News

Shades of Gray on Black Friday

BY Jeff Green

We’ve all seen the footage that’s become an annual ritual for media outlets reporting on Black Friday: long lines, stampeding crowds and frantic shoppers. But the real drama is how stores fare once the dust settles, and this year was no exception. The length of the lines isn’t the ultimate Black Friday metric; it’s the bottom lines for retailers around the country that tell the tale.

There was a lot of concern going into Black Friday about whether or not the numbers would be impressive this year. Earlier optimism about continued economic growth had been tempered in the preceding weeks by the continued political gridlock in Washington and by the emotional and economic impact of Hurricane Sandy. Were those worries well-founded? Depends on how you look at it, I suppose: Black Friday sales were actually down about 2%, but that’s far from the whole story. Overall, sales were actually up 2%-3% if you include the night before and the duration of the weekend.

To me, that’s the headline, and it’s obviously much more important that the overall weekend was a success than if the receipts on Friday alone were able to exceed expectations. But that dichotomy got me thinking about how Black Friday has evolved. As the discounts have gotten bigger, the store openings have gotten earlier (getting started earlier and earlier on Thanksgiving itself now), it’s clear to me that it’s not just about Friday anymore.

This annual milestone (which is almost to the point where it has become its own “holiday”) has become a bigger and bigger event, with Black Friday evolving into an entire weekend of promotions and retail excitement. I don’t think it’s accurate or helpful to view Black Friday as a discrete one-day event anymore. From a strictly numerical perspective, the earlier start seemed to pay off, as a measureable percentage of the overall retail sales for the weekend took place on Thursday night in that 8 p.m. to 12 a.m. time frame.

While that expansive new definition of Black Friday might feel like a good thing for retailers going forward, the way it is happening does give me pause. I can’t help but wonder if all of the “door buster” sales that were driving the Thanksgiving night activity might be less than positive over the long haul. Specifically, because door busters and deep discounts are typically loss-leaders, they count on cross-shopping and impulse buys during the same visit to drive profits. But with the late night starts, after a long Thanksgiving, browsing, lingering and real shopping seems significantly less likely to me — and probably to anyone else who has just feasted on turkey, mashed potatoes and stuffing. In my observations, Black Friday fanatics got in, got their targeted deals, and got out.

Retailers are probably going to have to do some serious thinking about this structural/timing issue in the future. They also need to figure out if it is really worth it to them to open so early just to hand out deep discounts and see traffic slow the next day. For example, Target and Best Buy (and I’m sure most big retailers who stayed open all night) were absolutely dead in the early morning hours. Much of this stems from the need to be competitive in an environment where other big-name brands and retailers are all opening earlier and earlier. Making those strategic decisions will require retailers to take a careful look at who is snapping up headline door buster sales — and what else they bought. There is also an interesting dynamic here with regard to Cyber Monday, which has itself become the other bookend to this new retail holiday. There are some fascinating implications here for what the Black Friday-Cyber Monday relationship tells us about the future of brick-and-mortar, and what the retail real estate implications of that evolution will be. I’ll explore that in a little more detail after the holiday shopping season is over.

Does this agree with your view from the front lines of Black Friday 2012? Do you think retailers are gaining anything by opening earlier, or actually hurting overall profits? We’d love to hear your thoughts through a comment below or you can contact me directly at [email protected].


Click here for past columns by Jeff Green.

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FINANCE

comScore: Green Monday expected to top potentially heaviest online spending week ever

BY Marianne Wilson

Reston, Va. — For the holiday season-to-date, $26.6 billion has been spent online, up 13% versus the corresponding days last year, according to comScore. The firm predicts that Green Monday (Monday, December 10, 2012) is likely to be one of the heaviest online spending days of the season and a headliner for what is expected to the busiest online spending week on record.

The most recent week saw three individual days eclipse $1 billion in spending – Monday, Dec. 3 ($1.117 billion), Tuesday, Dec. 4 ($1.362 billion) and Wednesday, Dec. 5 ($1.051 billion) – bringing the total number of billion dollar spending days for the season to seven.

“Despite posting three consecutive billion-dollar spending days and five in excess of $950 million, this past week saw a noticeable softening in e-commerce momentum as growth rates dipped into single-digits after beginning the season in the mid-teens,” said comScore chairman Gian Fulgoni. “However, we expect this lull to be a temporary effect having more to do with the extended shopping calendar this year with two additional shopping days between Thanksgiving and Christmas, rather than weakening consumer fundamentals. This upcoming week led by Green is likely to be the heaviest online spending week in history with a realistic chance of delivering five billion-dollar days.”

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REAL ESTATE

Report: Sephora to open 50 stores in Latin America by 2016

BY Staff Writer

New York — Sephora plans to open 50 stores in Latin America by 2016, the San Francisco Business Times reported.

Sephora opened its first Latin American store in 2011, in Mexico City. It was followed by locations in Puebla and Guadalajara and another one in Mexico City in 2012. It plans to open an additional five locations in the country in 2013.

It is also expanding in Brazil — the third largest beauty market in the world — with four new stores this year and another six in the pipeline, according to the report.

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A.Smith says:
Mar-21-2013 06:57 am

A good news to the shoppers
A good news to the shoppers and a big success to the store as well. With this expansion, we the customers will have more options to choose as to where we are going to shop. - JustFab

A.Smith says:
Mar-21-2013 06:57 am

A good news to the shoppers and a big success to the store as well. With this expansion, we the customers will have more options to choose as to where we are going to shop. - JustFab

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