Black Friday Looked Promising

As online shoppers are clicking away at Cyber Monday, we're in good spirits since Black Friday actually turned out better than expected. A reported 172 million shoppers visited stores this weekend, up 25 million from last year! Even more impressive is that this number is significantly more than the 128 million people that the National Retail Federation (NRF) had originally anticipated would hit stores. So what made people come out with shopping guns-a-blazin' despite the current economy?

As they say, people can't resist a good bargain. And when times are tough, those who might not have bothered seeking out discounts before (the same people that often refuse to wait in line for anything) might just roll up their sleeves and get out with the rest of the deal-seekers. If you've been wanting to buy a new DVD player, winter wardrobe, or toys for the kids, this weekend was definitely the time to do it. In that respect, people probably felt they were better off shopping now and paying things back slowly than waiting until later and paying full price for the same thing.

Still, I surveyed a few people in the U.S. about whether or not they were going to head out to shop, and the responses varied greatly. One person told me that he couldn't bring himself to join the wolves, so to speak.

"I'm not desperate enough to line up at in a tent for a bargain," he said, noting, however, that there were tons of people camped out at his local Best Buy in tents from Thanksgiving night!

Another friend who had originally planned to go Black Friday shopping said she decided to "do her shopping from the web...like everyone else I know."

Meanwhile, a third person shopping in the heart of Manhatten, NYC, exclaimed quite frankly: "Recession? What recession???" It's safe to assume that the streets and stores were packed down there.

Granted, these are only a few personal accounts, but it appears that the situation, not surprisingly, varies from store to store, and city to city. The good news is that, overall, more people shopped, and spent more than they even did last year during this critical weekend. As for future outlook, of course we can't expect these numbers to keep up. The NRF is, however, sticking with its original prediction of a modest 2.2% increase in holiday sales for '08.

As for Canada, I haven't seen any definitive numbers. But a short visit to the Toronto Eaton Centre this weekend had me in shock: I have never seen that weekend destination mall so barren on a late November-early December weekend, and on a Sunday, to boot. Visiting Sherway Gardens shopper centre today for lunch, I was equally disappointed when I noticed that a fast food joint that had only been open for less than a month had already closed its doors. We're certainly up for some tough times ahead. Hopefully they won't last too far into '09.

Stay tuned for final numbers, including Cyber Monday online sales figures, once they become available.

Happy Black Friday...Or is It?

As our neighbours south of the border roll out of bed with their bellies full of turkey and all the trimming, many will surprisingly still find the energy to get out there and shop today, known as Black Friday.

Historically, Black Friday, the day after the U.S. Thanksgiving holiday, is one of the busiest shopping days of the year, when retailers bring out the big guns, so to speak, with amazing deals and discounts. But it's more important than you might think, often determining a company's profitaiblity for the entire year. Some speculate that Black Friday could account for as much as 50% of a retailer's yearly profits! With the economy in the current state that it is, there's no doubt that many are crossing their fingers that shoppers will come, and that this year won't be a disappointment.

The National Retail Federation (NRF) has relatively high hopes for the day: while the organization is not expecting record-breaking numbers, it does anticipate a 2.2% growth in spending. Not exactly a very healthy increase (in fact, it's the lowest it has been in years), but it's better than one might expect given the financial crisis.

A preliminary NRF survey forecasts that up to 128 million people will be shopping today, and into the weekend. 49 million of these are definitely putting on their shopping shoes, while the remaining 79 million are waiting to see whether the "deals" are worth the trek into the city. Last year, 135 million people said they would go shopping on Black Friday weekend.

Interestingly, the NRF, like many other research companies, points to the falling gas prices as positively effecting the retail landscape. People perceive the savings on gas as some extra money in their pockets. Still, the defining factor on consumer's minds this weekend is price, price, price. So good deals are more important than ever.

"Shoppers who held off on buying a DVD player or winter coat over the last few months will find that prices may literally be too good to pass up," explains Tracy Mullin, President & CEO of the NRF.

Hopefully, Mullin is right.

It doesn't end on Sunday, though. Since the Web has become such a dominant force in the retail industry, the Monday following Black Friday has been coined "Cyber Monday", where at-home shoppers can take advantage of deals online. The advantage here is, of course, the ability to avoid the thrill and confusion of packed sales floors and long line-ups. Shop.org finds that more retailers will be offering Cyber Monday promotions this year than they did last year (83.7% vs. 72.2%).

Official Black Friday results won't be released until 4 p.m. this Sunday. But already, many local news outlets are reporting healthy turn-outs, with people waiting in lines from the early morning hours.

Still, we won't know how the retail industry has fared until the mass hysteria is over, the inventory has been accounted for, and the receipts tabulated. More than ever, this weekend is critical for the U.S. retail industry: it could, in many ways, make or break a retailer.

More Black Friday/Holiday Shopping Results

Just when you thought you'd heard the last of Black Friday, the results are in! The National Retail Federation (NRF) reports that retail industry sales were up 5.1% during the month of November, and total retail sales were up 6.9% year-over-year. Topping the list was sporting goods, hobby, book, and music stores (11.3%), as well as electronics (6.1%), and clothing and accessories (8.2%).

DisplaySearch, a division of NPD Group, claims that, in the technology sector, LCD TVs, GPS systems, digital photo frames, camera accessories, and digital SLRs sold well during the first week of the holiday shopping season. LCD TVs outsold plasmas, while HD DVD players outsold Blu-ray (although Blu-ray led in terms of revenue share). Notebook sales also increased by 29% compared to last year.

"Consumers started the holiday shopping season with a bang," enthused Rosalind Wells, the NRF's Chief Economist.

And December is also looking up, as Wells adds that consumers reported only having completed, on average, 36.4% of their total holiday shopping.

Looking even further forward to 2008, DisplaySearch V.P. of Industry Analysis Stephen Baker says that we'll see a stronger emphasis on bundles, add-ons, and accessories as retailers hustle to make profit rather than sell volume. This makes sense, given the rapid price drops we've seen in many product categories as of late, for reasons ranging from price erosion, to the strength of the Canadian dollar. Baker also says that more attention will be paid to added-value services, like customer support, and an overall positive in-store experience. We already see an emphasis on this, through retailers like Lowe's, which just entered the Canadian market with a major focus on offering an improved customer experience.

In addition to the "hot" tech items listed above, see a few other good gift ideas in a previous blog entry. Tech gifts overall are certainly in abundance - happy holiday shopping!

Results are in for Black Friday: Less Money, But More Shoppers

There's likely one question on everyone's mind this Cyber Monday: how did the Black Friday shopping extravaganza pan out in the U.S? Aside from playing a large part in U.S. retailer revenue for the year and holiday season, Black Friday provides a glimpse into what the year's holiday shopping season might be like overall. According to the National Retail Federation (NRF), the number of shoppers during the Black Friday weekend was up 4.8% to 147 million; but dollars per shopper were down 3.5% to US$347.44.

This isn't necessarily a bad thing. What it means is that there were more people shopping for smaller-ticket items rather than large purchases. Not to mention that the average selling price of many high-ticket items (especially flat-panel TVs) has dropped considerably since last year.

NRF President Tracy Mullin says that hot items this Black Friday were things like digital photo frames, laptops, and cashmere sweaters. Last year, the coveted items were higher-ticket buys, like high-definition TVs. Perhaps consumers have a more giving nature this season, having purchased something for themselves last year. This year, men shopped more than women, outspending them at $393.63 vs. $303.95.

Encouragingly, consumer electronics items accounted for 35.7% of the purchases. Books, CDs, DVDs, videos, or video games accounted for 41.7%. This will likely contribute to a welcome upsurge in final sales numbers for the CD and DVD market, which has been plagued by piracy and counterfeit materials for years. The most popular items included clothing and accessories at 46.8%. Other "hot" shopping items were toys (28.2%) and gift cards (21%).

Sales also started earlier this year, as more stores decided to open at midnight (and even earlier!) The strategy seemed to work, as 14.3% of consumers left the house to shop prior to 4 a.m.; up from 12.4% last year.

"Knowing that consumers would be challenged by the current economic environment, retailers hoped that higher traffic would offset lower individual spending, which it did," explained Phil Rist, Vice President of Strategy for BIGresearch, which conducted the poll for NRF. "...The holiday season is off to a good start."

Although discount stores led the pack, snagging 55.1% of the shoppers, it was nice to see that specialty retailers came in second at 43.2%. Traditional department stores received 38.7% of the traffic, while Websites welcomed 31.6%.

Today, nicknamed "Cyber Monday", will extend the deals to the Web, and will contribute more sales to the bottom line of what looks to be a positive holiday shopping season. Although NRF is still sticking to its estimation of a 4% rise in holiday sales this year, Mullin advises that final holiday shopping results won't be available until the last two weeks of December. Stay tuned.

Black Friday Update

According to the National Retail Federation (NRF) there isn't much to report just yet about Black Friday: it turns out no "preliminary" results will be released at all (they used that term mistakenly). But I did promise to follow up once the statement was made, so here it is.

NRF had previously projected that sales would rise 4% when compared to last year, for a total of US$474.5 billion, and is sticking with that estimated figure thus far. NRF spokesperson Scott Krugman tells me that final Black Friday results won't be released until Sunday, November 25.

For now, what we do know is that the best deals were found on electronics (especially flat-panel TVs), jewelry, clothing, and toys. But discounts were also being offered on small-ticket items that are ideal for gift-giving, like digital photo frames, hand mixers, and sterling silver jewelry.

"While many of these items will remain popular during the holiday season," said NRF President and CEO Tracy Mullin, "there is strong interest in them today simply because the prices are irresistible."

To pass up turkey and stuffing for long lines in freezing weather (especially in cities like New York where it felt like -2 at midnight!), the deals must be pretty darned irresistible, indeed!

In the online arena, NRF says that 72.2% of retailers plan a special promotion for what's known as "Cyber Monday", which is a drastic increase from the 42.7% just two short years ago.

Happy shopping to our neighbours to the south!