Black Friday dies a slow death as shoppers migrate online
New York: The decades-old retail tradition known as Black Friday suffered another blow this week after early deals and online shopping robbed the event of many brick-and-mortar customers.
E-commerce orders surged on Thanksgiving, the day before Black Friday, eliminating the need for shoppers to wait in long lines and fight for deals at physical shops. For consumers who did want to visit shopping centers, many stores were offering deals on Thursday evening.
Online sales surged 14% on Thanksgiving, according to Rakuten Marketing, and websites such as Target.com had their biggest day ever during the holiday. Smartphones and tablets have made it easier for consumers to shop from the couch, and many more of them are now doing just that. Mobile purchases made up 41% of e-commerce orders on Thanksgiving, up from 37% last year, Rakuten found.
“I’ve been doing this for 40 years, and I’ve never seen a Friday morning be this quiet,” said Marshal Cohen, chief industry analyst at NPD Group. “Thursday has stolen Friday, there’s no question about it.”
Wal-Mart and other chains also are steering customers toward their web deals. While Wal-Mart still offers Black Friday specials at its super centers, the day marks the beginning of a streak of online promotions called “Cyber Week.” The world’s largest retailer has tripled its e-commerce selection to 23 million products this year, aiming to better compete with Amazon.com Inc. Wal-Mart said Friday that Thanksgiving was one of its top online-shopping days this year and that about 70 percent of the traffic to its website came from mobile devices.
Target Corp,, meanwhile, is offering 15% off almost everything in its stores and website for two days: Sunday and Monday. The aggressive discounts come at a cost. When Target slashed prices last holiday season, its profit margin slipped to 27.9% from 28.5% . The retailer said that Target.com saw double-digit growth on Thanksgiving, driven by deals on electronics like televisions and Apple products.
Amazon said on Friday that mobile orders on Thanksgiving topped last year’s holiday and Cyber Monday combined. Black Friday is on pace to beat last year in terms of items orders. Top-selling items include Instant Pot cookers, Hasbro Inc.’s Pie Face game and Amazon’s Alexa devices.
Thanksgiving eve is becoming a bigger shopping day too. On Wednesday, three times as many people were browsing online at retail sites compared with a year ago, according to Rakuten, which tracks online behaviour through the e-commerce platforms it provides. This comes after EBay Inc. made a plea for consumers to start shopping on their phones that day by christening the event “Mobile Wednesday.”
“For the last few years, there’s been an extension of the Black Friday online shopping behaviour,” said Tony Zito, Rakuten’s chief executive officer. “It moved aggressively into Thanksgiving, and now it’s gone into Wednesday.”
Cowen & Co. estimates that Black Friday store traffic is down 3 % to 4% , while online traffic is up 20%—mostly on mobile devices.
Even so, there are still millions of people willing to brave the cold for a deal. Olivia Daniels arrived at a Best Buy store in Brooklyn at 5 am on Friday, three hours before it opened. She hoped to nab a 40-inch LG television for $150—an almost 50% discount. The offer was too hard to pass up for the 34-year-old, who currently isn’t working because she is on kidney dialysis.
“This is a Christmas gift to myself,” Daniels said. “You save up and you get everything you want.”
Realising that fewer people are willing to join Daniels, chains have resorted to lottery-type offerings to lure shoppers to stores. JC Penney Co. was giving away $500 coupons, while Gap Inc.’s Old Navy touted the chance to win $100,000.
The National Retail Federation estimates that about 137.4 million consumers will make purchases in stores or online over the four-day weekend that started on Thanksgiving. But the amount that Americans have spent has declined in the past three years, slipping 26% from 2013 to an average of $299.60 per person in 2015.
That’s a sign that holiday purchases are spreading out over a longer time frame. Spending during the overall season—November and December—is still expected to grow 3.6% to $655.8 billion, the NRF estimates.
One thing giving retailers optimism this year: There may be pent-up demand after a polarising presidential election. Many chains, including Kohl’s Corp., Gap and Barnes & Noble Inc., blamed the campaign season for hurting spending. With the outcome settled, they’re expecting the dollars to finally flow.
Daniels, the Best Buy shopper, was optimistic about the effect Donald Trump’s presidency might have on the economy.
“Let’s see what he does,” she said. Bloomberg