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December 2, 2024
Black Friday Sees Record Online Spending Surge While In-Store Traffic Declines
Many shoppers on Black Friday ditched the mall crowds the day after Thanksgiving and spent more money online than ever before.
U.S. consumers spent a record $10.8 billion online on Friday, up 10.2% year-over-year and more than double the $5.03 billion spent in 2017, according to Adobe Analytics, which tracks e-commerce transactions.
“Crossing the $10 billion mark is a big e-commerce milestone for Black Friday, for a day that in the past was more anchored towards in-store shopping”, said Vivek Pandya, lead analyst at Adobe Digital Insights, in a statement.
The gains were led by purchases made on mobile devices, which grew 12.1% to $5.9 billion, accounting for 55% of online sales on Black Friday. Pandya said that the rise of digital shopping tools such as AI-powered chatbots, mobile wallets, and buy now pay later (BNPL) options is driving “tailwinds that can prop up online growth for Black Friday moving forward.”
Adobe expects Cyber Monday to be the year’s biggest shopping day, estimating record spending of $13.2 billion, up 6.1% year-over-year.
Salesforce reported an even higher Black Friday sales number of $17.5 billion in U.S. online sales, a 7% year-over-year increase. The cloud-based software firm reported that 80% of global traffic came from mobile devices on Black Friday, with mobile devices driving 69% of all orders, up from 68% in 2023.
Caila Schwartz, director of consumer insights at Salesforce, told Reuters that the “gap between shoppers looking and browsing from their phones, but then they go back to their computers and buy” is shrinking due to streamlined payment options like Google Pay and Apple Pay, store billing and shipping information for loyalty members, and increasingly personalized suggestions for mobile shoppers.
In comparison, Friday’s in-store shopper traffic was down 8.2% on Black Friday compared to 2023, according to Sensormatic Solutions, which tracks retail store foot traffic. Sensormatic attributed the softer-than-expected in-store sales to deals arriving prior to Black Friday and continuing afterward.
“Shoppers were able to spread out their purchases and spend time with their families,” said Grant Gustafson, head of retail consulting and analytics at Sensormatic Solutions.
Early data from tracking firm RetailNext likewise suggested that in-store traffic on Black Friday was down 3.2% nationwide. RetailNext attributed the weak traffic to a consumer fatigued by inflation putting a priority on essential purchases as well as retailers spreading out deals across the season. Joe Shasteen, global head of advanced analytics at RetailNext, said, “This extended shopping period has ultimately decreased the singular importance of Black Friday itself.”
Mastercard SpendingPulse reported that U.S. e-commerce sales soared 14.6% year over year while in-store sales inched up 0.7%. Overall sales were up 3.4%.
Ahead of Black Friday, many shoppers visited stores to browse and explore options, Michelle Meyer, chief economist at Mastercard Economics Institute, told Reuters. She added, “They were waiting. But then when the Black Friday sales hit, we had this big concentration of spending, which was really done online given that’s where you have the greatest amount of power and choice as a consumer.”
Discussion Questions
What’s driving the apparent strong momentum in online sales amid softer in-store sales this holiday season?
Are advances in mobile shopping likely contributing to accelerated online growth?
Poll
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Rachelle King
Retail Industry Thought Leader
Georganne Bender
Principal, KIZER & BENDER Speaking
Scott Benedict
Founder & CEO, Benedict Enterprises LLC
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It’s not really surprising that store growth was more muted over the main Black Friday period. Most shops had been offering deals for weeks before the big day, and this meant some consumers did not feel the necessity or urgency to visit them. Online also allows consumers to do more price comparison, which was particularly important this year as shoppers are seeking the best value for money. All that said, shops remain a vital part of Black Friday and nothing in these numbers suggests they are doomed or irrelevant. It’s also worth saying that every single year for the past ten plus years has been a record for online spending so the headline is more dramatic than it sounds!
This is – checks calendar – 2024 and we’re commenting on the shift from in-store to online…seriously?!?! Wake me in (whatever year in the future it is) when in-store has 3-4 years of stability, and then we can talk about a long term-equilibrium.
Who wants to wait up all night, then fight the crowds? Online commerce is a breeze…and it will be fulfilled from the store.
What do you expect when Black Friday sales begin in July? Unless the deal is super good there is no longer an urgency to visit the store. Retailers are killing Black Friday.
So true, Georganne! The need to pull in sales becomes their only focus and they ignore the store’s physical differentiation.
For years to come, online sales will increase for Black Friday, and in-store sales will decline. There is a steady decline in regional malls, department stores, and almost every type of category store chain.
As a contrast, online stores are open 24 hours a day, and black Friday promotions begin well in advance of Thanksgiving.
Black Friday is simply a reflection of our new economy.
Not long ago, we ventured into mobile first commerce strategies. Then, it was frictionless commerce. Now, it’s easy pay commerce. If you consider these evolutions, we have been getting to this point for some time and consumers are ready for it.
Mobile devices allow consumers to choose the when, where and how of purchase decisions. It is the new point of purchase. Online deals surfacing well ahead of Black Friday made it easy and convenient for consumers to make purchase decisions without waiting for brick and mortar or Black Friday.
Still, while mobile has had a shinning moment kicking off the holiday season, I wouldn’t count retail stores out just yet. Online has yet to figure out how to duplicate the magic of a holiday in-store shopping experience. And that magic is ultimately what the season is all about.
Exactly. Once it was magic. Now? It’s a chore the way Cathy described above. All the early promotions are actually less of an issue than the fact that there’s no fun there. Retailers know it. They just have to figure out how to fund a better in-store experience that makes the family say “Let’s go shopping!” on Friday.
YES!
That is so true, Rachelle. The physical store cannot be duplicated online. However, most retailers act as if the only tool available is a discounting cudgel and forget their opportunities for the “magic” in their stores.
The shift from walking out the door with Merchandise to online purchases being delivered to the consumers door started years ago and will continue for at least the next several years. It is important to remember that sales walking out the door are not the only measure of the positive impact of the stores. Stores continue to increase in the role of show room both for early shopping, Omni cart transactions that are delivered to the consumers home and facilitating mobile shopping with in store WiFi and assisted guided selling. The move to omni-cart experience and real-time visibility to enterprise wide inventory all contribute to a more frictionless shopping experience which also aligns with the younger generations shift towards more family time and less time battling crowds. All said and done stores are no less important than they were last year. The roles of stores are changing and the number of stores and size of stores need to adapt to support the continued grown of mobile shopping.
The surge in Black Friday online spending and decline in store traffic is no surprise. E-commerce offers unmatched convenience and variety, with online stores able to stock far more than their space-constrained physical counterparts. While this doesn’t signal the end of physical retail, it does highlight a plateau in growth for brick-and-mortar stores. Their role is shifting—from transactional spaces to experiential hubs or fulfillment centers.
According to the 2nd Quarter Retail E-commerce Sales Estimate from the US Census Bureau (August 2024), E-commerce sales (web and mobile) accounted for 16% of total retail sales. While online shopping is continuing to grow, and especially shopping via mobile, the physical store is still where ~ 84% of sales are made. And even if the sale is not transacted in the physical store, often a store visit is a precursor to an online purchase. This is why all retailers need to execute effectively in-store and online.
Mark, I wish it were limited to executing more effectively. Most retailers ignore other tools except for creative ways of offering discounts.
After Thanksgiving, our family reminisced a bit about how the Thanksgiving Day paper was always packed with circulars filled with doorbusters and deals. We’d plan our Friday accordingly; it was an event. It’s been years since that was the case in our house. No more getting up before dawn to wait outside in the cold for a chance some great bargain. We shopped online, and almost every product we were interested in was available, and it was done before football started on Thanksgiving. Friday, we went for a hike and steered clear of any store. Comparing notes, this seemed to be the common scenario in our circles. The demise of Black Friday is a mix of things. For hardcore shoppers who enjoy getting out into stores, they’re still going to be there. For many folks, there just isn’t the same motivation to get out there. For the last several years, there really hasn’t been a “killer” item that people are willing to queue up for. And the discounts? They just haven’t been that compelling. It was motivating enough to log on to a laptop with a cup of coffee in my slippers, but definitely not motivating enough to go out and stand in line and fight crowds. And, as it turns out, I’m not sure the crowds were even there.
The phenomenal sales numbers for Black Friday (and Cyber Monday) shouldn’t surprise anyone. The merging of technological capabilities on apps, mobile phones, and computers, combined with retailers’ willingness to exploit these channels as a way to do business with them AND customers’ willingness to use them, is what’s making these numbers grow year-over-year. Retailers are making it easier and more convenient than ever to do business with them, and customers are enjoying the experience.
I beleive there to be a number of factors contributing to the softer in-store traffic on Black Friday.
First, the holiday season has been “pulled forward” by sgnificant promotional periods such as Amazon’s Prime Day and other competitive responses to that promotion that create valuable offers for consumers prior to the holiday weekend.
Second, the traffic and congestion associated with that day in physical stores was NOT a enjoyable experience for anyone involved…the shopper or the retailer. Being able access great items at great prices during Thanksgiving Day and throughout the weekend until Cyber Monday is a very compelling alternative shopping experience that consumers are clearly growing to enjoy.
Finally, as younger consumers now enter their peak spending years a generation of consumers that is very comfortable shopping online is being to replace a generation of shoppers that associate shopping in stores with the holiday season. Retailers and brands that recognize that trend realize that post-COVID shopping habits have now normalized and the core US consumer is now one that embraces online as a habit they have now know their entire adult lives.
Black Friday, in stores, isn’t going away and is still a big shopping day. However, the growth in this past weekend is going to remain online. Omnichannel is not a fad, and retailers that embrace it are destined to win longer term.
Brave new world. Who needs traffic, parking, time spent walking, waiting in line when someone can do it for you?
Nothing about these results is surprising, except that the same people complaining about the price of eggs a month ago are spending at healthy levels now. But to watch TV news coverage of Black Friday — the usual footage of crowded malls and lines outside stores — you would think they used “found footage” from 1999. These kinds of stories may be more interesting visually than watching people shopping from home on their phones, but they have nothing to do with the reality of how people shop today.
Black Friday used to mean the dreaded trek to the mall, fighting crowds, limited assortments, long lines to pay, carrying packages to the parking lot & then getting them from your vehicle into your home.
All of these customer challenges, nay compromises, are individually & collectively addressed by online shopping. Technology has enabled shopping from the convenience & safety of your home. This trend will continue throughout the holiday shopping season.
Stores have been discounting for weeks leading up to Black Friday. Simultaneously, we have become accustomed to significant online sales through Amazon and nearly every other retailer and brand during this period. The convenience and time savings of online shopping, especially with a trusted brand, increasingly carry more value (and less headaches) than a sharp-elbowed crowd testing the in-store experience. Retailers are predominantly screaming discounts to attract foot traffic, but few are creating a magical shopping experience, as Paula and Rachelle touched on.
While stores can be both magical and maddening, e-commerce options cater to us like royalty. We get to skip the crowds, lines and commutes even if it means we need to wait a couple of days to get the product in our hands.
Retailers’ and consumers’ increasingly mobile-first mindset means we now shop whenever and wherever we want. We can see, like and buy in seconds. Convenience and time savings will grow in importance, especially if more workers go back to the office more days per week in 2025.
The increase in mobile is a natural outcome of mobile being the primary computer for many. PC shipments are up slightly but near their lows. It’s quickly becoming a mobile first world in retail.
The increase in online is about getting what you ordered. When you enter a store, you’re taking a chance if they have the items you want in stock. Even with inventory availability on some retailer apps, if someone gets to the shelf before you, disappointment awaits. Online inventory is closely tracked. You order it. You get it. That’s a pretty compelling value proposition, especially when your task is getting specific gift items.
Yes, advances in mobile shopping, as well as improvements in streamlining the eCommerce user experience, are driving accelerated online growth. Consumers want convenient shopping experiences, especially during the holiday season. When they can quickly find the products they’re looking for, build an online cart and checkout seamlessly, consumers are more likely to stay home with loved ones during the holidays rather than venture out to stores and risk empty shelves and long lines. As online, mobile and social platforms become more efficient shopping methods, consumers will continue to shift away from in-store purchases.
Online sales are booming because people are tired of the hassle of in-store shopping, the crowds, limited inventory, and long lines. Online shopping offers better deals, convenience, and more variety, and that’s what shoppers want.
Mobile shopping has definitely a big part in this shift. It is because features like one-click payments, BNPL options, and personalized recommendations make buying on a phone easier than ever. Retailers who prioritized on digital experiences earlier are now winning because they’re giving customers what they want, which is speed and simplicity.
In-store shopping isn’t dead, in fact whenever I go to a place I often make sure to visit the local stores in the area, but it’s clear that many retailers are now putting their faith on online stores as well for growth and innovation.
Convenience has always been and will always be the main advantage of online shopping over in-store shopping. Today, people spend more than six hours a day online, four and a half of which are on mobile devices, and they are more comfortable than ever making large purchases at the click of a button.
The time spent browsing the web, coupled with recent eCommerce advancements such as flexible delivery and payment options and AI-powered search and recommendations, has caused the line dividing the in-store shopping experience from the online one to grow thinner and thinner. Retailers are finally considering both channels as part of an overarching experience. We’ve spent decades fine-tuning the in-store experience, and now we’ve got to catch up with the digital one.
Another factor is the increase in promotional online shopping days like Amazon Prime Day and Target Circle Week, which have weakened the appeal of waiting in long lines early in the morning on Black Friday.