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Evaluating Black Friday & Cyber Monday Trends

Date: December, 2015 --

Evaluating Black Friday & Cyber Monday Trends

Black Friday has come and gone in the US with a resounding, “So what?”.  In the UK, the other major observer of this “tradition”, merchants also saw an evolution of the event. A comparison will show that there are important differences in the separate maturations of this critical retail event and, so far, different consumer behaviors worth examining.

Recall that Britain does not celebrate Thanksgiving (although they might like to, since the Pilgrims were considered a radical and dangerous bunch) and rather than treat it as a one day occasion, the British retail industry has begun to stretch the event across the week-long period in order to better spread out the order intake and fulfillment load. This is no doubt a result of 2014 experiences which left many companies, and their delivery agencies, nearly imploded by the crush of orders.  

The stretching out of the event seems to have spread sales and reduced pressure somewhat, with overall sales continuing to increase.  Some companies, such as the “everything” “department” store  House of Fraser, observed that sales on Thursday were higher than on Black Friday of the previous year, with Friday sales this year continuing to increase. Their Chief Customer Officer reported that on Friday they took in 120 orders per minute and by 4 PM trade was up by 40% over 2014! Staggering numbers especially when one recalls that Thursday wasn’t a holiday.

Acknowledging that this clearly is not just a one, or even two day event, some retailers have dropped the “Friday” altogether. The electronics and household appliances behemoth Currys labeled its promotional day a “Black Tag Event”. This may or may not have contributed to its making 8 sales per second and selling 30 television sets every minute of the day.  Regardless of what it’s ultimately called, it is clear that this seasonal shopping event is here to stay.

It’s interesting to note that many UK merchants offer free delivery, even on export orders.  House of Fraser offers US buyers free shipping on orders above £120 ($170). Men’s, women’s, and children’s clothing house New Look will deliver to the US for free on orders over a mere £55 ($78). Whether this had anything to do with increasing revenue for one day by 100% was not disclosed. And the cosmetics company Feelunique ships to the US for free on orders over $15. Yes, 15 dollars.

As in the US, ‘Click and Collect’ in-store pickup has its fans as well. The multinational DIY and home improvement retailing company B&G noted that 60% of Friday’s online orders were for store pickup. This perhaps suggests the season is a fix-up and decorate time for the coming Christmas celebration season and folks wanted their tools for a Saturday start, or perhaps it reflects that the delivery fee on a gallon of paint was pretty steep.

Of course Click and Collect is also popular, although not overwhelmingly so, with US DIY companies such as Loew’s and Home Depot.  But the 60% number suggests that shoppers in the UK are still well-served by nearby stores accessible by a short drive or on foot, which is not the case in  much of  the US, where nearly everyone, everywhere, must hop in a car to get to their favorites stores.

So the UK’s merchants appear to have succeeded in following the consumer’s move to online ordering and have to a large extent succeeded in beginning to stretch out shopping over a longer period. 

In the US, the industry saw a decrease in business in stores with a corresponding increase in online orders. Sales from brick-and-mortar stores dropped 10% over last year on both Thanksgiving Day and Black Friday. 

Without question eCommerce is growing at a feverish rate.  On Thanksgiving Day, all the folks sitting at home waiting for the turkey to be served ordered online 32% more merchandise than in 2014, in fact almost as much as they purchased in-store, $1.73 billion vs $1.8 billion. 

Friday was the day for brick and mortar as sales reached $10.4 billion against a 14.3% increase online of $2.7 billion. 

 Cyber Monday saw even more spending than on Friday with $3 billion in sales, a 16% increase over last year.  

Perhaps the most interesting statistics during this period relate to the chosen online medium.  On Friday 33% of the orders were placed via a mobile device.  On Cyber Monday, on the other hand, only 26% of the $3 billion in sales came from mobile. Perhaps the office computer still has the edge on speed? 

From all this we can reach a few important conclusions.  The first would appear to be that shopping in the stores is no longer the thing to do, except in a few exceptional instances. The days of door-crushing mobs are past us as retailers absorb the lessons of pricing/demand calculations and continue to expand the period in which they offer discounts. This trend appears stronger in the US than in Great Britain.  

The second is the inexorable movement toward online shopping and purchasing. As in the UK, customers want to see what’s available “everywhere”, and they’ll buy online when they find what they want. Delivery options and cost subsidization are also important factors to assess. 

The third is the extension of the purchasing period beyond a one or two day event.  We perceive a trend to a “period” of intense marketing and shopping starting pre-Thanksgiving and continuing into Cyber Monday in both the US and UK markets.

In the US, we may well see “the old days” return as more and more stores conclude they can give their employees Thanksgiving Day off to be with their families, like other Americans who are not in the retail business.  If people are going to shop that day, they’ll use their mobile or tablet or whatever, no longer being tethered to the office desktop. This will remain a uniquely US characteristic.

In summation, Black Friday will continue to grow as an important shopping day for both the Americans and the British, but an increasingly large portion of that traffic will be online. “Black Friday” will fade to a marketing “opportunity” justifying some well-targeted efforts, but we won’t see people getting trampled anymore. 

In addition, it appears possible that “Cyber Monday” will soon fade from memory.  Perhaps it will become a short-lived tradition that was established in the day when you had to use the company’s high speed Internet connection to buy the stuff you saw at the mall over the week-end.

Finally, it bears noting that even government has gotten into the promotion business and some unexpected government organizations are using Black Friday as a promotional opportunity of their own.  A significant number of State parks opened their gates for free admission on Black Friday in Minnesota, Missouri and California. Missouri generously offered free over-night camping on Friday night. And recall that California’s park system is huge and diverse: 47 facilities from the Mexican border to the Oregon state line, from the Pacific Ocean to the spectacular mountain ranges of both the coast and inland. Now there was a good deal!

Whatever the future brings for US or UK merchants, it appears to us here at Data Services, Inc. that your need for accurate data, appropriately organized and analyzed will only grow.  Black Friday will remain as a very, very important sales event, retail-originated or not, and Cyber Monday will still have its own unique flavor.  But we know that all these days demand accurate and current data on your clients, which we specialize in giving you every day of the year.  

We wish you very successful and Happy Holidays!