Black Friday has always been a crucial time for retailers to lure in customers and lock in sales. But the lines of the start and end to the shopping holiday are beginning to blur as retailers extend sales to span the entire Thanksgiving to Cyber Monday week.
Last year, Adobe Analytics reported online sales increased 23.6% year over year on Black Friday to reach $6.22 billion. But, of course, in addition to the clear winners of the holiday, there were retailers that were left in the dust.
The stakes are high this year: An estimated 165.3 million people plan to shop during Cyber Week, according to the National Retail Federation, with 114.6 million of those consumers shopping on Black Friday alone. With sales projected to reach up to $730.7 billion this holiday season, there’s little room for missteps.
We took a look at data from Cyber Week 2018 to see what the top trends of the season were, and what it may indicate for 2019.
Big-box stores cede market share to Amazon
Last year, Amazon announced Cyber Monday was the biggest shopping day in its history. The e-commerce giant reported customers ordered more than 18 million toys and 13 million fashion items on Black Friday and Cyber Monday combined.
Amazon accounted for 39% of total sales among big-box retailers over Cyber Week (Thanksgiving to Cyber Monday), causing Walmart, Target and Best Buy to lose market share from the prior year, according to Earnest Research.
Free shipping was a major player last holiday season with Amazon’s expansion of its free shipping to non-Prime members, Target’s roll out of free two-day shipping for the season (eliminating the standard $35 minimum threshold), Best Buy’s “free shipping on everything all season long,” and Walmart’s extension of free two-day shipping on purchases of $35 or more.
This year, however, only 28% of consumers said they plan to shop online during Black Friday and Cyber Monday, while 31% have yet to make up their mind where they’ll shop over the holiday week, according to recent research from Profitero. This begs the question of how important shipping promotions will be for big-box retailers trying to entice consumers to spend with them this holiday season.
Amazon saw the biggest spike in average customer spend during Cyber Week
While Best Buy saw the highest average customer spend among big-box retailers during Cyber Week at $247, looking at the increase in spend from an average week may be more indicative of which retailer came out as a winner during the holiday.
Amazon saw the biggest spike in average spend during Cyber Week, with customers spending 52% more compared to an average week, while Best Buy saw a 46% increase, Target a 35% increase and Walmart just an 8% increase, according to Earnest Research.
The meager increase in average spend for Walmart could be due in part to the mass merchant’s “Everyday low prices” offered throughout the year.
The department store segment paints a different picture in terms of increasing customer spend during the holiday. Among those in the sector, however, lower-priced department stores saw the biggest gains over Cyber Week last year. Kohl’s came out on top in terms of increasing a customer’s average spend during the holiday week at 27%, J.C. Penney (9%) and Macy’s (7%) in the mid-tier department store categories.
For higher-end department stores, Bloomingdale‘s was the winner posting a 16% increase in sales, with Nordstrom (10%) and Saks (9%) not far behind.
Walmart posted strong online sales in the weeks leading up to Christmas
Although Amazon stole market share from Walmart during Cyber Week, that didn’t dim the mass merchant’s online sales in the weeks leading up to Christmas. From Dec. 1 to Dec. 19, 2018, Walmart reported an 86% increase in online sales year over year. Following behind were Nordstrom with a 40% increase in online sales, Target (38%) and Amazon (18%), according to data from Edison Trends.
For some retailers, however, the weeks prior to the big day weren’t as plentiful when it came to online sales growth. Best Buy’s online sales shrank 2% from 2017, followed by J.C. Penney (down 10%) and Sears (down 22%). Rounding out the list of online sales losers was Walmart-acquired Jet.com, with online sales shrinking some 53% from the prior year.
Walmart in 2016 acquired Jet for $3 billion, which at the time was the biggest deal in U.S. e-commerce startup history. Shortly after, the retail giant went on an acquisition spree of digitally native companies, including Bonobos and ModCloth.
However, Walmart in recent years has significantly pulled back marketing spending for its Jet unit, and in June it announced it was eliminating the unit’s lead executive position, which was held by Simon Belsham, and Jet operations would be folded into Walmart’s e-commerce umbrella. Last month, the retailer sold off the ModCloth brand to financial services firm Go Global Retail for an undisclosed amount.
With Walmart investing more into its broader e-commerce business and reducing spending on Jet, it’s possible this Black Friday will see more of the same in terms of online winners and losers.
TJX gained the most foot traffic
As e-commerce continues to grow and blur the lines between Black Friday and Cyber Monday, physical stores during the holiday still hold relevance.
More than half of Gen Z consumers — who carry an estimated $143 billion in buying power — plan to do the majority of their holiday shopping in stores, according to a recent survey from Shopkick.
Last Black Friday, Marshalls saw the biggest increase (14%) in store traffic from the prior year, followed by T.J. Maxx (13%) and Dick’s Sporting Goods (4.4%), according to Placer.ai data emailed to Retail Dive.
However, several retailers saw big declines in foot traffic over the holiday last year: Best Buy store traffic was down more than 10%, Nike (down 15%), Nordstrom (down 16%) and Apple (down nearly 20%).