If you checked out a mall or shopping center this past Black Friday weekend and found the crowds a far cry from the frenzied throngs of the recent past, it was not your imagination.
Store visits over the weekend were down 4.2%, according to RetailNext, a data service. The more manageable parking lots and checkout lines continued a years-long trend of the biggest store shopping burst of the year being diluted by holiday season deals coming earlier in November and more spending moving online.
Yet retailers, online and brick-and-mortar chains alike, had a blockbuster weekend, shaking off concerns that weaker consumer confidence last month would crimp spending. Consumers spent a record $68.9 billion between Thursday and Sunday, up 5.4%, according to research firm Consumer Growth Partners.
And the momentum looks set to continue on Cyber Monday: Salesforce has projected online sales will hit $8 billion on e-commerce’s biggest day of the year, up 15% from last year. (And it’s not just Amazon benefitting: as Fortune reported last week, Target, Best Buy and Walmart saw faster online sales growth than Amazon in the first half of November.)
Online shopping accounted for more than half of the weekend’s sales growth, according to CGP. In-store shopping rose at retailers that have done the best job melding e-commerce with their stores through efficient use of physical locations for order pickup, notably at Walmart, Target, and Costco Wholesale, CGP president Craig Johnson noted. (Not everyone enjoyed such a good weekend: CPG said apparel-chains and department stores were laggards, he said.)
The weekend’s winners were able to tempt online-to-store consumers to add additional items when picking up their online orders, said Joel Rampoldt, managing director consulting firm AlixPartners. And many of the weekend’s winners doled out deals earlier than ever this year to get shoppers into spending mode at their stores sooner, to test what promotions work and understand what consumers are looking for this year, the better to course correct earlier.
“When the dust settles, we’ll see an evolution where there’s less focus on a huge one-day sale on Black Friday, and more on a multi-day and multi-week [series of] continuation of sales,” Rampoldt said.
Another reason for the dilution of Black Friday crowds: consumers are embracing the idea of shopping after their Thanksgiving meal. Store visits on Thursday late afternoon (many top chains opened at 5 p.m. or 6 p.m.) rose 2.3%, but Black Friday visits were down 6.2%, according to ShopperTrak. (The National Retail Federation had forecast 40 million Americans would shop on Thanksgiving itself, up from 35 million last year.)
For all the talk of muted crowds, Black Friday remained the biggest shopping day of the year, though many Americans shopped on their phones or at their computers instead. Adobe Analytics said that Black Friday sales online hit a record $7.4 billion, the second biggest e-commerce U.S. shopping day ever after Cyber Monday in 2018.
The success of the weekend was not limited to large chains. On Small Business Saturday, an occasion to prompt shoppers to favor local businesses, shoppers spent $3.6 billion online, or 18% more than last year, Adobe said.
While the four-day weekend was good for the retail industry overall, it was clear shoppers aren’t being weaned from their addiction to deals, threatening profit margins. Coresight Research had analysts visit 32 retailers across the United States, with 25 offering promotions, and the firm’s researchers found discounts averaged 37% to 47%.
Clothing retailers generally felt the pain most acutely, as they have all year. “The intensity of promotions across the space feels heightened relative to last year,” Wall Street firm Cowen & Co wrote in a research note on Monday. It flagged PVH’s Calvin Klein brand and Under Armour among those offering larger-than-usual discounts.
At the same time, some apparel chains like Lululemon Athletica, whose gear is highly coveted, avoided the deep discounting trap.
Electronics were touted as the big winners in several notes from analysts, and Salesforce found the brands most mentioned on social media over the weekend were PlayStation, Nintendo, Apple, and Xbox.
With the biggest shopping weekend of the year behind them, it’s clear that the chains that have figured out how to successfully rejigger their business in the Amazon era and offer differentiated merchandise are thriving, while those that don’t are losing more ground.
“The retailers that are doing well will continue to do well over holiday, while those that are struggling will continue to struggle,” AlixPartners’ Rampoldt said.