How Millennials May Reshape Black Friday

Technology and convenience affect timing and volume. JL 

Rachel Abrams reports in the New York Times:

Shoppers (could) spend $27 billion on Black Friday, but will account for only 4.3 percent of spending. People are expected to spend $632 billion this season, up from $607 billion last year. But for the first time, more than half that growth will come from online shopping. Young people are turning to their computers and phones. Crowds Friday will tilt older. The low-end consumer is looking for the best deal, but the higher-end are looking for the best products and services.

If you’re in the retail business in the United States, you probably really care about these two things: millennials and Black Friday.

But more and more, these two big drivers of the industry don’t mix inside stores — a dynamic that is reshaping one of the country’s biggest shopping days.

Young people of all kinds, a coveted group for retailers because of their free-spending ways, are increasingly turning to their computers and phones to do their holiday shopping, spreading out more widely the days they open their wallets. Crowds on Friday, the unofficial kickoff of the holiday shopping season, will tilt older than a few years ago, and also, it appears, more cautious with their money.

As a result, the mix of retailers with high expectations for the day is changing quickly, skewing more toward dollar stores and discount retailers and toward essential products like food and cookware. And it is also making the day itself less and less important for the industry over all.

“As big as the event or the weekend has become, it’s substantially muted for the fact that all of the people are buying online,” said Mark A. Cohen, director of retail studies at Columbia Business School.

A decade ago, the day after Thanksgiving accounted for 6 percent of all shopping for the holiday season, according to Craig Johnson, the president of Customer Growth Partners, a research firm. This year, he expects shoppers to spend $27 billion on Black Friday, but that will account for only 4.3 percent of the spending this season.

Over all, people are expected to spend $632 billion this holiday season, up from $607 billion last year, the company estimates. But for the first time, more than half that growth will come from online shopping, Mr. Johnson said.

At the same time, there is a distinct division in who is shopping online. More than half of baby boomers surveyed said they would do none of their holiday shopping online, according to a study by CivicScience, a market research company. Nearly 40 percent of those age 18 to 34 — the group known as millennials — will do most or all of their shopping on the web, and another 35 percent said they would shop both online and in-store.

That shift to online shopping has put more pressure on stores to offer deals good enough to bring people out into the cold. Less than a quarter of Americans plan to shop in stores on Black Friday, down from 28 percent two years ago, according to a survey by Bankrate.com, a website that tracks savings products.

Televisions, headphones and electronics, as always, are expected to be a big draw at big-box stores like Walmart and Target. Department stores that offer big discounts, like Macy’s, will remain a top destination during the weekend, too. Macy’s website is blanketed with its Black Friday promotions, with ads for everything from coats to Apple watches to blenders. “Black Friday Starts Now!” declares a big banner at the top.

But discount and dollar stores, which generally haven’t been big draws on Black Friday, are also expecting strong sales. Over all, dollar stores will experience one of the biggest rises in turnout this year over last year, according to a survey of more than 2,000 adults by the data company Nielsen.

Phillip Dengler, the co-owner of the website BestBlackFriday.com, which monitors the annual sales, said he had seen more of a push from low-budget stores this year. He pointed to the discount chain Dollar General as an example: The company has extended its hours, and Mr. Dengler said the chain had made more of an effort to get its Black Friday circulars online and in front of customers.

“When you think about Black Friday, you don’t think about Dollar General, you think about Walmart and Target and Amazon,” Mr. Dengler said. “They’re trying a little bit more.”

Discounters like dollar stores and so-called off-price stores like T. J. Maxx and Ross also are different in another way from rival retailers: They have little to no e-commerce presence. That has made them somewhat immune to certain industry pressures,

and could give them greater incentive to entice people into stores.

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“I think e-commerce has allowed for Black Friday to start whenever Amazon wants it to start,” said Simeon Siegel, an analyst with Nomura. For the last few years, Amazon has offered Prime Day, its own annual one-day shopping bonanza. “That doesn’t exist for T. J. and Ross.”

Another trend working in favor of discount and dollar stores is the rising popularity of food and kitchen items, like mixers and cookware, as holiday gifts. That’s in part because of new fads like “Friendsgiving” and “Friendsmas,” when, you guessed it, friends rather than family get together for a holiday meal.

“As a result, food is going to be more central to the holidays than ever before,” said Jordan Rost, vice president for consumer insights at Nielsen, in an email.

Walmart, for example, said it would offer some specials on kitchen appliances for under $10, as well as deals on nonstick cooking sets and griddles.

For the foodies interested in opening their wallets a little more, there are also plenty of pricier options, both online and in the stores: Harry & David, the maker of gift baskets, is offering Black Friday deals on its arrangements of cheeses and fruits. Neiman Marcus’s notoriously opulent holiday offerings included collard greens for $66, before they sold out. (If you missed it, there’s also Oma’s Cheesy Potatoes for $76, plus $18 shipping.)

More generally, though, stores at the higher end of the income spectrum — like Neiman Marcus and Bloomingdale’s, for instance — have continued to more quietly promote their Black Friday sales.

“I think the low-end consumer is still looking for the best deal, but I think the higher-end consumers are looking for the best products and the best services,” said Liz Dunn, the founder and chief executive of Talmage Advisors, a consumer and retailing consulting firm.

“I think it’s been a consistent theme for many, many years,” she said, “that these high-end stores don’t necessarily want to participate in the promotion.”