November 26, 2007
Turkey Day, Black Friday, Cyber Monday… It’s All Good Online
The holiday is off to a strong start for online merchants with sales on Thanksgiving and Black Friday up 29 percent and 22 percent respectively versus last year, according to comScore. Online sales for November leading up to Thanksgiving have risen 17 percent, the research firm reports.
“Online spending on Black Friday has historically represented an early indicator of how the rest of the season will shake out. That the 22 percent growth rate versus last year is outpacing the overall growth rate for the first three weeks of the season should be seen as a sign of positive momentum,” said Gian Fulgoni, chairman of comScore in a press release.
“Based on the growth rates we’ve seen so far this season and historical consumer behavior patterns, we would expect Cyber Monday sales to be even stronger than Black Friday’s and to exceed $700 million. While this would make it the heaviest online shopping day on record, we can expect to see even stronger days ahead as the 2007 shopping season progresses into December,” Mr. Fulgoni added.
According to comScore, a number of product categories have taken sales to a new level this year. Since November 1, for example, video game consoles and related products have posted a 134 percent sales increase versus the same period last year. Furniture, appliances and equipment (36 percent), consumer electronics (21 percent), sports and fitness (20 percent) and apparel and accessories (17 percent) are all doing well as the holiday season heats up.
Discussion Questions: Do you see Black Friday performance as a indicator as to how well online will perform this holiday season? Do you see Cyber Monday as having some special significance as far as how well online will perform over the course of the holiday season? What are best-in-class retailers doing to succeed online during this critical sales period?
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TV reports in our area suggest that while there were crowds galore, and registers were busy on Friday, the actual dollar volume of spending was down from last year.
My next door neighbor and her sisters went out again this year at the crack of dawn, met up and shopped a bit at the local mega mall, said they had a big breakfast together, shopped some more and then ended the afternoon with “a couple glasses of wine.” She reported that they had a lot of fun, love the tradition, and didn’t buy a lot. They did, she said, get some good ideas about what family members might want to open on Christmas morning, which she will try to find online so it can be a surprise.
Teen-age daughter and her friend left home at 5:15 AM and, over the next 7 hours, hit three malls within a 20 mile geographic area and bought a total of one book and one t-shirt top, but “ran into a lot of friends.” These kids don’t have credit cards and didn’t want to carry much cash in such crowds. They plan to shop after the holiday both in-store and online using gift cards they will (hopefully) receive.
Yes, there will be a lot of e-shopping this year. Brick and mortar retailers have done so much to create the black Friday “circus event” mentality in the media that they have made the “event” splash bigger than the “buying” part.
Our family has bought all (that’s every single thing) of their Holiday presents on line since ’98. That’s not a bragging point, just a strong indication that once you try doing that, you’re not going back out there to brutal lines and crabby store clerks any time soon. You may go shopping just for fun at the nearest lifestyle center after that, but oh, how quickly you realize that the actual act of mass gift shopping is so much more enjoyable and relaxed when you’re in your pajamas! This, in turn, then further fuels the online fire. No more retail battles for you.
All of us that study retail keep waiting for the tipping point moment for online sales, befuddled at the low % to total retail so far…but…as the increases grow logarithmically, apparently we won’t have to wait much longer.
So, to answer the question, as online sales increase in importance, the traditional numbers for traditionally higher volume days (closer to Christmas) will shrink. It’s only a matter of time–or mass epiphany, that is.
Sales results, even when they’re excellent, don’t equal profits. Loss leaders are always the best traffic and sales generators. Free shipping online and giveaway 5 AM doorbusters at the stores generate excitement, not necessarily profits. The best short-run external events that could help retailers this Christmas: sustained cold weather and lower interest rates.
As online holiday sales grow as a percentage of overall holiday spending, it makes it more and more difficult for traditional bricks ‘n’ mortar retailers to make their numbers. A strong kickoff for online retailers may portend a strong season, or merely that the market share of traditional retailers is continuing to erode.
Black Friday was an online success for several reasons. A couple of those were: 1. Retailers were offering online only specials and free shipping. Therefore, why spend the gas and go through the horrific hassle of going out. 2. This year, with the economy down and people trying to squeak every dollar out of their Christmas spending, it just made sense to shop online, since retailers have gotten better on their websites with showing pictures–and enlarged pictures–making it easier to shop and find the right size and color…and shipping more accurately. Many sites have added user ratings that have proven useful to buyers.
The trend of the future!
The results for Black Friday are good but in some past years, a good Black Friday didn’t necessarily lead in to a great finish for the holiday season, so time will tell. In any case a good Black Friday cannot be a bad thing. Hopefully, retailers have stocked up appropriately for the right amount of demand, with ample variety and replenishment capability.
Online sales on Black Friday certainly get a push from stores placing their sharpest “doorbuster” items on their websites, not just in their brick & mortar locations. More and more customers figure out that they can get the same deals online without having to drag themselves out of bed at 4 am, winding up disappointed by lack of supply. This being said, product availability is an issue with online “early birds” as well. One major retailer ran out of most sizes and colors of cashmere sweaters on its website early Friday morning.
So, I’d advise being careful about reading too much into Friday’s results. Better to see how “Cyber Monday” and the rest of this week play out, but the convenience of online shopping should continue to drive accelerated share this season.
I’m not sure because the briefing was about cyber sales while the question was all sales. I don’t think cyber sales are a good indicator but I do think snail store sales volume is.
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TV reports in our area suggest that while there were crowds galore, and registers were busy on Friday, the actual dollar volume of spending was down from last year.
My next door neighbor and her sisters went out again this year at the crack of dawn, met up and shopped a bit at the local mega mall, said they had a big breakfast together, shopped some more and then ended the afternoon with “a couple glasses of wine.” She reported that they had a lot of fun, love the tradition, and didn’t buy a lot. They did, she said, get some good ideas about what family members might want to open on Christmas morning, which she will try to find online so it can be a surprise.
Teen-age daughter and her friend left home at 5:15 AM and, over the next 7 hours, hit three malls within a 20 mile geographic area and bought a total of one book and one t-shirt top, but “ran into a lot of friends.” These kids don’t have credit cards and didn’t want to carry much cash in such crowds. They plan to shop after the holiday both in-store and online using gift cards they will (hopefully) receive.
Yes, there will be a lot of e-shopping this year. Brick and mortar retailers have done so much to create the black Friday “circus event” mentality in the media that they have made the “event” splash bigger than the “buying” part.
Our family has bought all (that’s every single thing) of their Holiday presents on line since ’98. That’s not a bragging point, just a strong indication that once you try doing that, you’re not going back out there to brutal lines and crabby store clerks any time soon. You may go shopping just for fun at the nearest lifestyle center after that, but oh, how quickly you realize that the actual act of mass gift shopping is so much more enjoyable and relaxed when you’re in your pajamas! This, in turn, then further fuels the online fire. No more retail battles for you.
All of us that study retail keep waiting for the tipping point moment for online sales, befuddled at the low % to total retail so far…but…as the increases grow logarithmically, apparently we won’t have to wait much longer.
So, to answer the question, as online sales increase in importance, the traditional numbers for traditionally higher volume days (closer to Christmas) will shrink. It’s only a matter of time–or mass epiphany, that is.
Sales results, even when they’re excellent, don’t equal profits. Loss leaders are always the best traffic and sales generators. Free shipping online and giveaway 5 AM doorbusters at the stores generate excitement, not necessarily profits. The best short-run external events that could help retailers this Christmas: sustained cold weather and lower interest rates.
As online holiday sales grow as a percentage of overall holiday spending, it makes it more and more difficult for traditional bricks ‘n’ mortar retailers to make their numbers. A strong kickoff for online retailers may portend a strong season, or merely that the market share of traditional retailers is continuing to erode.
Black Friday was an online success for several reasons. A couple of those were: 1. Retailers were offering online only specials and free shipping. Therefore, why spend the gas and go through the horrific hassle of going out. 2. This year, with the economy down and people trying to squeak every dollar out of their Christmas spending, it just made sense to shop online, since retailers have gotten better on their websites with showing pictures–and enlarged pictures–making it easier to shop and find the right size and color…and shipping more accurately. Many sites have added user ratings that have proven useful to buyers.
The trend of the future!
The results for Black Friday are good but in some past years, a good Black Friday didn’t necessarily lead in to a great finish for the holiday season, so time will tell. In any case a good Black Friday cannot be a bad thing. Hopefully, retailers have stocked up appropriately for the right amount of demand, with ample variety and replenishment capability.
Online sales on Black Friday certainly get a push from stores placing their sharpest “doorbuster” items on their websites, not just in their brick & mortar locations. More and more customers figure out that they can get the same deals online without having to drag themselves out of bed at 4 am, winding up disappointed by lack of supply. This being said, product availability is an issue with online “early birds” as well. One major retailer ran out of most sizes and colors of cashmere sweaters on its website early Friday morning.
So, I’d advise being careful about reading too much into Friday’s results. Better to see how “Cyber Monday” and the rest of this week play out, but the convenience of online shopping should continue to drive accelerated share this season.
I’m not sure because the briefing was about cyber sales while the question was all sales. I don’t think cyber sales are a good indicator but I do think snail store sales volume is.