After Questionable Start, Holiday Season to Finish Strong

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After Questionable Start, Holiday Season to Finish Strong

11/29/2016

By Mike Troy

Various forecasts have holiday season sales this year growing in the low mid-single digit range, with the National Retail Federation putting November and December sales growth at about 3.6 percent. However, while the number of people shopping in store and online on Thanksgiving and Black Friday increased to 154 million from 151 million, average spending per person declined slightly to $289 from $299 last year, according to NRF’s survey of more than 4,000 people.

When it comes to where consumers shopped over the weekend, the survey found that 44 percent went online and 40 percent shopped in-store. The most popular day to shop online was Black Friday, up 1.3 percent from last year to 74 percent, followed by Saturday (49 percent), Thanksgiving (36 percent), and Sunday (34 percent). And, of those that shopped in store, 75 percent shopped on Black Friday, up 3.4 percent from last year, 40 percent on Saturday, 35 percent on Thanksgiving and 17 percent on Sunday.

The ShopperTrak division of Tyco Retail Solutions showed store visits declined 1 percent on Thanksgiving and Black Friday combined.

“After analyzing historical shopper visit data, we found that Thanksgiving Day store openings were increasingly pulling shopper visits from Black Friday over the past few years,” said Brian Field, senior director of advisory services for ShopperTrak. “This year, we saw a reversal of that trend, which can be attributed to several factors, including fewer store openings on Thanksgiving Day, as well as online shopping. Overall, the message is positive, as the data indicates that Black Friday is still a meaningful day for retail and should not be counted out.”

Eight of the 10 anticipated busiest shopping days still remain, including Super Saturday, which shifts to Dec. 17 with Christmas Eve falling on a Saturday, according to ShopperTrak.

Offering a different perspective was the International Council of Shopping Centers, whose survey showed that three fourths of Americans spent the same or more this year when compared to last year and that only 44 percent of that spending was on gifts for other people. Americans shopping on Thanksgiving and/or Black Friday spent an average of $373, including approximately $100 on dining and entertainment in a shopping center.

“While the holiday shopping season has lengthened and includes all of November and December, the Black Friday and Thanksgiving results are important, and this year serve as a positive indicator for the holiday season,” said ICSC President and CEO Tom McGee. “Today’s consumers visit their local malls and shopping centers for shopping, dining and entertainment. They also expect a seamless digital and physical experience, and more and more are turning to retailers that offer this.”

Even Amazon Prime members visited stores, but in declining numbers, according to research from InfoScout’s consumer panel. The firm said 59 percent of Amazon Prime members braved crowds on Black Friday, down from 65 percent the prior year.

“What happens when Amazon Prime membership increases by 23 percent to 50 million U.S. consumers over the past year, and the percentage of Prime members shopping in stores on Black Friday declines during by nearly 10 percent? The answer is a decline in Black Friday shopping that should strike fear into Amazon’s competitors—both in-store and online,” said Jared Schrieber, InfoScout’s co-founder and CEO.

Meanwhile, data from Adobe showed that on Thanksgiving Day and Black Friday combined more than $5 billion ($5.27 billion) was spent online by the end of Black Friday, a 17.7 percent increase from the prior year year-over-year (YoY). Black Friday alone set a new record by surpassing the three-billion-dollar mark for the first time at $3.34 billion for a 21.6 percent growth rate. It is also worth noting that Adobe’s data shows that Black Friday became the first day in retail history to drive over one billion dollars in mobile revenue at $1.2 billion, a 33 percent increase from the prior year.

“Shoppers hit the buy button at unprecedented levels as conversion rates were up nearly a full percent across all devices in the evening hours on Black Friday,” said Tamara Gaffney, principal analyst and director, Adobe Digital Insights. “With the full day total coming in at $3.34 billion, Black Friday may have just dethroned Cyber Monday's position as the largest online shopping day of the year.”

Data from IBM show slightly lower growth rates. In the weeks leading up to the holiday weekend, IBM found that online shopping was up nearly 10 percent over 2015. Online sales for U.S. retailers increased by nearly 12 percent on Thanksgiving and by 9.3 percent on Black Friday.

Aside from shopper surveys and data from service providers, several retailers claimed to have won the weekend but stopped short of providing actual numbers.

“This Black Friday, we promised customers great deals, more availability of those items, an integrated offering with Walmart.com and the simple shopping experience our customers have come to expect from Walmart. I am proud to say that we’ve delivered on all fronts,” said Steve Bratspies, chief merchandising officer for Walmart U.S. “Our customers were particularly excited about the new technologies we offered this year. In addition to picking up Black Friday favorites like televisions and toys, they flocked to our stores for drones, virtual reality products and hoverboards.”

And turkeys and hams. Bratspies did disclose that Walmart sold 150 million pounds of those two proteins combined leading up to Thanksgiving.

Target CEO Brian Cornell also said the retailer had a strong start to the season that he found thrilling.

“We had a record-breaking day on Target.com and traffic to our stores was strong,” Cornell said over the weekend, adding that he expected the momentum to continue.

If the cadence of holiday season spending holds true to prior years, retailers can expect a calm before the storm. As ShopperTrak noted, many of the busiest days of the season remain, with Super Saturday on Dec. 17 and Christmas Eve on Saturday, Dec. 24. Both days are sure to have intense shopping activity followed by high levels of gift card redemptions in the weeks following Christmas.

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