The 2020 edition of Black Friday did not feature the usual scenes of bustling stores and shoppers lined up outside of discount chains and electronics retailers. Instead, most people bought it online, if at all.
Crowds in the city’s malls and shopping districts were relatively rare during the holiday weekend amid rising coronavirus cases and warnings from the Centers for Disease Control and Prevention to avoid large groups. The big chains closed on Thanksgiving Day, after years of opening that day. And many Americans shopped before the weekend even began, drawn by sales that began in October.
Morgan Stanley analysts estimated that overall Black Friday sales for retailers fell 20% from a year ago, based on early reports of falling in-store traffic and increasing online sales. Consumers spent $ 9 billion online on Friday, an increase of 21.6 from a year ago and the second-highest figure on record for online retailers, according to Adobe Analytics, which analyzes 80% of online transactions of the 100 largest US online retailers. The company said online sales reached $ 23.5 billion in the four-day period from Thanksgiving to Sunday, up 23% from a year ago.
“It wasn’t Black Friday, it was Dark Friday in stores,” said David Bassuk, global co-director of retail practice at AlixPartners, a consulting firm. “It’s such a stark contrast to the years gone by. The stores really were ghost towns.
The first results from the weekend, which has traditionally kicked off holiday shopping in the United States, show just how disrupted the season is by the pandemic. Major retailers started offering deals long before Halloween, a change that was amplified by Amazon’s decision to hold its annual Prime Day event in mid-October. Consumers were encouraged to buy early to avoid shipping delays. The chains have replicated offers once limited to stores on their websites and canceled visits with Santa Claus to minimize the crowds.
Americans were already spending online before the pandemic, but the crisis has accelerated the trend. About 59 percent of shoppers had started holiday shopping by early November of this year, the National Retail Federation estimated. Pedestrian traffic fell 52% on Friday, according to data from Sensormatic Solutions.
“The ability to advance the holidays may persist with us,” said Simeon Siegel, retail analyst at BMO Capital Markets. “It had been a long time since Black Friday was only three in the morning on Friday. Black Friday was already extended until early November, it just happened in October as well.
During earnings calls in November, several retail executives said they were unsure how much holiday shopping actually took place in October and early November. Matthew Bilunas, CFO of Best Buy, said, “It’s really hard to predict exactly how much was pulled” in the third quarter.
Most retailers operate on a schedule where the fourth quarter begins in November and ends in January, in part to fully capture the holiday shopping season.
“We believe the buying season will be extended,” said Brian Cornell, CEO of Target, on another call. “We’re going to see very different buying patterns. We don’t expect to see these big spikes during Black Friday and on weekends. “
Monday Sales – known as Cyber Monday since it was concocted in 2005 – should exceed those of Friday.
But as consumers flocked to the online offerings, Mr Siegel said many retailers have carefully managed inventory and promotions and are largely maintaining pricing compared to 2019.
“People have gotten used to the door clasps and the ever-increasing promotions,” he said. “The reality is that in most companies, headline promotions are, at best, stable compared to last year.”
The bigger question for retailers is how increasing online sales can eat away at their profits as they have to spend the extra money on shipping and processing returns. Black Friday was traditionally seen as the day when retailers went from being in the red to profitable, or in the dark, for the year.
“The idea of retailers going black on Black Friday has also evaporated,” said Mr. Bassuk of Alix Partners. “Yes, there is more volume, but as that volume goes online it becomes more expensive for retailers.”
While the number of shoppers visiting just about every store on Black Friday was down significantly from previous years, those who ventured out were not there to shop.
Craig Johnson, president of Customer Growth Partners, a retail research firm, said retailers have experienced higher “conversion” rates, which means more shoppers in stores have actually made purchases than in previous years.
“This is a trend we expect to see this Covid Christmas,” Mr Johnson said in an email.
While this year’s results have prompted some experts to portend the death of Black Friday, Mr Siegel is among analysts who view 2020 as an outlier, predicting that shoppers will return to stores once they feel safe. to do.
“The pandemic will leave us with a lot of new traditions, but it will not erase all of the past,” he said.
The remainder of the holiday shopping season will be watched closely as a barometer of the US economy. Millions of people are still out of work or have been forced to work part time. Aggregate consumer spending, which powers up to two-thirds of economic activity, has slowed in recent months with the expiration of some emergency public spending programs.