NEW YORK (Reuters) - U.S. consumers splurged more than $2 billion online in the first hours of Thanksgiving shopping on Thursday, while crowds were largely thin at retailers on the eve of Black Friday, reflecting the broader trend away from shopping at brick-and-mortar stores.
A caution tape is seen by the entrance to a line during a sales event on Thanksgiving day at Walmart in Westbury, New York, U.S., November 28, 2019. REUTERS/Shannon Stapleton
Early discounts offered this month by chains seeking to extend this year’s shorter holiday season saw a dip in the numbers lining up at stores across the country, according to consultants and analysts making spot checks on the ground.
“We’ve seen many merchants start their promotions pretty much right after the trick-or-treaters have gone to bed,” said Lauren Bitar, head of retail consulting at analytics firm RetailNext.
Sales made prior to Thanksgiving and Black Friday could erode “the spike that we have seen in sales dollars historically,” Bitar said.
The day after Thanksgiving has been America’s biggest shopping day, and this year more than 165 million people are expected to take part over the weekend, according to the National Retail Federation (NRF).
While Black Friday still matters, its relevance is fading as the holiday shopping season now begins the week before Halloween and stretches to Christmas Eve with retailers offering deep discounts throughout the season.
The condensed shopping season this year accelerated early promotions and spending. Retailers have six fewer days to make sales between Thanksgiving and Christmas Day this year.
That has pulled spending into early November — more than half of consumers polled by the NRF in the first week of this month had already begun making purchases. On average, Americans had already completed almost a quarter of their shopping, the most in the history of NRF’s surveys.
Store openings on Thanksgiving evening have also reduced store crowds lining up for doorbuster deals at the crack of dawn on Friday.
While store traffic still remains an important indicator, a lot of shopping during Thanksgiving and Black Friday now happens online. Adobe Analytics, which measures transactions from 80 of the top 100 U.S. online retailers, estimates $7.5 billion in sales for Black Friday online, a growth of over 20.5% year-over-year.
As of 5 p.m. ET on Thanksgiving Day, shoppers had spent $2.1 billion online, up 20.2% on a year ago. (adobe.ly/2R1wDj6)
Companies including Walmart Inc, Target Corp, Costco Wholesale Corp and Best Buy Co Inc have bulked up their online presence, deliveries and fast in-store pickups to attract customers.
At the other end of the divide, specialty apparel retailers Gap Inc, Victoria Secret-owner L Brands Inc and department stores Macy’s Inc and Kohl’s Corp have slumped as they struggle to lure shoppers to malls and away from online giants like Amazon.com Inc.
This year’s holiday season will not only test the resilience of such companies but will be a challenge for most retailers as U.S. President Donald Trump’s trade war with China begins to take its toll on margins.
A pricing analysis conducted for Reuters by retail analytics firm Profitero, which examined online prices from seven large retailers for 21,000 products, found sites including Walmart and Amazon have held prices steady for many popular holiday products despite the pressure from tariffs on Chinese imports.
The National Retail Federation had forecast U.S. holiday retail sales in November and December will increase between 3.8% and 4.2% over 2018, for a total of $727.9 billion to $730.7 billion. That compares with an average annual increase of 3.7% over the past five years.
Reporting by Melissa Fares in New York; Additional reporting by Nandita Bose in Washington, Richa Naidu in Chicago and Lisa Baertlein in Los Angeles; Editing by Patrick Graham and Shounak Dasgupta
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November 29, 2019 at 06:08PM
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