Mark 2014 as the year Black Friday officially changed from a one-day event to an amorphous holiday shopping season that starts roughly on Thanksgiving day and continues through the weekend into Cyber Monday in both physical and online stores.
The change has lessened the pressure to head to the stores early Friday morning (or in increasingly more cases Thursday evening) and has spread out the sales over a longer period of time. This has been good for shoppers as it thins the crowds and makes the chances of being trampled in the rush for the best deals lower. It has also made it less clear when to shop, since the early bird no longer necessarily gets the worm. That might lead to an extended shopping season where spending gets spread out more equally between Thanksgiving and Christmas, but the early results for retailers were not positive.
"Overall shopper traffic from Thanksgiving Day through Sunday, November 30 dropped 5.2% from 2013 (133.7 million unique holiday shoppers versus 141.1 million in 2013), according to the National Retail Federation's Thanksgiving Weekend Spending Survey conducted by Prosper Insights & Analytics. Total shopping, including multiple trips by the same shopper, was also down for the period from 248.6 million to 233.3 million.
Spending also dropped. The average person who shopped "will spend $380.95, down 6.4% from $407.02 last year. Total spending is expected to reach $50.9 billion, down from last year's estimated $57.4 billion," according to the survey.
These are mediocre results at best for retail overall, but there were still some winners during the critical sales period.
Best Buy shows it has a pulse
Seeing your website crash during the biggest shopping day of the year may be disturbing, but if it happens because of customer overload, it may be a sign of renewed interest in your brand. Best Buy (NYSE: BBY) had repeated website crashes during the holiday period, but there was a silver lining.
"BestBuy.com has experienced record levels of website traffic," according to a company statement issued Friday evening. "This has affected site performance and we have temporarily taken the site down in response. We are taking measures to restore full performance of the site as quickly as possible."
That sounds bad, and the company has not released any sales data, but ChannelAdvisor, whose technology tracks same-store sales transactions for more than 2,700 online retailers, said Best Buy's online sales rose 16.32% Thursday compared to last year, CNBC reported.
Having the site down for part of Black Friday may not have hurt the retailer as much as you would expect.
Wedbush Securities analyst Michael Pachter told the financial news site the outage is a testament to Best Buy's traffic and that he doesn't think it will have much of an impact on the retailer's results, as most people visit its site on Black Friday to compare pricing, and then shop in-store.
"This shows how hard it is to manage a website when it's busy, but props to Best Buy for being busy," Pachter said via email.
Wal-Mart and Target Thanksgiving day sales
Wal-Mart (NYSE: WMT) and Target (NYSE: TGT) were both vague in reporting their specific sales results, but both retail giants released positive statements about their sales on the actual holiday. Both companies opened their physical stores at 6 p.m. Thursday.
While shoppers were spending less and spreading out their shopping in general, that did not seem to impact Wal-Mart. The company said it served 22 million customers on Thanksgiving, a comparable number to 2013, according to The Wall Street Journal. Wal-Mart also reported its second highest day of online sales ever, behind only 2013's Cyber Monday, the company said via press release.
Target also reported strong crowds at its stores and record online sales up 40% from the previous year, the company said in a press release.
"I'm encouraged by the early results and am confident guests will love the deals they'll find throughout the weekend and the holiday season," Target CEO Brian Cornell said.
Target kicked off its in-store sales Thursday at 6 p.m. Source: Target.
Online retail was strong
Online sales were not only strong for Target and Wal-Mart, they grew overall. $1.33 billion was spent online on Black Friday alone, a 25% increase over 2013, according to Adobe, which tracks e-commerce spending through its marketing software, GeekWire reported.
Channel Advisor also said online sales were up, noting that its roughly 2,700 online retailers saw 20.1% year-over-year growth on Thanksgiving, TechCrunch reported. The big winner was Amazon, which saw a 25.9% increase in sales, the tech news site added.
And, while online sales were strong in general, IBM (IBM +3.06%) Digital Analytics found that sales patterns are shifting.
Thanksgiving Day online sales increased 14.3% over 2013, with Black Friday up 9.5% year-over-year. Average order value on Thanksgiving was $125.25, down 1.8% over 2013; Black Friday was $129.37, down 4.4%. This trend may indicate that shoppers are becoming more comfortable and digitally savvy in how they use online coupons and rebates to secure the best bargains. Black Friday online sales were 63.5 percent higher than Thanksgiving Day. This is a decrease from 2013, however, when it was 70% higher as Thanksgiving online sales continue to eat into Black Friday shopping.
Basically, the one-day rush to the malls and box stores has ended in favor of a longer shopping season where the deals can be found online as easy as they can in the stores. What was once a frenzy has become more of a marathon, where planning matters as much, if not more, than the ability to get up early or battle your way through long lines. It's a new consumer reality, and the stores that did the best are the ones most willing to change how they operate.
