Retailers give a lot of focus to Black Friday weekend (from the Friday after Thanksgiving through the following Monday, “Cyber Monday”). Most promotions for that weekend are planned weeks or months in advance, and leaks of Black Friday deals have gone from something retailers banned and protested, to something they strategically timed, back to something some retailers have banned and protested.
Black Friday has its benefits – it clearly drives traffic, and clearly there are many shoppers who at least respond to Black Friday deals, even if they may or may not love the holiday itself. And there are plenty of shoppers who do actually love shopping that weekend. But does it create a distorting effect in purchases, sort of the holiday equivalent of “pantry loading”? The event certainly has its costs – staying open for extended operating hours, paying holiday pay, creating demand that well exceeds a store’s capacity to respond (resulting in long lines and frustrated customers).
ShopperTrak and Chase Paymentech have both released their numbers on sales for stores and for eCommerce, respectively. Both report them as year-over-year sales change – ShopperTrak reports them against a week-over-week comparison, while Chase reports them daily (Figure).
Sources: eCommerce – Chase Paymentech Holiday Pulse; Store – ShopperTrak
In terms of volume, ShopperTrak reports that Black Friday was the biggest shopping day in terms of overall sales, followed by December 22, December 23, December 21, and December 15, vs. eCommerce’s biggest shopping days of Cyber Monday, December 10 (“Green Monday”), Black Friday, and December 17 (“Free Shipping Day”). Overall, ShopperTrak reports estimated sales for the holiday to be up 2.5% (vs. NRF’s 4.5% prediction) reaching $248.8 billion, and comScore estimates that online sales grew 14% to reach $42.3 billion (vs. NRF’s prediction of 12%).
Black Friday weekend has intensified in promotional activity over the years – including a race to open earlier than everyone else – in an attempt to capture consumer spend before they end up giving it to another retailer. However, this year in particular, that looks like it didn’t work. Or, at least, if you didn’t have a highly successful Black Friday weekend, then all was not lost – something to remember for next year.
Based on the data coming out about this holiday season, which by the way is more and sooner than we’ve ever received before, retailers can take away a couple things as they make their own assessment of their individual holiday success and start inevitably planning for next year:
- Black Friday’s success or failure is no predictor of the overall holiday season’s success or failure. This year, Black Friday weekend was up significantly over last year – for online retail. comScore reported up 28%, and ShopperTrak, looking at stores, found traffic up 3.5%, but sales were down 1.8%. Some of this was due to the shift to earlier opening hours on Thanksgiving day, but the net result for retail was that online was the clear winner for Black Friday sales. And while the lower sales were disappointing, and ultimately led ShopperTrak to reduce its own forecast for the holiday season, it in no way indicated the degree to which sales increased in the last week before Christmas Day – which ultimately saved the season for stores.
- Black Friday weekend is not your only weekend to capture sales. I’ve already seen a lot of commentary on why sales surged in stores late and why online fell off towards the end – the online commentators have said that online sales fell because consumer confidence crumbled in the wake of the fiscal cliff while the store commentators felt that store sales surged late because consumer confidence increased in the wake of improved jobs outlooks. Which one is right? Both, neither – it doesn’t really matter. To me, what’s important is that Black Friday is not necessarily the day to roll out your best prices. If you’re primarily an online reader, the week before the shipping cutoff yields at least as much opportunity as Black Friday weekend, and the same can be said about the week before Christmas for store retailers. Knowing what your competitors’ prices are on a daily basis can help you optimize your promotion timing. If you hold back some world-class deals, you might have a chance to rise above the noise.
As more information comes out, it may be possible to get a better handle on which story about the holiday season is the right one – election delayed spending, fiscal cliff made it fall off sooner than expected, Hurricane Sandy had its impact, maybe consumers didn’t spend as much on themselves as they shopped for their loved ones. The only definitive thing we can say about holiday 2012 is that it could’ve been better – but it also could’ve been much worse!