Black Friday is the official unofficial kickoff to the holiday shopping season and is supposed to help catapult retailers to profitability. This year, though, one analyst says customer traffic in physical stores is the weakest he's seen in 15 years of tracking guest counts.
While Wall Street was expecting to see depressed numbers this year, the actual decline may indicate the fourth quarter will be worse than many retailers and analysts were anticipating.
KeyBanc analyst Edward Yruma said the firm's e-commerce team conducted its annual channel checks for in-store and online traffic over the weekend and found it was "the weakest that we have observed in 15+ years of store checks."
To an extent that's not wholly surprising. Rising cases of COVID-19 have caused a number of cities and states to begin locking down again while out of an abundance of caution consumers themselves are avoiding malls and stores because of the coronavirus pandemic.
Moreover, Black Friday lost its importance this year because retailers made it Black November and have been running sales for weeks to make up for lost time. The need to go out to stores on the day after Thanksgiving has diminished dramatically.
And as Yruma also notes, consumers chose to do a lot of their shopping online this year, leading him to believe Amazon.com (NASDAQ:AMZN), Walmart (NYSE:WMT), and Target (NYSE:TGT) will capture large swaths of market share because of their advanced e-commerce capabilities. Another analyst suggests Amazon will capture 42% of all online sales.
Adobe, which also monitors online shopping traffic, saw e-commerce Black Friday sales spike 20% to 29% this year.
Even so, the National Retail Federation's estimate of a 3.6% to 5.2% rise in Christmas sales this year may be too rosy of a projection.