Black Friday Shopping Up, Deals Abound
More people shopped on Black Friday, but spending per person was down, according to the National Retail Federation trade group, headquartered in Washington, D.C.
Surveys taken by the trade group over the Thanksgiving weekend, the traditional start of the winter/holiday shopping season, found that 154 million people shopped for gifts during the weekend, up from 151 million who shopped during the 2015 Thanksgiving weekend.
However, the NRF survey also found that average spending per person dipped. During the Thanksgiving weekend, average spending per person was $289.19 compared to $299.60 during the 2015 Black Friday weekend.
Jack Kleinhenz, the NRF’s chief economist, said spending declined due to heavy discounts offered by retailers. The big promotions were offered across the board by all retailers, he said in a Nov. 27 conference call with reporters. The NRF survey found that 36 percent of Black Friday shoppers bought 100 percent of their purchases on sale, compared to 11 percent who bought their purchases on sale during Black Friday 2015.
During the recent Black Friday, Macy’s department store offered doorbuster deals that ranged from 25 percent to 75 percent off full price. Deals continued on Cyber Monday, the first Monday after the Black Friday weekend, when consumers traditionally start shopping online. On Cyber MondayTarget offered 15 percent off purchases made online and in stores.
At the Fashion Island retail center in Newport Beach, Calif., retailers that typically do not offer deep discounts spent the Black Friday weekend offering sales, said Christine DuVall, senior director of marketing for The Irvine Company, owner and operator of Fashion Island as well as other Orange County malls such as Irvine Spectrum and The Marketplace. Fashion Island’s Anthropologie store featured 30 percent off some items. Across the mall, 7 For All Mankind took 50 percent off some items. BCBG took 50 percent off the entire store.
Those retailers who generally give discounts sought to offer bigger savings during the shopping weekend. At Citadel Outlets, near downtown Los Angeles, retailers have built a reputation offering goods 20 percent to 60 percent off for retail price. But on Thanksgiving and Black Friday, many retailers were offering 50 percent to 70 percent off outlet prices, said Chelsea Hartnett, director of public relations for Citadel Outlets.
Despite the heavily promotional environment, retailers are still forecast to make profits this holiday season, Kleinhenz said.
“There were no surprises this weekend for retailers. Because they take the time to plan it, they plan it with margin in mind,” he said. “In a perfect world, all retailers would sell everything at full price, but the era of promotional sales is with us to stay. The challenge for retailers is to create experiences that will bring consumers back and make products that will allow them to promote and make margins.”
NRF surveyors also found that 43 percent of Black Friday–weekend consumers shopped online while 40 percent said they shopped in physical stores. Consumers jumped from shopping channel to shopping channel during the weekend.
“They are not mutually exclusive,” Pam Goodfellow said. She is the principal analyst for Prosper Insights and Analytics, the group that conducted NRF’s surveys. “Shoppers shop throughout formats, and shopping online is not entirely rooted in pure-play retailers,” she said of e-retailers that do not run physical stores.
However, the beginning of the holiday season was seen to be a go-go time for e-commerce. Market researchers comScore Inc. found that e-commerce gift buying increased 17 percent to $1.29 billion on Thanksgiving in a year-over-year comparison. On Black Friday, e-commerce spending increased $1.97 billion, up 19 percent from the 2015 Black Friday. The Reston, Va.–based company’s survey measured desktop e-commerce only. Gian Fulgoni, comScore’s chief executive officer, said that Thanksgiving has been established as a time not just for family and a feast.
“Thanksgiving has now established itself as one of the more important online buying days of the holiday season while Black Friday also continues to gain in importance online—this year becoming the third-biggest online desktop spending day of all time, after Cyber Monday 2015 and 2014. Looking ahead, we expect Cyber Monday 2016 to surpass $2.5 billion in desktop spending and $1 billion on mobile commerce to become the leading online spending day for the seventh straight year as people use down time at work to continue their holiday gift buying,” he said in a prepared statement.
Southern California weather included rain during the Thanksgiving weekend. Irvine Company’s DuVall said the inclement weather did not scare consumers from shopping at open-air retail centers Fashion Island and Irvine Spectrum. Rather, the seasonal change helped the bottom line. The change in weather from summer temperatures had shoppers buying winter clothes such as outerwear, scarves and gloves.
Rain drove crowds to the enclosed mall Beverly Center in Los Angeles, said Susan Vance, the marketing and sponsorship director. The Taubman-owned mall experienced a year-over-year increase in attendance during Black Friday and the Thanksgiving weekend, but Vance declined to say how big the bump was. During the rainy weekend, popular items at Beverly Center were jeans, faux furs, boots and bomber jackets.
Vance forecasted that crowds would shop for themselves until the last two weeks of the season, when they start shopping for gifts for others. Many consumers have not started holiday shopping, NRF’s Black Friday survey found. Only 9 percent of consumers have wrapped up their holiday shopping, which is down from 11 percent who completed their holiday shopping on Black Friday in 2015, said Matthew Shay, chief executive officer and president of NRF.
“With mid-season shopping behind us, it’s not too late for retailers to tweak their online and in-store strategies to help increase traffic and see a big payoff during the last few weeks of the holiday season,” Shay said in a statement.
Photos courtesy of Fashion Island and Citadel Outlets