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Does Black Friday Weekend’s Performance Bode Well for Holiday Selling?
Led by online selling and boosted by promotions, the sales and traffic over Black Friday weekend — Thanksgiving through Cyber Monday — generally topped expectations in a positive sign for holiday selling.
Strong holiday sales in 2022 were boosted by pandemic stimulus as well as escalating inflation. Sales over the past weekend were still seen growing, according to multiple reports, and there were more promotions than last year — which was in line with plans.
The National Retail Federation reported that a record 200.4 million consumers shopped over the five-day shopping weekend, up 1.9% from last year. NRF’s survey found that 121.4 million holiday shoppers visited physical retail locations, down 0.6%, while online shoppers totaled 134.2 million, up 3.1%.
NRF’s President and CEO Matthew Shay said the turnout exceeded expectations, reflecting “the continued resilience of consumers and strength of the economy.”
Online growth particularly stood out, with holiday purchases on mobile devices surpassing those on desktops for the first time, according to Adobe Analytics. Adobe found that online sales over the five-day shopping weekend were up 7.8% and would have been higher if adjusted for inflation.
“The 2023 holiday shopping season began with a lot of uncertainty, as consumers shifted their spending to services, while dealing with rising costs across different facets of their lives,” said Vivek Pandya, lead analyst for Adobe Digital Insights. “The record online spending across Cyber Week, however, shows the impact that discounts can have on consumer demand, especially with quality products that drove a lot of impulse shopping.”
Mastercard SpendingPulse found that overall retail sales increased 2.5% on Black Friday, with online sales jumping 8.5% and in-store sales inching up 1.1%.
Sensormatic Solutions also tracked data from the weekend, finding that shopper visits increased 4.6% at U.S. brick-and-mortar retail stores and shopping centers on Black Friday, representing some recovery as year-to-date traffic has been down 2.4% on average.
In a dimmer take, Marshal Cohen, chief retail advisor at Circana, believes Black Friday was missing “a sense of urgency” with few doorbuster deals. Cohen said in a blog entry, “Consumers had no worries about being able to get that hot product or limited-supply item (with the one exception of video game consoles).”
He believes the better performance online was helped by more compelling deals, with online browsers able to comparison shop for bargains. Cohen said, “Layer on the increasing power of the younger generations and their propensity to shop online, and we have a new holiday shopping dynamic.”
Discussion Questions
Were you encouraged by Black Friday weekend’s traffic? Is online taking over as retail’s holiday-purchase driver? What other trends over the weekend stood out to you?
Poll
Loading …BrainTrust
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Dick Seesel
Principal, Retailing In Focus LLC
Overall, the results from Black Friday traffic were encouraging. With so many macroeconomic factors and uncertainty, including the fact that Black Friday has virtually become a month-long promotion, it was hard to say how this year’s Black Friday would go. The directionally consistent results from these numerous sources makes clear that consumers did respond and are indeed resilient. Online sales continue to show strength, however, I suspect that this is more a self-fulfilling outcome based on the focus retailers are putting on their online offerings vs. stores. While Black Friday has certainly lost its luster of yester years when it was the shopping day of the year, this year’s results are a good sign of a healthy and motivated consumer.
Completely agree, Mark. The increasing prevalence of month-long promotions and the shift in consumer preferences toward online shopping, particularly driven by younger generations, are reshaping the holiday shopping dynamic. These trends underscore the importance of a comprehensive online strategy for retailers. The sustained resilience of consumers and the positive response to digital promotions offer valuable insights for future retail strategies, highlighting the ongoing transformation of traditional shopping paradigms.
The numbers for Black Friday Weekend beat last year’s performance, and while retailers could simply be bringing forward sales with deep promotions, we ought not to ignore the positive numbers. Although store traffic increased, online sales continued to shine and flex its growth muscles. For the first time, orders on mobile devices passed desktop numbers as consumers shifted purchase decisions from a planned event to on-the-go and prompted by contextual email, text, and social media ads.
As to the shopping pattern ahead of Christmas, it is too early to claim victory. The increase over Black Friday and Cyber Monday demonstrated consumers’ readiness to show up for the right deals; however, we may see a sales lull until we get closer to Christmas and then see another peak sales period for the laggard shoppers. The pace and depth of retail promotion events will be the key driver for the rest of the holiday season.
Christmas did come early this year triggered by early prime deals and month long Black Friday offers. Retailers pulled out some of their best discounts with the goal of winning market share. Consumer debt, however is still in play as credit card debt continues to climb. The industry did lower overall seasonal expectations from being up 4-5% YOY to being up 3-4%. So I would expect a pull back and a weaker Super Saturday.
The numbers from Black Friday Weekend bode well for the holiday season. Consumer confidence is up, there are a few extra days between Thanksgiving and Christmas, plus we’re not seeing significant supply chain issues. So, this appears likely to be a boost to retailers’ confidence. Online sales continue their growth, but retail is still theater, and the store is the main stage for many top brands.
Also, let’s not forget that younger shoppers tend to shop online, but they also value experiences more. So I wouldn’t recommend to any omnichannel retailer that they separate their online world from their bricks-and-mortar world too much. They should always be seen as the same brand experience. And the sales all go to the same top line!
Given the current state of the consumer economy, a 2.98% growth rate (which is what our latest data shows) is reasonable. However, it is a way below last year’s 4.97% growth and the 14.8% growth posted in 2021. However, the fact sales are growing off these strong prior year comparatives is really a pretty big win for retailers.
Notably, the overall growth rate and the rate of online growth is lower than the general retail sales numbers for October. So, in essence, Black Friday spending represents something of a slowdown.
Despite the negative mindset hanging over the economy like a black cloud, consumers are spending and their purchasing power is driving the GDP. I agree that one day (Black Friday) doesn’t make a whole season, but it seems clear by now that modestly healthy increases in retail spending are going to happen. The combination of compelling deals and a robust mixture of online and in-store shopping is making a difference.
Sorry for the gloom-and-doomists but it’s going to be a very strong holiday season.
I think I am encouraged, skeptical, wary and nervous…all at the same time. Encouraged that Black Friday hit it’s numbers, sort of, after all the accelerated promotions that preceded it. Skeptical because it took ever deepening discounts to drive the sales. Wary about the shift to ecomm and the accompanying returns and narrower margins. And nervous, very nervous about the increasing debt levels that are supporting these sales. Add it all up as a movie plot and I confess that I am on the edge of my seat. And the movie doesn’t end until end of January when we can look at the closing credits…the amount of unsold product still sitting on the markdown racks. Which will be just in time for the opening credits of 2024 to start rolling.
Black Friday and Cyber Monday are largely media events. Studies have shown that there is very weak correlation between both the industry and any given retailers BFCM performance and how the holiday season ultimately turns out. And with the events coming earlier in the season than is typical, and the general weakening of both days over time, its especially hard to make much of the data.. As far as whether the results are encouraging, that is a decidedly mixed picture. Online sales increases were below the long-term trend one would expect, despite promotional activity being more intense then last year, according to Salesforce.
Consumers spent a record $9.8 billion online on Black Friday, according to data from Adobe Analytics. That’s up 7.5% from last year. But even with record online spending, TD Cowen lowered its guidance for the season, now expecting holiday spending to be up 2% to 3%. Previously, the organization forecast an increase of 4% to 5%, while the National Retail Federation estimated holiday spending would be up between 3% to 4% year over year.
The biggest winner of Black Friday was mobile digital commerce from the comfort of our couches
The retail stores are as relevant and as critical as ever. However, the criticality of getting to the mall or retailer at 5 am for those doorbuster deals seems to be fading away fast. Consumers could shop at the store at their convenience and on their own terms. Technology and digital transformations have changed Black Friday as we knew it.
Luckily for us, the economy is humming along. Gas prices are down, unemployment is super-low, and most people are optimistic. And keep in mind that a lot of people start shopping BEFORE Black Friday. This is going to be a great holiday season.
This economy makes for a mixed holiday season outcome- it’s not bad, but it’s not inspiring. Until consumers feel confident in their spending capacity, this this will be the norm.
While it is true that growth may not be on par with previous years or exist equally across all retail segments, one cannot deny that early holiday season indicators are looking strong and the economy continues to defy a lot of negative projections. It will be interesting to see how much was pulled ahead by an early Thanksgiving/BF period, but I would guess that this year will continue to set records – particularly online. Now is definitely the time for retailers to adjust their deals and ensure they get the most out of the next couple of weeks.
SALE! SALE! SALE! With so many incredible deals happening all around them how could consumers resist?
We are well on our way to losing the impact of Black Friday as one big day; this year Black Friday sales filled an entire week. I am eager to see how creative retailers get to continue the momentum throughout the holiday season.
It is hard to make predictions about the entire holiday shopping season based on Black Friday traffic and sales. Consumers may be hyper price sensitive this season and shift more of their shopping to the deals during Black Friday, which may limit how much they spend during the remainder of the holiday season. Alternatively, it may indicate that overall spending will be up. We will have to wait and see.
The biggest winner of the BF to CM weekend has to be Buy Now Pay Later. BNPL use was significantly up according to most reports. That likely helped consumers fuel their purchase instincts this holiday weekend. Some will say this is a big red flag and speaks to consumer debt. Sure, we could say that, but it would be worse if those same consumers relied on high interest credit cards to make those purchases vs BNPL. So take it with a grain of salt. I view this as a good sign for holiday season sales, and although most years I believe NRF is overly optimistic about growth, I Expect they are right this year and 3 to 4% growth is where we’ll land. It’s not reasonable to expect high levels of sales growth after such strong years recently. Much of the products consumers purchased that fueled that rapid growth are long lifecycle products, like electronics, home goods, which are precisely the ones not expected to have a strong season this year. There are only so many hard goods like those that consumers can purchase in a short time frame. Consumable items are likely to fare better this season!
The only gloomy thing going on is the incredible cherry picking of bad news bombarding us by a highly polarized and highly biased media. Economy is red hot, disposable income (even inflation adjusted) sure seems to be hanging in there. I do think a high percentage of these sales are pulling forward business, but all in all it looks like a much better retail season in the works.
I love seeing consumer spending on the rise. That indicates people want to buy, and we should be looking at a good holiday season. The question of online taking over as retail’s holiday-purchase driver is discussed yearly (for years). This year is no different. Online has become a major retail channel. It’s not something in addition to brick-and-mortar sales. It’s a category unto itself. And if you’re going to look at consumer trends, you must look at all major channels. For retailers, it should be “happy holidays.”
Black Friday sales exceeded expectations, with a record 200.4 million shoppers, mostly online. Despite in-store visits slightly dropping, overall retail sales rose, showing the resilience of consumers and the impact of online discounts.
Yes, online shopping is becoming a dominant force in holiday purchases, as reflected in the record-breaking number of online shoppers, surpassing in-store visits.
The convenience, discounts & availability of enticing online deals, free delivery, and the ability to compare prices online contribute to this shift in consumer behavior.
Adobe Analytics highlights the milestone of mobile purchases overtaking desktops, emphasizing the shift toward online platforms.
Other notable trends, including the rise of mobile dominance, setting a record for online spending, a rebound in in-store visits, and the growing influence of younger generations shaping the holiday shopping landscape.
The holiday season news is generally good, but with caveats:
Dollar sales are up so far, but so are prices, which could account for much of the apparent growth.
The surging popularity of buy-now-pay-later may be a sign that working folks have less discretionary cash on hand. We also see reports that revolving credit balances topped $1T for the first time.
While shoppers moved decisively to capture attractive early deals throughout November, it’s not yet clear how much they will have left to spend in the final weeks.
On the positive side, it’s encouraging to see YoY growth on top of last year’s very strong season. Retailers are doing OK.
A closing thought: Is “Black Friday” dispersing into “November Madness”? The deals started appearing around the first of the month as retailers tried to pre-empt each other for the first dollars spent.
Media hoopla notwithstanding, a single day has never meant very much. And that’s true now more than ever.
Sales are up, but so is credit card delinquency. People love a great sale and this is proof of that. I hope it keeps up, but credit card debt is increasing. Inflation is causing more people to utilize credit cards and the trends in this article show it.
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/average-net-charge-off-rate-trends-higher-for-6-major-us-card-issuers-in-august-77537809
When did Black Friday start? When did it end? Did it end? Hard to tell since it keeps “growing”…. I believe we will continue to see “Black Friday Creep” in terms of start and end dates..I also believe that online will continue to take share from Brick and Mortar-we have not reached a “marketplace stasis” yet in terms of share. Brick and mortar is not dead by a long shot, and it will never go away. However online will continue to get easier, faster, etc.
With the impact inflation and economic uncertainty have had on consumer spending in recent months, this year’s Black Friday numbers are very encouraging. As we’ve seen more and more in recent years, consumers prioritize convenience when shopping. The increase in online shopping and decrease in consumers visiting physical locations represents this shift in consumer mindset well. During a time of year when many are looking to spend additional time with friends and family, shopping online grants them an easier opportunity to complete their holiday shopping without having to remove themselves from the festivities.
What is interesting about this year’s approach from many brands was, as the article notes, a lack of consumer urgency to shop in-store to gain better deals. Given how well deals and offers have worked to entice customers to shop in person, it’s fascinating more stores didn’t lean into this strategy again, especially when consumers are more price-conscious than ever.
In my opinion, the Black Friday weekend’s robust traffic is encouraging, reflecting consumer resilience amid economic challenges. Online sales outpacing in-store purchases is a noteworthy trend, with mobile transactions surpassing desktop for the first time. The National Retail Federation’s record 200.4 million shoppers indicate optimism. However, I share concerns raised by Marshal Cohen about a lack of urgency in Black Friday physical stores, possibly due to fewer doorbuster deals. This highlights the evolving role of online platforms, offering compelling deals and catering to the preferences of younger generations. The weekend showcased the impact of discounts on consumer demand, emphasizing the significance of quality products and impulse buying in the evolving holiday shopping landscape.
This year’s Black Friday and Cyber Monday events were encouraging, and consumers are more conditioned to participate than ever. Overall, consumers were incentivized to purchase with deep discounts and promotions across retail channels. We’re seeing that consumers are increasingly taking advantage of these key promotional windows to maximize spend and budgets through uncertain economic conditions. They’re also getting better at deal hunting online as opposed to waiting in line to fight for in-store bargains. Now that this sales event is over, it’s likely that we’ll see a reduction in spending as retailers remove those discounts. Other trends that stood out this year included the increased use of alternative payment options like BNPL and mobile purchasing, which could indicate impulse buys. We also saw the connection between social media and online shopping. Lastly, and not surprisingly, electronics remain the number one purchase category.