SHOP, SHOP, SHOP!
Black Friday Doesn’t Matter: Every Day Is Cyber Monday
Americans are willing to shell out big bucks this holiday season. By Daniel Gross.
Black Friday, the official opening to the frenzied Christmas shopping season, has never been more heavily covered than it was this year. Paradoxically, it may have never mattered less.
For years, the day after Thanksgiving was a great retail harbinger, a leading indicator of how the vital Christmas shopping season will turn out. In an economy driven by consumer spending, Black Friday assumed totemic importance. Analysts sift through the traffic and sales rung up by mall retailers the way Roman priests used to inspect chicken entrails for omens. But thanks to shifts in technology and consumer habits, Black Friday has lost a great deal of its real and symbolic importance. Sure, millions of Americans queue up, as if at a party. And, yes, Black Friday provides the spectacle of gunplay, arrests, and casual violence. But in the future, we may not have Black Friday to kick around.
Why? Consistent encroachment is pulling sales that would have taken place on Black Friday earlier in the week. Shoppers who wish to get a jump on their lists without wading into occasionally violent crowds start shopping the Wednesday before Thanksgiving, as my family did. Retailers have also decided to get a jump on the competition by opening Thursday and offering enticing discounts. That means a bigger portion of the retail-sales pie is being consumed on the day pumpkin pie is consumed. Walmart reported that on Thursday night, “during the high traffic period from 8 p.m. through midnight, Walmart processed nearly 10 million register transactions and almost 5,000 items per second.” The logic is inescapable: the merchandise is there and paid for. So why not try to move it?
As a result, a lot of retail business that was not conducted on Thanksgiving Day 2011 was conducted on Thanksgiving Day 2012. It’s likely the same will be the case next year. This trend reduces the utility of Black Friday sales as an indicator. As ShopperTrak reported, while more Americans hit the malls on Black Friday 2012 than on Black Friday 2011 (foot traffic was up 3.5 percent), actual sales fell by 1.8 percent. Said ShopperTrak founder Bill Martin: “While foot traffic did increase on Friday, those Thursday deals attracted some of the spending that’s usually meant for Friday.”
What’s more, the mall may be the wrong place to be looking for shoppers. With every passing day, every passing week, and every passing month, a larger chunk of retail sales are conducted in front of computers, on mobile phones, or on tablet devices. People have never had a greater ability to shop from the comfort and privacy of their own homes. Plenty of people who were horrified at the prospects of stores being open on Thanksgiving pushed back from the table to make an order on Amazon.com or on Rue La La. As the National Retail Federation noted on Thanksgiving Day, NRF estimated “more than 35 million Americans visited retailers’ stores and websites Thursday—up from 29 million last year.” That’s an increase of 20.6 percent.
Simply put, online shopping is taking market share from physical retail sales—on Black Friday and every day of the year. Online shopping is not yet 20 years old, so overall it has a small chunk of retail sales. But increasingly, every day is Cyber Monday. According to the Census Bureau, in the first 10 months of 2012, sales at “nonstore retailers” were up 11.8 percent from the first 10 months of 2011, while overall sales were up just 5.5 percent. So far this year, nonstore retailers have accounted for about 8.6 percent of total retail sales. That means that overall holiday shopping sales can rise by a decent margin even as bricks-and-mortar sales barely budge. That’s what NRF said happened over the weekend. As The New York Times reported online, “sales increased 17.4 percent on Thanksgiving, and 20.7 percent the next day, according to I.B.M., which tracks e-commerce transactions from 500 retailers.” In its survey, the National Retail Federation found that “the average person spent $172.42 online over the weekend, or approximately 40.7 of their total weekend spending, up from 37.8 percent last year.”
Because the geography of shopping, and working in retail, is shifting, analysts who look only at Black Friday sales at stores aren’t seeing the whole picture. Rapidly changing consumer behavior makes it difficult to compare results from year to year. Instead, we have to look at online and physical sales on the period from Thanksgiving Day to Sunday to get a true view of how the holiday shopping season started.
Black Friday sales were disappointing for many physical retailers—while traffic was up, sales were down. But that’s missing the bigger picture. Consumers are more confident today than they’ve been in years. The economy has added about 2 million payroll jobs in the past 12 months. And the more comprehensive surveys about shopping over this past weekend point to another record year. According to the National Retail Federation’s survey, “a record 247 million shoppers visited stores and websites over Black Friday weekend, up from 226 million last year.” That’s an increase of 9.3 percent. The average amount spent by a holiday shopper over the weekend rose 6.2 percent.
Black Friday may have been gloomy for some retailers. But the holiday shopping season is off to a merry start.