…HERE ARE THE LIKELY RETAIL WINNERS AND LOSERS
Written by Barbara Thau, Forbes Contributer, Published in Forbes.com on November 28, 2016
First, the bad news for retailers: Fewer shoppers turned up in physical stores over the Black Friday weekend — the Super Bowlesque kickoff to the holiday shopping season — than they did in 2015.
But merchants might have offset that shortfall with record online shopping turnout over the four-day period, according to a cross section of industry reports.
And while retailers have not yet released sales for the shopathon, indications of Black Friday weekend performers (J.C. Penney) and laggards (Wal-Mart) are starting to emerge.
Weak Footfall, Strong Virtual Traffic
As over 90% of retail sales are still generated in brick-and-mortar stores, waning foot traffic is concerning. Shopper in store visits during Thanksgiving and Black Friday declined a combined 1% versus the same days in 2015, according to preliminary retail visit data from ShopperTrak. And Black Friday shopper visits were flat with 2015.
By contrast, shoppers spent $5.27 billion on Thanksgiving Day and Black Friday online, a 17.7% increase from 2015, according to Adobe Digital figures.
What’s more, Black Friday set a new record by racking up $3.34 billion in digital sales, and 21.6% year-of-year growth, while Thanksgiving accounted for the remaining $1.93 billion. “With the full day total coming in at $3.34 billion, Black Friday may have just dethroned Cyber Monday’s position as the largest online shopping day of the year,” said Tamara Gaffney, principal analyst and director of Adobe Digital Insights, in a statement.
Adobe’s Black Friday report measures 80% of all online transactions from the top 100 U.S. retailers, according to the company.
Retailers that have invested in mobile, email and social have seen 30% more sales on average and 25% higher average order values.
The Most Promotional Retailers
Fueled by “digital doorbusters,” Thanksgiving ecommerce traffic rose 10% from 2015, and was up 9% from 2015 on Black Friday, according to the Verizon Retail Index, which tracks ecommerce traffic across Verizon’s broadband networks to the top 25 U.S.-based online retailers as identified by eMarketer.
And retailers that flexed their promotional muscles more this year versus 2015 included Abercrombie & Fitch, Coach, the Gap, Kate Spade, Michael Kors, Victoria’s Secret and Urban Outfitters, according to a research note from Mizuho Securities USA.
But according to Telsey Advisory Group, the bulk of the weekend’s promotions were on par with last year’s levels.
And more than individual retail product promotions, sales and coupons are the discounting ploys that will whet shoppers’ appetite this year — as well as free shipping offers, according to a survey conducted by HRC Retail Advisory. “There are limited doorbusters to drive consumers to the store this holiday season,” said Farla Efros, president of HRC Retail Advisory, in a statement.
Early Signs Of Potential Retail Stars, Laggards
Based on retail channel checks, Telsey Advisory Group cited Black Friday “outperformers” as Best Buy, H&M, J.C. Penney, Limited Brands, Macy’s and Target. Meanwhile, Ann Taylor (a division of the Ascena Retail Group), the Gap, teen retailers and Wal-Mart were counted among the underperformers.
“In an attempt to simplify Black Friday and focus on online sales, Wal-Mart seems to have fallen a little short in the stores,” said Dana Telsey, CEO of Telsey Advisory Group, in a report. “We also noticed relatively high inventory at Wal-Mart, something we will closely monitor over the next month.”
The Gap, which has been in a longtime funk, was less promotional than last year, “and somewhat lighter on traffic as a result,” she said.
And the teen retailers did not appear to be lighting the world on fire, either. Despite 70% off liquidation sales at Aeropostale, “customer interest did not appear strong,” Telsey said. “Abercrombie & Fitch was also noted as having light traffic at several locations, while American Eagle and Hollister saw better trends.”
But whether or not the largely anecdotal retail-channel checks reflect how each retailer actually performed during the four-day shopping bonanza remains to be seen. Stay tuned.
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