Once again the lead up to Thanksgiving saw a chorus of consumer groups calling for a boycott of shopping on Thanksgiving, leading many retailers, including the Mall of America, to close on the holiday. That hardly stopped shoppers from shopping, especially those with a PC or smartphone! Sales reached new records each day from Thanksgiving to Cyber Monday, and it’s worth looking at the new patterns we see emerge, and what they mean for online retailers.
But first, let’s start with a fun facts because, well, who doesn’t like history? First, contrary to what you learned in school, Thanksgiving didn’t start with pilgrims and Native Americans breaking bread together (although to be fair, harvest festivals are as old as agriculture itself). Abraham Lincoln declared the need for a federal holiday following the battle of Gettysburg:
“I do, therefore, invite my fellow-citizens in every part of the United States, and also those who are at sea and those who are sojourning in foreign lands, to set apart and observe the last Thursday of November next as a Day of Thanksgiving and Praise to our beneficent Father who dwelleth in the heavens.”
Fun fact #2: Thanksgiving has been synonymous with consumerism since the Great Depression when FDR moved the holiday up a week to provide more shopping days before Christmas. Like many retailers, he hoped the extended shopping period would boost the economy. Public outcry forced him to move it back, but the tight association with shopping has held firm ever since.
Here are some important lessons to consider from Black Friday 2019:
#1: Black Friday is still a critical shopping day
Black Friday smashed online sales records according Salesforce, which tracked sales made by more than 500 million shoppers in 30 countries. 2019 Black Friday saw $7.2 billion in digital sales in the U.S. alone — a 14% leap over last year. In fact, Black Friday became the second-largest online shopping day in history, topped only by Cyber Monday last year, which saw $7.9 billion in sales.
#2: Many shoppers don’t wait for Black Friday
As the NY Times notes, “Black Friday shopping, online and in stores, really starts on Thanksgiving and lasts all weekend.” Shoppers spent $4.2 billion on Thanksgiving, about 14.5% more than on Thanksgiving 2018, according to Adobe Analytics.
More people had started their Black Friday shopping early by looking for deals online on Thanksgiving. At Costco, the website was slow so the store extended one-day online deals intended for Thanksgiving into Friday.
#3: Black November has replaced Black Friday
Black Friday deals now extend throughout the entire month of November, and that’s relevant to retailers for some important reasons. For instance, in the first week of November alone, consumers had completed 24% of their holiday shopping, according to a survey by the National Retail Federation — up 16% from a decade ago. In 2020, plan to start your holiday promotions in November, or miss out on a lot of early holiday sales.
#4: Black Friday is now Global
Black Friday is now a global event. This year the day brought in $40 billion globally, about a 24% increase over 2018. How did a shopping day so tightly correlated with Thanksgiving become an international phenomenon? According to USA Today, as American chain stores like Walmart expanded overseas they brought the shopping bonanza with them.
Black Friday sales can be found in many countries, with mom-and-pop and large retail chains participating. Even Israeli retailers are in on the event. As Haaretz reports, “Today Black Friday sales in Israel resemble the real thing. Discounts of 30% to 70% are offered on categories such as electronics, shoes and clothing, housewares, baby products, even pets. But “resemble” is the right word here.”
#5: Revenue is up because AOV is up
The average order value for the tracked online retailers also showed a welcome lift up 6% to $168. We’ve long said that with the right strategies, online retailers can boost average order value during the holiday season, as well as all gift-giving holidays. And, you can increase AOV through strategic promotions, such as tiered discounts, as we discussed in our Last Ditch Holiday Campaigns blog post.
This is something that our Chief Commerce Officer, Phillip Jackson, has covered in detail on his retail-focused podcast, Future Commerce. In Episode 132, Phillip and co-host Brian Lange discussed this phenomenon as it pertained to storied luxury brand Tiffany, and its acquisition by Sephora and Louis Vuitton’s parent company, LVMH. They were joined by renowned retail analyst Sucharita Kodali. (The segment begins at 0:59:00).
#6: Mobile is the rising star
According the Salesforce, “Thanksgiving Day purchases were primarily through mobile devices. Sixty percent of all digital orders came through a mobile phone yesterday, beating prior estimates. Digital traffic also topped over 70%, giving early indications that shoppers are ready to transition toward a mobile-only reality. Mobile is on its way to becoming a beacon of light as the driver for multichannel and multi-touchpoint engagements.”
Something Digital has been a participant of the Mobile Optimization Initiative (MOI) since its launch, and we’ve identified and shared many tops for mobile optimization. Check them out now to make the most of this holiday shopping trend.
#7: Omni-Channel is critical
While shoppers clearly love the convenience of online shopping, many don’t want to wait for their package to be delivered. Record numbers of them sidestepped the delays by placing their orders online and picking them up in-store — driving a 43% uptick in buy-online-pickup-in-store (BOPIS) orders.
RetailNext reports that “traffic [in malls] was down 2.1%, average transaction values dropped 6.7%, and overall sales declined 1.6%. Forbes agrees, predicting that the big winners of holiday shopping will be eCommerce and omnichannel retailers with strong mobile platforms, while the losers will be the physical retailers dependent on in-store traffic.
#8: Holiday sales are only as successful as your marketplace strategy
Finally, it’s worth considering a marketplace strategy to increase your holiday sales. The top five most-talked-about retailers: Amazon, Walmart, Target, Gamestop, Best Buy. For tips, check out our post on building a marketplace strategy.
If you have questions about Black Friday and how you can have a successful holiday season contact us.