Savvy shoppers were out in full force over the Thanksgiving Day weekend. According to the America’s Research Group (ARG)/UBS shopping survey conducted over the weekend, the number of Black Friday–only shoppers was the highest in 11 years, with 40.2 percent of shoppers hitting the stores on that day only. Out of those buyers, 15 percent shopped at electronics stores — a five-year high — and 17.3 percent shopped at department stores, the lowest percentage share since 2006.
The National Retail Federation (NRF) reported that total spending, including both in-store and online, grew 9 percent to $45 billion during the four-day weekend, with the average shopper spending about $365, up from $343 one year ago. Clothing and accessories were the most popular items sold, followed by toys in second place and books, CDs, DVDs, videos and video games in third.
“It’s just mind-boggling how big these numbers are — customers went wild,” said Britt Beemer, chairman of ARG. “Fifty percent more TVs were sold this year compared to last — an outstanding number. People out there are motivated to shop.”
A big surprise in 2010: Some shoppers didn’t wait until Black Friday. Bradley Honan, senior vice president of StrategyOne, a public-opinion research company, said 62 percent of the weekend’s shoppers made their purchases online on Thanksgiving Day. “Considering Black Friday the kickoff to the holiday season just isn’t so anymore. This online spike will redefine what Thanksgiving is all about — shopping as much as football, turkey and parades.”
Scott Hoyt, senior director of consumer economics at Moody’s Economy.com, warned that the statistics being reported for the weekend were not entirely consistent — and not uniformly optimistic. ShopperTrak, a research firm that tracks sales and traffic at more than 70,000 outlets, reported that in-store retail sales in those outlets rose only 0.3 percent on Black Friday. “Those sales were consistent with our outlook. They were better than Black Friday sales in the last couple of years, but it’s not boom time,” he said.
Jewelry captured its share of the increased sales. Jewelers estimated a 17.6 percent increase in online sales on Black Friday 2010 compared with 2009, according to Coremetrics, an IBM company. “Jewelry retailers are having a banner holiday season online,” said John Squire, chief strategy officer of IBM Coremetrics.
The NRF reported that 14.3 percent of shoppers bought jewelry over the four-day weekend this year, compared to 11.7 over the same period in 2009, a 22 percent increase. “This means that jewelry shoppers are back and they are indeed starting to splurge and buy luxury,” said Scott Krugman, a spokesman for the NRF.
Honan agreed. “This is such a dramatic spike that we have not seen across any other product category,” he said.“This spike we are seeing here is a big shift. No one is opening their wallets with passion or certainty, but they are not putting their lives on hold anymore.”
Beemer said the ARG/UBS survey found that jewelry store sales rose only 1 percent for the entire weekend, but he is not concerned about the sluggish figure. “Customers looking for a deal are out, instead of the upscale customer. Thanksgiving weekend is the worst-case shopping scenario — you can’t get good customer service, stores are crowded and there’s no place to park.”
The increased number of jewelry buyers is due to a better stock market, according to Hoyt, but shoppers are still discount-focused. Squire observed that better-made websites by premium jewelers helped spike the online sales and he expects to see the trend continue through the season.
“I think we are going to see the second wave of shopping the Saturday before Christmas,” Beemer said. “Forty percent of parents didn’t finish back-to-school shopping this year because they were waiting to buy clothes. They purchased toys and games earlier and are going to wait until things are discounted by 50 percent and 60 percent right before Christmas to buy again.”
Other analysts warned that we are not out of the woods yet. “I think Black Friday weekend was encouraging, but we have to be mindful that it is only one weekend,” Krugman observed, explaining that the 2010 Christmas shopping season “is going to be a marathon, not a sprint. It’s still going to be a challenge for retailers out there. I think they are ready in terms of promotions and inventory and they are doing a good job reaching out to customers, but we will have to wait and see.”
Honan warned that “with big global issues, such as the state of the European economy and the upheaval between North and South Korea, people will be very cautious about how they spend money. There is not enough momentum out of this weekend to drive a spectacular Christmas season. Shoppers may have bought a lot of what they intended to buy this weekend and they might not purchase any more. Retailers are really going to have to hustle between now and January — no sale is certain at this point.”
Hoyt observed that certain economic indicators may pave the way for the rest of the season. He is encouraged by the fact that “layoffs seem to be down and the stock market is not doing too badly lately. The outlook for moderate sales growth this holiday season is better than the past couple of years, but it’s not terrific.”
Article from the Rapaport Magazine - December 2010. To subscribe click here.