Black Friday is Back!
Well, another Black Friday has come and gone. And, much to the surprise of many (myself included), it did so with a bang. General consensus is that the Black Friday sales bonanza was a rousing success, and the numbers certainly support that: ShopperTrak reported that Black Friday sales increased 6.6% over the 2010 numbers, with a record-breaking $11.4 billion in purchases. More people were out and about — foot traffic reports show an increase of about 5% over last year, which is good news for the brick and mortar guys. While I agree that there are lots of reasons to be optimistic about these results, I don’t think it will necessarily translate into a blockbuster holiday season overall.
Behind the raw numbers, what was interesting to me was how the extended hours really did seem to drive up sales. As you know, I didn’t think retailers opening on Thanksgiving night would mean more sales. I simply thought it would mean the sales would be spread out over more hours. But, I think the commitment retailers showed in marketing and advertising their extended hours really worked! Given its success, I think we’ll see this become the new normal going forward.
I did venture out myself — as I often do — to observe the crowds and see what was happening. I was not out and about at midnight, but, from what I gathered by talking to store personnel, the heaviest traffic seemed to hit in three distinct waves: The first being at midnight on Thanksgiving night, the next at 9:00 a.m. on Black Friday morning, and another big burst Black Friday evening. That was interesting to me. It would seem that retailers were successful in their efforts to expand the shopping windows of opportunity.
One thing I saw this year that I believe helped drive the numbers, was more people shopping for themselves. This used to be common when consumers had more discretionary funds. Thanks to the downturn, we haven’t seen this in recent years. I think the fact that we’re starting to see it again now, is a good sign. Another good sign was the raw retail magnetism of electronics. This phenomenon continues to blow me away. On my Black Friday adventure, I stopped in at the local Target and found that their electronics department was packed with people even when the rest of the store was experiencing quiet lulls. And it wasn’t just packed with teenagers scouring for the latest tech toys. From TVs to gaming systems, electronics have really become popular gifts for the whole family. I think it’s also worth noting that Cyber Monday sales continue to grow: overall, online sales were up by about 12% and continue to grow.
What I think has gone a bit unnoticed in all of the hoopla is the fact that retailers have done a great job consolidating store locations, modifying store sizes and controlling their inventories. They’ve done what they needed to do, and as a result, enjoyed a record-setting performance on one of the most important shopping days of the year.
Factoring all of this in, I’m comfortable tweaking my holiday shopping prediction: Originally, I said we’d see a flat to 2% gain this year (and, honestly, I was leaning more toward flat). I wasn’t quite as optimistic as some of the other retail analysts, but I’m thinking we may be closer to that 2% mark. That said, I think it’s still too early to get that excited. We have to remember, because of the early start to the season, we likely will not see the kind of sustained performance we would need to make this a truly great holiday shopping season. And, too, we all know that a great Black Friday does not automatically mean a record-breaking holiday season overall. With October and November sales coming in fairly high, it is likely we’ll see December sales that are not. As always, it will be interesting to see just how this holiday season plays out.
What do you think? Please make a public comment below or feel free to e-mail me privately at [email protected].
Jeff Green is president and CEO of Phoenix-based Jeff Green Partners (jeffgreenpartners.com), a leading consulting firm specializing in retail real estate feasibility, retail expansion planning, medical retail planning, location analysis and commercial land use.
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