Have Smartphones Killed Black Friday? Store Sales Down, Online Sales Surge

The early reports told the tale: despite the usual, desperate media attempts to convey human movement on the scale of Moses leading the Israelites across the parted Red Sea, even the most over-caffeinated reporters had to acknowledge by mid-day that Black Friday crowds were disappointing.

To the extent that there was excitement, it focused on a nascent Black Friday tradition emerging in Europe and elsewhere, though clearly some consumers outside the US had confused the commercial activity with a rowdy soccer match, replete with drunkenness,  fights and related mayhem.

The New York Times even ran a headline in its early edition describing crowds as 'thin' until its advertisers weighed in with their displeasure about such negativity and its potential impact on sales - and future advertising placements. In later editions, that adjective disappeared like a 50 inch television might have done in prior years.

The less-than-orgiastic crowds were not entirely a surprise. Speculation had been building, as the following article explains, due to the increasingly widespread use of smartphones, the improvements in the shopping apps' ease of use, the absence of any really new blockbuster products (how many tablets does the average family really need?) and the plethora of deals available online - with free shipping.

The prognosis appears to be that Black Friday's heyday has passed, its death foretold by chronic, year-round discounting, mobility and continuing economic malaise. Technology and the efficiency it provides, will extend its rule. Black Friday was fun while it lasted - though mostly for masochists. JL

Nathan Layne reports in Reuters:

U.S. shoppers spent slightly less money at brick-and-mortar stores on Thanksgiving Day and Black Friday than across the same two days in 2013, while online sales surged to record highs. The data highlights the waning importance of Black Friday

U.S. shoppers spent slightly less money at brick-and-mortar stores on Thanksgiving Day and Black Friday than across the same two days in 2013, while online sales surged to record highs, data showed on Saturday.

Sales at retail stores totaled about $12.29 billion on Thursday and Friday, down 0.5 percent from the $12.35 billion spent last year, according to estimates by ShopperTrak. The research firm stuck by its forecast for November and December sales to increase 3.8 percent.
The data highlights the waning importance of Black Friday, which until a few years ago kicked off the holiday shopping season, as more retailers open their doors on Thanksgiving Day and start discounting earlier in the month. It also points to the intense price competition among retailers, which have been discounting by 40 to 70 percent this year compared with 30 to 50 percent in the recent past, ShopperTrak founder Bill Martin told Reuters.
"I think what we are seeing is those early promotions coupled with some pretty deep discounts," he said. Martin said he had expected a 0.5 to 1 percent sales gain.
Customer traffic rose 27.3 percent on Thanksgiving Day from a year earlier, reflecting the sharp increase in retailers opening for business on that day. Traffic fell 5.6 percent on Black Friday, ShopperTrak said.
Martin cautioned against taking the two days' figures as sign of slack holiday demand. He noted that Thanksgiving and Black Friday combined for just 1 percent growth last year, underperforming growth of 3.1 percent during the entire season spanning the months of November and December.
Reflecting the decreased significance of Black Friday, ShopperTrak expects "Super Saturday" on Dec. 20 to rank as the busiest shopping day this year and says seven of the top 10 sales days of the season are still to come.
Separate data underscored the ongoing shift of shopping to online retailers.
Online Thanksgiving and Black Friday sales tracked by Adobe Systems Inc were a record $1.33 billion and $2.4 billion, up 25 percent and 24 percent from a year earlier, respectively. Between Nov. 1 and Nov. 28, $32 billion has been spent online, up 14 percent from 2013, Adobe said.
The proliferation of smartphones has made consumers more likely to shop online, with 29 percent of Thanksgiving sales via mobile devices, up from 21 percent on the same day last year. Adobe said its findings were based on more than 350 million visits to 4,500 retail websites.
"So much more mobile shopping is happening and that's part of what's driving e-commerce activity to new heights every year," said Tamara Gaffney, principal analyst at Adobe Digital Index.
Several traditional bricks-and-mortar retailers reported strong online growth, a reflection of efforts to compete more aggressively on price with Amazon.com. Target Corp, which is offering free shipping for online orders during the holiday season, said it had record online sales on Thursday, up more than 40 percent from 2013.
Protesters have urged shoppers to boycott stores as the holiday season gets underway, saying economic inequality in the United States contributes to incidents such as the Ferguson, Missouri, shooting of an unarmed black teenager by a white policeman.
Martin, however, told Reuters he did not think the protests have so far had a significant impact on sales on a national level.