the National Retail Federation forecast sales in November and December to increase 3.9 percent from 2012 to $602.1 billion – higher than the 10-year average holiday sales growth of 3.3 percent.

“Overall, retailers are optimistic for the 2013 holiday season, hoping political debates over government spending and the debt ceiling do not erase any economic progress we’ve already made,” said NRF President and CEO Matthew Shay in an October report.

This year’s holiday retail season shows trends already emerging – like when people will shop, what products they’re interested in and what devices they’re using to shop with.

When People Are Shopping

With the holiday retail season officially kicking off in about a week, online data shows piqued interest in starting the shopping season as soon as possible. Yahoo reported that earlier this month, queries for major retail events spiked:

  • The term “Black Friday 2013” is spiking by 1,013 percent this month.
  • The term “Cyber Monday 2013” increased by 735 percent just this past week.
  • Searches for “Black Friday ads” jumped by 351 percent this month.

And certain areas of the United States showed more interest in Black Friday than others. “Most U.S. searches for ‘Black Friday’ this month have originated in Omaha, Minneapolis, Los Angeles, Columbus, and Buffalo,” Yahoo said.

While Black Friday is generating interest, Adobe predicts that 2013’s Cyber Monday will be the “biggest online shopping day ever” generating an estimated $2.3 million.

What People Are Shopping For

Experian Marketing Services has been tracking trending product searches through data from Hitwise, showing what’s on people’s wish lists as the holiday season approaches. For tech junkies, it seems Apple-related products are at the top of many people’s list, with the iPad Air stealing the No. 1 spot.

For consumers with kids, Experian showed trending toy searches that included “skylanders swap force,” “rubber band bracelets,” and “crazy cart” (we never heard of this one either, until today).

Furbies are making a comeback according to data from Yahoo which shows “furby boom” is trending this holiday season with a 194-percent increase in search volume.

What Devices People Are Shopping With

Armed with the knowledge of what people are searching for, retailers need to know next how people are shopping to cater the experience. Adobe forecast mobile shopping will rise 40 percent this holiday season, according to data from the Adobe Index.

In fact, Adobe predicts the best websites will see nearly 15 percent of sales coming from tablets and 6 percent from smartphones.

So when it comes to what your consumers are looking for this holiday season, what device they’re using and where they’re using it, the question is: Are you ready for the biggest retail season of the year?

 

Source:  Search Engine Watch