- Tom Silva
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2011 Black Friday Pays Off for Retailers
A record 226 million Americans shopped in stores and online during the four-day Thanksgiving holiday, an increase from 212 million last year, according to estimates by The National Retail Federation (NRF). These eager shoppers also spent more: The typical holiday shopper spent $398.62, an increase from the $365.34 reported last year. Approximately 24 percent of Black Friday shoppers were waiting at stores for a midnight opening, a 9.5 percent increase when compared with 2010 when only a few stores were open at that time. Some 37 percent of midnight Black Friday shoppers were in the 18-to-34 age group. “Black Friday has evolved from an early morning shopping activity to a late night entertainment,” said Ellen Davis, spokeswoman at the NRF. “A lot of people stayed up until 1 a.m. or 2 a.m. to go shopping, and then went to bed.”
Sales soared 16.7 percent over the same period last year to $52.4 billion, according to the NRF. “American consumers are taking a deep breath and making the decision that it’s okay to go shopping again, in spite of high unemployment and uncertainty over the stock market and housing market,” Davis said.
The results for the initial holiday shopping weekend are proof that retailers’ efforts to tempt shoppers during the weak economy are working. Some like Wal-Mart and J.C. Penney are making a stronger push online to compete more effectively with rival Amazon.com. Major chains like Macy’s, Target, Best Buy opened their doors at midnight on Thanksgiving evening instead of the pre-dawn Friday hours of years past. The question remains whether retailers’ will be able to hold shoppers’ attention throughout the rest of the season, which can bring in 25 to 40 percent of a merchant’s annual revenue. Americans remain driven by deep discounting and they’re conscious of their spending budgets.
Even as they spent money, shoppers said that with the high price of gas and other goods, this is not a good time to spend, according to the Bloomberg Consumer Comfort Index. Retail sales grew a paltry 0.5 percent in October, slowing from 0.7 percent in September, according to the Department of Commerce. In the weeks just prior to Black Friday, ShopperTrak reported sales had risen 3.6 percent during the week of November 12 and 3.8 percent during the week of November 19, compared to last year.
Analysts were surprised by the number of shoppers and the amount of spending; they had expected sales to be dampened by the nine percent unemployment rate, the high costs of gas and concerns about fiscal upheaval in Europe. It is uncertain whether retailers will be able to maintain the early momentum for the rest of the season. “One swallow does not a holiday season make. After the deepest recession in decades, the solid Black Friday weekend is welcome news, but we’re only in the second quarter of a long playoff game,” said Craig Johnson, president of the consulting firm Customer Growth Partners.
According to ShopperTrak founder Bill Martin, “This is the largest year-over-year gain in ShopperTrak’s national retail sales estimate for Black Friday since the 8.3 percent increase we saw between 2007 and 2006. “Still, it’s just one day. It remains to be seen whether consumers will sustain this behavior through the holiday shopping season.”
On the whole, holiday spending is expected to grow by a fairly small 2.8 percent to about $466 billion, according to the NRF. For now, experts agree that retailers will likely have to continue to discount to get shoppers to spend. “The big question is: How do you close the season?” said Hana Ben-Shabat, a partner at A. T. Kearney’s retail practice. “This is a very promotional driven shopper.”
American shoppers spent $816 million on Black Friday without leaving the comfort of their computer chairs, a 26 percent increase over 2010, according to ComScore data. The results reinforce numbers released by IBM Coremetrics that showed online sales on Black Friday grew by 24.3 percent compared with the same period in 2010. Approximately 50 million shopped online Friday, a 35 percent increase over last year, ComScore reported.
“Each of the top online retailers generated significantly greater Black Friday activity compared to last year,” ComScore Chairman Gian Fulgoni said. “Amazon.com once again led the pack, with 50 percent more visitors than any other retailer, while also showing the highest growth rate versus last year. However, it is telling that the top multi-channel retailers also showed strong growth in visitors, demonstrating the importance of the online channel to the retail industry as a whole.” Amazon, Wal-Mart and Best Buy all reported double-digit percentage gains over last year.