Starting in 2004, Black Friday (the Friday after Thanksgiving) became the busiest shopping day of the year in the US. This year, 95.5 million US consumers are expected to spend more than $40 billion on Black Friday. This is nearly 7 percent of the total that the National Retail Federation forecasts for the 2014 holiday season. This holiday season promises to be lucrative for retailers, with sales rising 4.1 percent to $616.9 billion, higher than 2013’s actual 3.1 percent rise.
However, 7 percent marks a six-year low (as a percentage of overall retail sales for the season) for Black Friday, more in line with the recession years. Deloitte concurs. According to its 29th annual holiday survey, nearly half of consumers no longer rely on Black Friday for shopping and deals the way they once did. And 43 percent of respondents plan to do most of their holiday shopping in December this year, up 6 percent from 2013.
So why is Black Friday on the decline, while seasonal sales are on the rise? As a company that provides marketing solutions to leading retailers, we’re always interested in how consumer behavior is changing, especially around the most wonderful time of the year. Here are the top five trends that we see contributing to the decline of Black Friday:
- Short Buying Season. The coming holiday season will have only 26 days between Black Friday and Christmas, just one more than last year and five fewer than 2012. Retailers need to make the most of this short buying season, considering that many rely on it for as much as 30 percent of a their annual sales.
- Holiday Creep. It all started with a litany of stores and malls, including Target, Wal-Mart, Kmart and Macy’s, opening their doors on Thanksgiving Day. Retailers continue to see holiday creep, as consumers spend increasing amounts online ahead of Black Friday. Overall there is a slight decline in the number of people actually shopping on Thanksgiving weekend, as more consumers go online or wait-and-see.
- Wait-and-See Attitude. Similar to last year, consumers are slow to start their holiday shopping. Many are waiting for deep discounts later in the season. According to a National Retail Federation survey, 45.6 percent of consumers said they hadn’t started their holiday shopping at the beginning of November. Only 2.2 percent of consumers reported that they had finished their holiday shopping, while 20.6 percent had finished 10 percent or less of their shopping, and 12.4 percent had completed about one-quarter of their lists.
- Cyber Days. Many retailers feel that they are in a race against ecommerce. Between football and filling up on turkey dinners, Americans are also shopping online on Thanksgiving Day. In fact, Thanksgiving Day online sales are expected to grow 27 percent to $1.35 billion this year. And Thanksgiving Day is just one small example of the expansion of Cyber Monday. Americans are expected to spend as much as $105 billion online this year, a growth of 8 to 11 percent over last year.
- Omnichannel: Many retailers are joining their physical storefronts with their online ones. Retailers are taking an omnichannel approach to this holiday shopping season. The idea in omnichannel is to reach customers wherever they are—in a store, online or via their mobile phones—and use technology to turn costly brick-and-mortar stores into an advantage. Retailers are reaching across channels and executing in ways that are seamless to the consumer. This includes, social media integration, improved websites, in store pick-up and same day delivery, and mobile services that help customers navigate the stores, comparison shop and access offers.