In a year like no other, does Black Friday even matter?
Yes—but probably not as much as it once did for retailers.
Black Friday, and the days before and after, will likely remain rife with deals, especially online. And while many consumers cooped up at home may have already started buying gifts, plenty of spending is still up for grabs, as experts predict this season retailers will ring up $1.15 trillion in sales. And the usual suspects may still come out on top.
The Covid-19 pandemic, which upended retail this spring, has already left its mark on the holiday shopping season. In July, numerous retailers pledged to close on Thanksgiving. Amazon.com’s (AMZN) Prime Day event, which typically occurs in the summer, was pushed back to mid-October, kicking off a frenzy of Black Friday-esque deals from rivals such as Target (TGT) and Walmart (WMT). Amazon’s Prime Day, while perhaps a touch disappointing, still notched $3.5 billion in sales, which surely contained some presents from Santa.
Retailers moving up the start of Christmas shopping season is nothing new. Stores have been pushing up their Black Friday sales and hours in recent years, with some opening up before Thanksgiving dinner. The trend also gave rise to other unofficial retail events during the weekend after Black Friday, such as Small Business Saturday, Cyber Monday, and Giving Tuesday. That means Black Friday and related sales encompass nearly a week’s worth of revenue.
Consumers are expected to look for deals throughout this Black Friday period, too. Even the most digital savvy shoppers may not have been tempted by the season’s early start. Youth-focused financial firm Step found that 87% of teens are waiting until after Thanksgiving to start their holiday shopping—and only 18% are looking for gifts ideas from social media. Shopify (SHOP) found that Black Friday-Cyber Monday shoppers plan to spend $686 over that period, 23% more than 2019 levels.
Then there’s data from Alibaba Group Holding’s (BABA) Singles Day, called China’s Black Friday. Unlike Prime Day, it wasn’t delayed this year. Held in early November as usual, the event netted $74 billion, a 26% increase from 2019, keeping pace with recent years’ growth. While Black Friday may not have the same significance in China, the event’s success shows at least one set of consumers is still eager to splurge on historically popular shopping days, despite all the other changes 2020 has brought.
Yet in another sense, this year will be different. Data from Union Bank found that only one in five consumers are planning to do most of their shopping on Black Friday and Cyber Monday. Online-payments companies saw record volumes in October, and logistics challenges of shipping so many packages has experts urging people to buy gifts early to avoid a late delivery. Even if this year’s Black Friday and Cyber Monday period is strong, the rest of December may not be, especially if people simply did their shopping earlier.
Whatever Black Friday may bring, it seems likely that the biggest retailers—including Amazon, Best Buy (BBY), Costco Wholesale (COST), Dollar General (DG), Target and Walmart—who have already dominated 2020, will continue to do so through the holidays.
That’s not to say that they will be the only winners of course. However, with coronavirus case counts rising, people will likely continue to consolidate their trips to physical locations. Forty-four percent of respondents to a survey conducted by fintech firm NMI said they plan to primarily shop with big box stores on Black Friday—echoing the benefit the one-stop shop retailers had during the back-to-school season.
That could give these big players yet another boost, especially if Covid brings shoppers in earlier than it normally does. Black Friday hasn’t historically been the busiest time for big box players Target and Walmart, which typically get higher traffic in the three days before Christmas, according to data from Placer.ai. The firm notes that this pattern reflects their all-in-one nature, as shoppers can pick up last minute gifts with their toiletries and holiday meal ingredients.
So if people skip the mall in favor of Walmart on Black Friday, but still stop in again on Christmas Eve, that could bode well for sales.
No matter what happens this Black Friday, 2020 has taught us to always be prepared for some surprises.
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