default-output-block.skip-main
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

Online Sales Surge Ahead of Brick-and-Mortar Retailers’ Big Day

US e-commerce sales surged on Thanksgiving, raising questions about how many shoppers will show up for brick-and-mortar promotions on Black Friday, the traditional kickoff to the holiday season.
By
  • Bloomberg

NEW YORK, United States — U.S. e-commerce sales surged on Thanksgiving, raising questions about how many shoppers will show up for brick-and-mortar promotions on Black Friday, the traditional kickoff to the holiday season.

By 5 p.m. in New York on Thursday, $1.1 billion was spent online, according to Adobe Systems Inc. The full day was expected to total $1.7 billion, a 22 percent jump from the same period a year ago, the company said. Toy demand, especially for Star Wars products, helped drive the increase.

The online rush comes as Wal-Mart Stores Inc., Macy’s Inc. and other chains roll out their Black Friday specials, aiming to get more shoppers into stores. About 135.8 million Americans are expected to shop in stores or online over the four-day weekend, according to the National Retail Federation, the largest U.S. retail trade organization. The amount they’ve spent has declined over the past two years, dropping 11 percent to $50.9 billion in 2014.

Though consumers are benefiting from lower fuel prices and unemployment rates, retailers have their challenges. Mall traffic is in the midst of a long-term slowdown, and shoppers are spending more on experiences and less on stuff. More recently, a warm autumn has curtailed sales of seasonal merchandise, leaving stores with excess inventory. All those factors point to a need for heavy discounting -- good for consumers, but not so great for retailers’ profits.

“From the perspective of the amount of discounting that’s going on, the over-inventory situation, it seems like there are going to be a lot of great deals in the next 45 days,” said Bob Drbul, a retail analyst at Nomura Securities International.

Consumer Spending

The idea that consumers won’t spend without some serious enticement got a boost on Wednesday, when Commerce Department figures showed household spending rose less than forecast in October. Purchases increased 0.1 percent for a second month, while the median forecast of 74 economists in a Bloomberg survey called for a 0.3 percent advance.

And while the NRF’s traffic forecast represents a 1.6 percent increase from last year, there’s a risk that fewer shoppers than expected may show up. Last year, the NRF had forecast 140.1 million consumers would hit stores and e-commerce sites, 4.8 percent more than actually turned out, according to its post-weekend shopping survey.

Some stores are pulling back on their Thanksgiving weekend hours this year and electing to spread more of their specials throughout the month. But the weekend after Thanksgiving is still one of the busiest for U.S. retailers, who use the period to highlight their offerings. Wal-Mart said it expects record crowds on Friday, even though it’s putting most of its discounts online first.

Amazon Effect

Also hurting retailers is Amazon.com Inc. The e-commerce behemoth has been luring shoppers with its free, two-day shipping membership program and an increased focus on fashion that’s challenging even industry stalwarts like Macy’s, Drbul said.

Target Corp. has countered by providing free shipping and returns on its holiday orders, while Wal-Mart plans to offer more than four times as many discounts as last year on the Monday following the Thanksgiving weekend.

Once considered the official start to the holiday shopping season, Black Friday bargains have been increasingly overshadowed by retailers rolling out specials earlier in November. Still, the NRF estimates that the weekend accounts for about 10 percent to 15 percent of total holiday sales.

“We expect a robust four days,” said Sarah Quinlan, head of market insights at MasterCard Advisors. “It still is a major kickoff period.”

By Lauren Coleman-Lochner, Shannon Pettypiece; editor: Nick Turner.

In This Article

© 2022 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

More from Retail
Chronicle the ‘Retail Apocalypse’ and emerging retail models, including DTC brands.

Aviator Nation’s pricey sweatpants and cashmeres had a cult following before they were swept up in the “dopamine dressing” phenomenon. Now, founder Paige Mycoskie – still the brand’s only shareholder – is ready to see just how big her vision for California surfer cool can get.


Small stores can remain competitive by scaling their private labels, testing new store concepts, and offering brands consumers can’t find on Farfetch or in Selfridges.



view more

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
How to Build a Profitable DTC Brand
© 2023 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions and Privacy policy.
How to Build a Profitable DTC Brand