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Black Friday 2018: Digital Sales Show Major Growth

By Daniel B. Kline – Nov 26, 2018 at 7:50AM

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Consumers are increasingly buying online, but maybe not in the numbers you think.

Cyber Monday will be a full day focused on digital sales, but that doesn't mean Black Friday has been relegated solely to stores, or that it's continuing to lose shoppers to an ever-expanding holiday shopping season. In reality, Black Friday will have had the same amount of shoppers as last year -- 41% of U.S. consumers, according to data form OpenX -- and those shoppers will have spent more money online on the day after Thanksgiving.  

Digital spending on Black Friday came in at record levels. Consumers spent $6.2 billion throughout the day, a 23.6% improvement over the previous year, according to data from Adobe (ADBE -0.87%).

"Black Friday will come very close to eclipsing last year's Cyber Monday in terms of online sales," said Adobe Digital Insights Director Taylor Schreiner in a press release. "As retailers invest in improving mobile experiences, consumers are clearly feeling more confident in buying higher-ticket items [from] their smartphones."

A person holds a credit card over a laptop.

Digital shopping is growing faster than brick-and-mortar shopping. Image source: Getty Images.

How are people shopping online?

While people are becoming more comfortable using their phones to make major purchases, the majority (60%) still get made from traditional computers, according to Adobe data. The remaining 40% is split between mobile phones (30%) and tablets (10%), according to data through Nov. 23.

"While some Americans might have been waiting in lines at stores today, the data suggests that at least some of them joined their peers in shopping on their phones -- and buying more than they did in years past," Schreiner added.

Phones generate the most traffic to digital stores, at 49%, but consumers convert into purchases less often. That makes sense, because consumers are likely to use their phones to check prices or alternatives while in a store.

It's becoming a digital world

During the holiday season, you'll see reports -- sometimes ones that sound credible -- about how digital shopping has exceeded brick-and-mortar sales. That drives the retail apocalypse narrative that blames online sales for killing traditional chains and taking sales from malls.

That has happened, but the numbers may not be what you think they are. Adobe forecasts that digital sales will rise by about 15% this year between Nov. 1 and the end of the year to $124.1 billion. That sounds like a lot, and it is a really big number, but it's only roughly 19% of the $717 billion to $720.89 billion in total sales the National Retail Federation (NRF) predicts for the 2018 holiday season.

What's important is that the NRF expects total sales to be up 4.3% to 4.8%, while Adobe expects digital sales to grow by 14.8%. That means digital is gaining on brick-and-mortar, but it's certainly not putting retailers out of business.

In addition, some sales have moved into the omnichannel category, where both digital and physical resources come into play. How exactly do you classify a digital order placed from a store or an online sale picked up at a brick-and-mortar location?

To succeed, brick-and-mortar chains clearly need to embrace an omnichannel model, and pure-digital retailers must make returns as easy as possible. Consumers are demanding the ability to buy, pick up, receive delivery, and return at their convenience. Stores that embrace that model will succeed, while ones that cling to outdated models will suffer or die.

Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Adobe Systems. The Motley Fool has a disclosure policy.

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