Friday, November 23 was Black Friday, the beginning of the holiday shopping season. And according to a news report by Bloomberg, the event has become increasing focused on online shopping. However, traditional retailers found themselves lagging behind during the US’s biggest sale day.
Traditional retail chains have decades of experience in in-store sales. They know how to stock their shelves and work out store logistics. However, these retailers still have not mastered the technique of being able to sell online, despite heavy investments and a lot of talk about how much they have done for their e-commerce businesses.
That was quite apparent with the long-time brick-and-mortar retailers like Lowe’s Co., Kohl’s Corp., Lululemon Athletica Inc. and even Walmart Inc. All these retailers who have just recently started focusing on their e-commerce businesses were faced with technical glitches as well as malfunctions on their online stores. And they had to deal with a lot of customer ire due to this.
According to NPD Group analyst Marshal Cohen, yesterday’s Black Friday sale did highlight how important it is to invest in both logistics as well as technology. Stores need to be able to handle the online shopping traffic on such a day.
US retailers have done solidly – but not outstandingly – well this year. Most of them posted decent quarterly results, which had lifted expectations in the market about how they would perform during the holiday season, especially the first day – Black Friday. In fact, market experts had expected 2018 to be the best holiday season for retail sales in 15 years.
Unfortunately, thanks to the stock market tanking in the last few weeks, investors became nervous, which led to retails stocks across the board paring gains for the entire year on concerns about how they would evolve.
While all the results of the Black Friday sales are still not in, initial data shows that most of the growth in sales is taking place in the e-commerce space. Adobe Analytics is tracking e-commerce, and according to the researcher, by 10am New York time, $643 million had been spent online, which is a 28% gain over 2017’s sales.
Online shopping currently looks to be on track for meeting the market expectation of being more than $6.4 billion. In fact, Adobe is now predicting that this year’s Black Friday online sales may actually exceed 2017’s Cyber Monday sales totals.
According to first reports, foot traffic at brick-and-mortar stores were at the same level as last year, however, some stores actually saw lower traffic. Over 60% of the JLL malls from the American East Coast reported that foot traffic was more or less the same as last year. Anecdotal data says that once the day warmed up, traffic in the malls actually increased.
Cowen & Co. analyst Oliver Chen said that he was most impressed by the traffic at Walmart and Kohl stores. He feels that this year, the mix will be stronger foot traffic in brick-and-mortar stores as well as substantial growth in online shopping. That combination, he said, will lead to strong results for American retailers.
The one thing that could impact Black Friday sales is that retail offerings are also evolving. This year, retailers spread out their deals on purchases across November, and Thanksgiving Day is also turning into quite a big shopping event. In fact, one analyses by Citigroup predicts that Black Friday sales are going to make up only 10% of this year’s total holiday sales.
Cohen feels that the frenzy that has marked Black Friday sales since the 1980s is now fading away. He feels that this event is evolving and becoming more civilized and opportunistic.