Black Friday & Cyber Monday Are in the Rearview — What Retailers Need to Do Now

All signs suggest Thanksgiving weekend ushered in the kickoff to the holiday shopping season that retailers — and their biggest stakeholders — had long awaited.

Early reads show blockbuster spending both online and in-store over the four-day Thanksgiving weekend as fashion firms cashed in on what the National Retail Federation predicts could be a $721 billion pie. (The NRF expects 2018 holiday retail sales to rise between 4.3 and 4.8 percent in November and December over the same period last year for a total of between $717.45 billion and $720.89 billion.)

But on the heels of a rough few days on Wall Street — investors last week sent the Dow tumbling more than 600 points and ditched retail stocks over fears consumer spending during the holidays would fall short — experts agree that retailers looking to end the race strong will need the right mix of effective strategies in their arsenal.

“It comes down to [two things]: You have to know your customer and speak to them, and you must transition and have newness flowing all the time,” said Susquehanna Financial LLLP analyst Sam Poser, noting that companies that become hyperfocused on heavy promotions will forfeit strong profit margins.

Poser listed beleaguered athletic brand Under Armour as among the brands he saw become “too promotional” over the weekend but cited strength at Nike, Foot Locker, Nordstrom and Steve Madden.

B. Riley FBR analyst Jeff Van Sinderen said that into the holidays, he expects omnichannel technology to continue to power online and traditional retailers — many of which found a life raft in services and platforms such as buy online, pick up in store after digital disruption and the rapid rise of Amazon significantly threatened their sticking power around 2015 and 2016.

“I don’t think we can overemphasize the fact that companies need to continue to develop and hone omnitech capabilities,” Van Sinderen said, adding that he expects deep declines in brick-and-mortar traffic to ease after “many years” of pressure.

As forecasted, Thanksgiving weekend saw digital-savvy traditional retailers (Nordstrom, Walmart, Target and Foot Locker are examples) employ a mix of distribution strategies, while consumers responded in kind by utilizing a diverse array of platforms and services — with mobile shopping in particular enjoying a huge uptick. (Smartphones drove a record 54.4 percent of traffic to retail sites on Thanksgiving Day, and they were responsible for 36.7 percent of all e-commerce sales, according to data from Adobe Analytics posted last week.)

To that end, Nitin Mangtani, CEO of mobile commerce platform PredictSpring, suggests brands are retailers that will stand out in 2019 “are the ones that build elevated mobile experiences in-store and online.”

“Commodity shopping experiences are better served by marketplaces like Amazon,” he said. “In order to attract a loyal following and drive repeat purchase, brands must invest in native mobile app experiences for superfans that go beyond ‘me too’ functionality. Similarly, [they] must continue to make investments in retail store technology.” (Despite the gains in online shopping, Mangtani noted stores still represent 80 percent of retail sales.)

Even after they’ve engaged all their best tactics, analysts said retailers still ought to brace for the lull that will likely come between Black Friday and the 10 or so days before Christmas — as it will be exacerbated this year by the early arrival of Thanksgiving.

“Everyone’s going to go, ‘Oh my God, what’s wrong? [as traffic and sales slows down],’” Poser said. “But it will pick up again, so investors, retailers and stakeholders should just relax. The [strong] retailers already know to expect the lull and are [equipped] for it.”

Preparation for the respite, according to Van Sinderen, will involve what has become the mantra of retail more recently: “Keeping the importance of omnichannel in mind and staying engaged with the consumer.”

“Discounts and promos got people in the door/on the website purchasing during Black Friday weekend, [but] there will need to be compelling incentives during the market share fight to the holiday finish line,” he added. “At the end of the day, it’s about listening to the consumer and giving them the merchandise they want at an attractive price with the least amount of friction and the easiest omnichannel purchasing experience.”

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