The pre-Black Friday narrative was not entirely sunshiny, with an evolving consensus that the day – though perhaps symbolically important to consumers – is no longer quite the bellwether for holiday shopping that it once was. Instead, it seems that Black Friday has given way to Grey November and Dealcember.
But consumers, as it turns out, had a few surprises in their shopping carts, translating to surging sales online, department stores squeaking out a bit of a comeback and even brick-and-mortar stores grabbing some strong early anecdotal reports.
Then again, not all of the news was chipper. Some noted that while the performance was better this year, consumers were perhaps doing more browsing and hanging out in stores, and then doing the actual shopping online.
“The turnout this morning has been relatively slow, but it is still the best we have seen in three years,” said retail analyst Burt Flickinger. He noted that consumer confidence, a strong job market and healthy housing prices may have upped the action.
Not too shabby for an event that has been largely counted out as symbolic.
Online Sales Surge: The $1M Minute
The Thanksgiving-Black Friday crush was a boon for online shopping, with an estimated $7.9 billion in consumer spending between that two-day period. At its peak, shoppers were spending about $1 million per minute online, soaking up those big deals and buys.
All told, online sales were up 17.9 percent year-over-year on Saturday, according to Adobe Analytics, which measures transactions at the largest 100 U.S. web retailers. Mobile shopping also took a great leap forward this holiday, with commerce marketing firm Criteo noting that 40 percent of Black Friday online purchases were made on smartphones this year – an 11 percent pickup from last year’s 29 percent.
TVs, laptops, toys and gaming consoles – particularly the PlayStation 4 – were the most discounted items for online shoppers, and thus also the day’s big sellers, according to retail analysts and consultants. The ramp-up to the shopping holiday saw many retailers announcing big improvements and upgrades to their websites and shipping platforms, in an effort to compete with digital commerce’s resident 800-lb. gorilla, Amazon.
But Amazon, led by CEO Jeff Bezos, had a pretty exceptional Thanksgiving-Black Friday week on its own.
On Friday (Nov. 24), the eCommerce giant noted that orders were coming in “at record levels,” with more than 200,000 toys sold in just the first five hours of the day. Amazon’s share price picked up a little over 2.5 percent during the shopping crush, an event that was sufficient enough to see Jeff Bezos’ net worth hit the 12-figure mark at $100.3 billion.
Bezos was already the richest man in the world, having surpassed Bill Gates’ $90.3 billion personal fortune earlier this year. Bezos’ top spot was the result of Amazon’s soaring stock price in 2017. As he owns about 18.5 percent of the company’s total stock, the increase added a princely $32.6 billion to his net worth this year alone.
And, of course, we’re only at the halfway mark of the holiday shopping long weekend when it comes to online sales. Cyber Monday is upon us today, and the current prediction is for more than $6 billion in digital sales.
Department Stores Notch Some Victories
2017 could adequately be described as the season of department stores’ discontent. With few exceptions, beset by online competition, thin margins, falling foot traffic and (unique to this year) back-to-back shots from powerful hurricanes, it has not been a banner year for any of the traditional players.
But this year, pushed by the power of good old-fashioned, deeply discounted, margin-eroding early door busters, the department stores managed to prove that if all else fails, slash the heck out of in-store prices and watch customers walk/run through the door.
Many are already taking some early victory laps.
Kohl’s CEO Kevin Mansell told media that it had delivered a “record-breaking” Black Friday both in store and online – and was on track to turn in a performance well ahead of last year’s. Kohl’s also reported that 16 million visits were made to its eCommerce site, outpacing any prior traffic or sales precedents.
JCPenney, Macy’s and Nordstrom all had good early news to report.
“Hundreds – and, in some cases, thousands – of shoppers lined up outside our stores for popular items, such as the Cooks Air Fryer, Xersion puffer jackets, diamond jewelry, smart watches, Nike athletic apparel and shoes, and toys,” JCPenney noted in a Black Friday news release.
Macy’s CEO Jeff Gennette told CNBC Friday morning that traffic at its flagship Herald Square location was already on pace to surpass last year. Some credit was given to Mother Nature, with Gennette noting that the Northeast had been “blessed … with cold weather.”
It was certainly good news for Macy’s – by 7 a.m. on Friday, the department store had already sold 200,000 coats, and was on track to sell more than 1 million coats, sweaters and fleece jackets by the end of the weekend. Macy’s did have a technological hiccup in stores Friday evening that caused sluggish credit card processing in their stores, though the company does not believe it will affect their final sales figures.
Overall, according to the National Retail Federation (NRF), “it’s going to be a great weekend,” Matt Shay, NRF’s president, told CNBC. “All the retailers we’re talking to are giving us great reports, which makes sense given where we are with the economy and the health of the consumer.”
And department stores – more than any other grouping of retailers – could really use a great weekend or two to close out 2017.
Kohl’s and JCPenney were the only two chains to report same-store sales growth during the fiscal third quarter, and Macy’s stock has lost more than 40 percent this year. In addition, JCPenney’s stock is down 60 percent, and Sears shares have fallen around 59 percent. Nordstrom’s stock is down 14.5 percent, and the company has put on hold its plan to take the chain private – in an era where investors are unsure whether department stores will survive, securing financing for a department store brand has become complicated.
And while a good weekend can’t reverse all of that, or perhaps even help their margins, there was at least something for them to be thankful for early this holiday season.
…And Shoppers Even Went To The Mall
The online explosion did put some dents in physical retail this year, but not as much as one might proportionally expect.
Early estimates from ShopperTrak indicated that foot traffic “decreased less than 1 percent when compared to Black Friday 2016.”
A meager dip is good news for traditional retailers, who’ve seen foot traffic fall dramatically year over year. ShopperTrak data suggests that foot traffic has fallen 5 percent each month for more than two years.
But never underestimate the power of a door buster to draw crowds, particularly if that door buster happens on Thanksgiving evening. It seems that people who have just spent an entire day (maybe more) with their extended family might be eager for a change of scenery and an excuse to get out of the house. JCPenney opened its doors at 2 p.m. on Thanksgiving, to crowds and lines in many locations. A CNN reporter in New Jersey stood in front of a similarly enthralled crowd at a Target in Jersey City.
By most anecdotal reports, the traffic was in fact pushed by those early savings, as the crowds were a much more likely sight on Thursday evening into Friday morning. By Friday afternoon, things were looking much more subdued.
“If you think about it, it makes sense,” Macy’s former CEO and chairman Terry Lundgren told CNN. “You’ve been sitting on the couch, you’ve just eaten a big meal, you want to do something with the family and walk off the turkey. And what better place to do it than here?”
And Macy’s Herald Square location, where Lundgren gave that interview on Friday morning, was looking very crowded and pretty festive.
“There has been a significant amount of debate surrounding the shifting importance of brick-and-mortar retail,” said Brian Field, ShopperTrak’s senior director of advisory services. “The fact that shopper visits remained intact on Black Friday illustrates that physical retail is still highly relevant and, when done right, it is profitable.”
Well, on the profit side of things, that remains to be seen. Early door busters are only as good as their ability to get consumers to more non-door busters while roaming around inside. If they just buy the door buster, that is not quite so useful.
And, while it might have been better than expected, it was agreed that Black Friday was not quite what it used to be, as retailers had to work awfully hard to get customers through their doors – and it’s not clear what they bought when they got there.
Which means it might just be a very wait-and-see holiday shopping season after all.
Who said there are no surprises at Christmas for adults?
Happy Cyber Monday shopping!