Black Friday and Cyber Monday Takeaways

Question:  

How did this year’s Black Friday and Cyber Monday activity compare to last year?

Answer: Black Friday is the big shopping day after Thanksgiving, and Cyber Monday is a newer term coined by the National Retail Federation (NRF) in 2005. The surge in online shopping especially on the Monday after Thanksgiving, combined with quicker internet connections at work, and merchants wanting to entice holiday shoppers to bypass brick-and-mortar stores is the new trend. Shopping from the comfort of home is preferred by many who’d like to bypass standing in lines at retail stores. 

You likely noticed that your cell phone has been inundated with texts about Holiday sales. On a year-over-year basis (YOY) comparing sixty digital commerce companies, the discounts and promos indicate that most retailers are very interested in rightsizing and moving inventory and using promos to create urgency and activity. 

The Holiday shopping season appears to be off to a strong start. Big retailers including Target, Walmart, Amazon, and Wayfair, want to clear excess inventory, especially apparel. Sensormatic Solutions estimates retail foot traffic was up 19.7% for Thanksgiving Day so not all shoppers were eating pie and watching football at home. Demand appears to be fueled by promotions and discounting due to elevated inventories. 

The biggest upticks in year-over-year (YOY) promotions for digital companies were found with athletic brands and jewelry retailers. It’s too early to assume a strong fourth quarter given that much of the holiday season is still ahead, yet it’s an encouraging start. 

According to data from Salesforce for October and November, average selling prices were down 5% YOY for luxury handbags, down 7% for luxury apparel, a drop of 16% in general footwear and a 27% decrease for general handbags and luggage. These discounts are attractive to cost conscious consumers. In contrast, active specialty footwear was up 4%, meaning I’ll likely spend more for those exclusive sneakers on my grandson’s Christmas list. Lululemon didn’t advertise any special promotions though they did change their “We Made Too Much” section to “Black Friday” which is consistent with previous years. Hopefully, I’ll find a few bargains for my granddaughter at Skechers or Under Armour. 

Most companies stayed with last year’s promotional offers while others are attempting to manage high inventory and offer deeper discounts. According to Adobe Analytics, from Thanksgiving through the weekend, consumers spent approximately $24 billion online, 1.6% ahead of their forecast. Overstock and Chewy provided incentives to use their app and auto ship platforms. Promos were higher at Nike, Adidas, Dicks Sporting Goods. Companies like Under Armour, Foot Locker, and Lululemon kept promos close to last year’s levels. 

The NRF forecasts Holiday 2022 sales to grow 6-8% for $942.6-$960.4 billion. This is a deceleration versus growth of 13.5% in 2021, and 9.3% growth in 2020, but still above the 10-year average of increases of 4.9%. The above average growth of the past two years is attributed to strong demand from Covid stimulus checks, higher pricing, inventory constraints, lean promotions or discounts, and inflation. Growth is expected to slow as we go forward due to inflationary pressures and macroeconomic uncertainty. 

Another busy online shopping day is Green Monday which takes place on the second Monday of December which is the twelfth of the month this year. Green Monday refers to the environmentally friendly “green” money consumers will spend online rather than by visiting actual stores. 

With all the ads, texts, websites, and emails, try not to get overwhelmed. It can be helpful to make a list and check it twice to assist you in finding the best online deals rather than being swayed by emotion. A holiday budget can help you stay on track. Stay focused and shop accordingly.