Black Friday Shopping: Why Mobile Beat the Malls This Season

Consumers took to their smartphones to shop this weekend, offsetting sluggish traffic at the traditionally bustling malls.

The digital increase should help retailers hit a projected 4% to 4.5% increase over last year’s final tally. But steep holiday discounts could leave merchants with razor-thin margins. Mike Sansone, a principal in the consumer and retail practice at global strategy and management consulting firm A.T. Kearney, said he expects most retailers to hit their growth number for holiday sales through “aggressive promotional planning. … The question will be how margins pan out.”

While some shoppers are likely hoping for better deals on Cyber Monday, there’s no guarantee that the day will bring more attractive offers.

Inventory appeared to be in good shape heading into the shopping period. Jeans, for both genders, seemed to be winners at the teen stores, while women’s sweaters remained on display tables as consumers gravitated to what appeared to be the season’s must-have soft, sherpa tops instead.

Just the data, please

Store visits on Black Friday and Thanksgiving Day dipped 3% year over year, according to ShopperTrak, a traffic-counting service, which said a 2.3% uptick in Thanksgiving traffic helped offset a 6.2% plunge in Black Friday footfall.

“There is no longer one way to shop on Thanksgiving Day and Black Friday,” said Brian Field, senior director of the consulting practice at Sensormatic Solutions, which owns ShopperTrak.

“As omnichannel retail and online shopping continue to grow in popularity, consumers turned to emerging fulfillment solutions, like “buy online, pick up in store” (BOPIS) this year,” driving more intentional in-store behavior versus casual browsing, he added.

Instead of braving crowds and chaos at the malls, shoppers snapped up deals on their smartphones on Black Friday, where 65% of all digital orders were conducted on mobile devices, 35% higher than last year, according to Salesforce. The day’s digital revenue grew 14% from last year to $7.2 billion and on social platforms, Amazon, Walmart and Target emerged as the most talked-about retailers.

Adobe Analytics’ Small Business Saturday survey saw a new record of $3.6 billion in e-commerce sales, marking an 18% year-over-year increase, while smartphones drove 41.2% of digital retail, reflecting 22.2% year-over-year growth.

Shoppers are flocking to the convenience of BOPIS, usage of which is up 46.6% over 2018. And in the early hours of Sunday, Adobe tracked $220 million in online spend as of 9 a.m. ET, or up 21.3% from 2018, which puts Sunday sales on track to surpass the $4 billion mark for the first time. Adobe expects Cyber Monday to set a new record with $9.4 billion in projected sales, an 18.9% bump from last year.

“The weekend between Black Friday and Cyber Monday is emerging as a truly lucrative period for online commerce,” Vivek Pandya, lead analyst at Adobe, said. “With a projected $7.6 billion generated over [Saturday and Sunday], consumers are taking advantage of post-Black Friday deals and are accelerating spend in the run-up to Cyber Monday.”

Comp-store sales could be a problem

With smartphones driving so much of the season’s sales thus far, “very few retailers are happy with the [store] traffic numbers,” according to Gabriella Santaniello, retail consultant at A-Line Partners. “The weekend was nowhere near where they wanted those numbers to be.”

Merchants might have themselves to blame. “The retailers were pretending it was last year, and they promoted in line with last year. Many started promoting Nov. 15 and 16 to get ahead of the season because there are six fewer shopping days,,” Santaniello said, “but in doing that, it feels as if they stole their own thunder on Black Friday.

“Not much changed on Black Friday when the discounts were available sooner,” she added. “The cat was already out of the bag. Now shoppers are waiting to see what deals will be available on Cyber Monday.”

Santaniello said retailers noted how sales were flowing through digital platforms. At Zumiez, “store associates were busy, busy, busy, doing everything including filling online orders,” she said, noting the retailer lacks fulfillment centers and fulfills e-commerce orders from brick-and-mortar.

Screen-printed T-shirts, especially those with “unique” graphics, are proving popular, she noted, as well as Vans footwear and micro handbags in the $200 to $300 range from brands like Michael Kors.

“Cosmetics, which was crazy hot last year, died down a bit this year,” Santaniello said.

Sherpa jackets and sweatshirts, teddy bear coats and eyelash sweaters were popular items for women and teen girls. “They’re looking for loungey, comfy stuff. I saw people stocking up on that at Victoria’s Secret’s Pink,”  Santaniello said, pointing to slow-moving inventory, including the “expected sweater selection in 25 colors that retailers have every year for gift giving. Some of that product didn’t seem to be moving, no matter who had them. Now it’s more about having the right type of sweatshirt over leggings.”

Addressing top-performing brands, Santaniello and Coresight Research’s Marie Driscoll said traffic was good at Pink, American Eagle Outfitters and Abercrombie & Fitch, which included jeans among its featured promotions and became the top seller. Ugg boots also fared well over the weekend.

And the winners were …

Sansone said Walmart and Target will continue to do well throughout the holiday season, although Costco’s Thanksgiving Day website crash could cost it more than $10 million. “The challenges will be the mall-based niche retailer that doesn’t have as broad an offering or e-commerce [platform],” he said. While apparel remains a top gift, Sansone expects struggling mall-based specialty chains such as Gap to see more of the same this holiday.

One noticeable change this year from 2018 are the “steeper discounts,” Sansone said. “It’s a challenge to get foot traffic for many retailers. We saw Michael Kors offer 70% off versus 60% last year. That could represent a more aggressive margin squeeze, and it seemed to be a theme across several retailers.”

What remains to be seen, he said, is how retailers did with their planned inventory levels and their projections of the products shoppers would buy.

Coresight Research stationed analysts around the country in cities and stores, from luxury to outlet and regional mall to downtown high street.

Consumers were looking for bargains but luxury wasn’t on sale, according to Marie Driscoll, managing director of luxury and fashion at global research and advisory firm Coresight Research. “It’s the same for fast fashion, although we saw select items off 30% or 50% in outerwear and denim for a small window of time, such as at Zara’s,” she added.

Driscoll was at Manhattan‘s Hudson Yards over the weekend to observe its first Thanksgiving holiday. “The mall was busy with events, music and lighting. [The mall operators are] making it a community of sorts, but 60% is from international tourists, making it still more destination than community. But even if it’s destination, there’s still impulse buying in the malls, which you don’t get when you buy online because you don’t get to see and touch,” she said.

Coresight, she said, is projecting holiday sales to increase 4% this year. “The good news is that consumers are willing to shop if they are given sharp price points,” she said, voicing her belief that consumers are becoming immune to steep markdowns on things that they don’t love.

“Call it the Marie Kondo effect. Thirty-five [percent off] may be a great discount, but what happens when it becomes 70% off? If they didn’t buy at 35%, why would they buy when it’s 70% off?” she said, noting that kind of thinking could impact deep discounting when consumers are considering buying for themselves.

“Brands that still live in consumers minds’ continue to resonate,” Driscoll said of where consumers like to shop. “They will buy something from Abercrombie on sale, but think this is a good gift so I can give it. American Eagle is very busy, while Banana Republic was pretty busy, but it had deep markdowns. The department stores saw some traffic but that’s because of heavily discounted merchandise due to doorbusters.”

Driscoll didn’t see much traffic at Ann Taylor, which was offering significant discounts. “Women are wearing their clothes differently,” she said. “They don’t need as much of the [typical] Ann Taylor clothing anymore. The brand is trying to bring in product that’s more relevant to today’s woman, but they still have to get her into the store.

Despite all of Ann Taylor’s half off promotions, “if a brand isn’t hot, it doesn’t matter how deep the discounting is — it’s not resonating with the customers,” she concluded.

Editor’s Note: This story was reported by FN sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.

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