Holiday shopping shifts emerging
Early reports of Thanksgiving through Black Friday shopping are in and the results are mixed.
A CNET article titled “Did Thanksgiving and Black Friday online sales soar or slip?” notes that data from IBM show strong growth in online sales, but the National Retail Federation says shoppers spent less money online and in stores.
IBM’s 2014 Black Friday Report notes that Thanksgiving Day online sales rose 14.3 percent over 2013 and that Black Friday increased 9.5 percent from last year. However, the average orders for both Thanksgiving ($125.25, down 1.8 percent from 2013) and Black Friday ($129.37, down 4.4 percent) were lower.
And, while Black Friday sales were 63.5 percent higher than those on Thanksgiving Day, it still represented a decline from 2013 when sales were 70 percent higher. IBM believes Thanksgiving Day online sales ate into Black Friday sales.
The NRF, which originally predicted that sales would be up on this busiest shopping weekend of the year, has since reported that Thanksgiving weekend and Cyber Monday shopping were not as bright as originally predicted, with fewer shoppers and less spending. It estimates holiday weekend sales slumped to $50.9 billion, down from $57.4 billion last year. That comes as a big surprise as many were expecting lower oil prices to increase retail spending.
We commend the NRF for taking the lead on conducting consumer surveys to help retailers better understand current market conditions. Reviewing the data, it has identified three factors it believes influenced Black Friday shopping:
1. Retailers started holiday discounts even before Thanksgiving and Black Friday so consumers did not have to wait. This reduced the urgency to shop on these days. This is part of a changing trend and soon these days may not have the significance they once did. Online shopping is providing more transparency in pricing and deals are continually offered. Since it costs businesses more to have their team work on holidays, it will make less sense if these shopping days do not generate the significant sales hikes they have in the past. They may become more like other holiday sales, such as Presidents Day and the like.
2. The economy is improving and people are not having to pinch pennies as much as before. With more jobs being created and gas prices being lowered, consumer confidence is rebounding. (Other reports note that coming out of the recession, people are more concerned about savings and are electing to save more.)
3. Consumers are more savvy. The recession changed how consumers shop. Now they may be waiting to buy closer to Christmas knowing there will be continued deals and discounts.
The NRF’s Cyber Monday Expectations Survey found that more than 126 million shoppers (52.3 percent) were expected to shop online on Cyber Monday. It sounds impressive, but the pre-Cyber Monday survey indicated that shopping expectations were already down by 4.7 million from 2013 expectations of 131.6 million.
Yet, more retailers recognized the importance of this day and how mobile devices are changing the landscape. They were proactively making shift too.
Shop.org’s July eHoliday survey found that roughly 7 in 10 retailers polled (69.1 percent) said they invested in optimizing their mobile websites prior to the holiday season (up 57.4 percent from last year). This survey also found that 97.6 percent of online retailers polled said they would have Cyber Monday deals.
The NRF views the holiday season shopping as a “marathon and not a sprint” and believes its annual holiday sales forecast of 4.1 percent growth over last year is still possible.
All hope to see growth this holiday season and consumers are certainly benefitting from the tremendous discounts and specials offered. Please continue to shop local and “Buy Maui First.”
* Pamela Tumpap is president of the Maui Chamber of Commerce.