Jason Ankeny @jankenydive
Published in Marketing Dive
Nov. 28, 2016 Another Black Friday is history — and this time around, the annual holiday shopping frenzy made history as well.
Online sales reached unprecedented heights on Black Friday 2016, totaling a record-breaking $3.34 billion, up 21.6% year-over-year, according to Adobe Digital Insights.
Heading into the weekend, Adobe projected online sales of $3.05 billion, corresponding to 11.3% growth over year-ago totals.
As expected, electronics and toys dominated Black Friday shopping lists. Top-grossing electronics this year include Apple iPads and MacBook Air units, Samsung and LG televisions and Xbox systems and games, according to Adobe. Top-grossing toys include electric scooters, Nerf guns, Lego sets, DJI Phantom drones and Barbie Dreamhouse playsets.
Like the song says, you can’t always get what you want: Products with Black Friday’s highest out-of-stock risk include Hatchimals (the season’s hottest, hardest-to-find toy), the NES Classic videogame console, the Playstation VR bundle, Kurio smartwatches and the Little Tikes Princess Horse and Carriage.
If you scored any of the above, consider yourself among Black Friday’s big winners. If you got shut out … better luck next year. Here are the other winners and losers of Black Friday 2016.
Wal-Mart credits mobile devices for driving more than 70% of its Black Friday traffic. The world's largest retailer wasn’t the only beneficiary of the mobile explosion: The mobile channel generated 36% of total digital sales on Black Friday 2016, surging 33% over last year and eclipsing $1 billion in one-day total sales for the first time ever, according to Adobe.
Smartphones drove 25% of total digital sales this year, while tablets accounted for 11%, based on Adobe data. In addition, consumers on devices running Apple’s iOS mobile operating system racked up an average order value of $142, while shoppers on devices running Google’s Android posted an AOV of $130.
As impressive as those numbers are, they could have been even more eye-popping. Mobile devices accounted for 55% of all online shopping visits on Black Friday, a stunning 19 percentage-point gap between visits and purchases, according to Adobe. Compared to Black Friday desktop conversion rates of 5.5%, tablets averaged 4.6%, and smartphones averaged just 2.4%.
Blame poor mobile shopping experiences, Adobe recently said. While 30% of all shopping carts lead to orders on desktop, the number plummets to 19% of carts on smartphones, indicating that consumers are running into significant obstacles on mobile sites. Survey data indicates 60% of consumers find smartphones less practical for finding items than on desktops, with 30% citing easier navigation of pages and 26% pointing to improved image quality on a bigger screen as the primary reasons for switching to desktop from mobile to complete a purchase.
Losers: Desktops and stores
Mobile devices enable consumers to shop virtually anywhere at any time. A recent PayPal holiday buying survey found 34% of respondents will shop in bed for their partner or spouse while sleeping next to them, 22% confessed they will shop on the toilet and 35% admitted they will even shop at the Thanksgiving dinner table in order to capitalize on a killer deal.
So it’s no surprise that the desktop, a paragon of immobility, is in decline. Desktop shopping conversion rates fell 36% on Black Friday and 9.1% on Thanksgiving compared to year-ago totals, according to an analysisconducted by brand personalization solutions firm Monetate. The desktop channel does still boast the highest overall conversion rate at 5.79% on Thanksgiving and 4.41% on Black Friday, Monetate added.
Digital shopping is also cannibalizing traffic to physical stores. Even among consumers who shopped primarily in stores for Black Friday deals last year, 31% planned to shop mostly online this time around, while 20% expected to divide their shopping equally between the physical and digital realms, according to JDA Software Group’s second annual holiday buying survey.
"We did call Black Friday 'Couch Friday,' just because we believe store traffic could be down as much as 3 to 4%," Cowen and Company analyst Oliver Chen told CNBC. Mall-based apparel retailers like Abercrombie & Fitch, Banana Republic and Chico’s were among the hardest hit this year, Stifel analyst Richard Jaffe said in a research note cited by CNBC. Even so, Wal-Mart, Victoria’s Secret, Foot Locker and Urban Outfitters all attracted significant foot traffic, said Dana Telsey, CEO of Telsey Advisory Group.
Some Black Friday habits are simply hard to break, said Michael Brown, a partner in global strategy and management consultant A.T. Kearney’s retail practice. “The retail store is still an important part of the consumer shopping experience,” Brown told Retail Dive. “Stores are critical for social and inspirational shopping needs.”
Amazon began rolling out Black Friday deals all the way back on Nov. 1, touting a series of discounted prices (some as often as every five minutes) as well as curated gift guides in several categories. As in years past, Amazon paid special attention to its Prime subscribers, offering exclusive deals for users who voice-order through devices powered by its Alexa interactive technology and additional discounts on pre-orders. Amazon also launched an overhauled version of its mobile application ahead of Black Friday, introducing Package X-Ray (allowing iPhone owners to scan a delivered package to see what's in it without opening it) and Search Anything (which enables shoppers to point their phone's camera at a real-world item to pull up a list of similar merchandise options).
The extra effort paid off. Amazon shoppers across the U.S. ordered more items on Black Friday 2016 than a year ago, according to an email the retailer sent to Retail Dive. Given that Amazon doesn’t disclose actual sales totals, it’s impossible to estimate just how well it fared on Black Friday, but the company notes that its Black Friday mobile app orders exceeded Thanksgiving mobile sales, as well as Cyber Monday and Black Friday 2015 totals. The voice-activated Echo Dot speaker was the best-selling item across the Amazon platform on both Thanksgiving and Black Friday — in fact, the Alexa-enabled product sold out and won’t be back in stock until Dec. 1. Shoppers also purchased more than 3 million toys on Black Friday, Amazon added.
Amazon offered the deepest average discount on Black Friday promotions of any major U.S. retailer, with shoppers saving 42% off on average, compared to 36% off on Best Buy, 35% off on Target and 33% on Wal-Mart, according to data from e-commerce analytics firm Clavis Insight supplied to Retail Dive. Apparel and jewelry accounted for more Amazon Black Friday deals than other category, with about 1,700 products discounted, Clavis notes — in addition, Amazon offered more than 450 deals on mobile phones, about eight times the number available via Wal-Mart.
Despite criticism over its decision to open stores at 5 p.m. on Thanksgiving(an hour earlier than last year), Macy’s got off to a flying start. “I got to the opening at [Macy's flagship store in] Herald Square in New York City at 5 p.m. on Thanksgiving. It looked as strong as I have ever seen it at any time,” Macy’s CEO Terry Lundgren told TheStreet on Black Friday morning. “We estimate there were over 16,000 people waiting outside our store yesterday, and they were ready to shop.”
Then the wheels came off. Macy’s website suffered an extended Black Friday disruption, directing shoppers to a page blaming “heavier traffic than normal,” complete with a countdown clock indicating when consumers could again access the main site. “We are still taking a high volume of online orders, and we are working quickly to alleviate the delay issue, which we hope to have resolved shortly,” a Macy’s spokesperson said Friday afternoon in an e-mail to Bloomberg. Macy’s mobile website also experienced technical issues, and Victoria’s Secret, Express and Pier 1 Imports experienced Black Friday hiccups as well, Bloomberg reported.
All failed to heed the lessons of Black Fridays past. Last year alone, surging web traffic knocked luxury department store Neiman Marcus offline for much of Black Friday and into Saturday; retailers including Newegg, Jet, Foot Locker and Wal-Mart also experienced significant tech issues, and Target infamously crashed on Cyber Monday.
It all comes down to preparation, according to Brett Sanderson, product marketing manager for shopper advertising at consumer information network Bazaarvoice. “Retailers are bombarded with more traffic than they can handle — some product takes off, and all of a sudden you have more traffic than you’ve ever seen before,” Sanderson recently told Retail Dive. “You need to test to make sure your site doesn’t go down. Be prepared for anything that can happen. You can’t afford to miss out. If you can’t capitalize on this peak period, it can break your year."
Winner: The environment
Outdoor retailer Patagonia donated 100% of its Black Friday sales to grassroots environmental organizations. “These are small groups, often underfunded and under the radar, who work on the front lines,” Patagonia CEO Rose Marcario wrote in a blog post announcing the move. “The support we can give is more important now than ever. We’ll also provide information in our stores and on our website about how to get in touch with these groups and easily be active in your own communities — on Black Friday and every day.” Patagonia already gives away 1% of annual sales to environmental causes, totaling $74 million to date.
Outdoor co-op retailer REI also reprised its successful #OptOutside campaign, shuttering all 149 of its stores on both Thanksgiving and Black Friday, processing no online sales and paying its 12,287 employees to take those days off and head outdoors instead. This time, REI partnered with outdoor community experts to share insights on topics including the importance of nurturing and conserving public lands. REI gives 70% of its profits back to the outdoor community each year.
Loser: Human decency
At least two people were shot and killed in their quest for Black Friday bargains. Authorities said a fight over a parking spot outside a Reno, NV Wal-Mart turned deadly when one of the drivers shot and killed a 33-year-old man. A 21-year-old college student was also fatally wounded outside a Macy’s in Atlantic County, NJ, although the motives remain unclear. Still another shooting occurred at Memphis’ Wolfchase Galleria, leaving one man injured.
“Anytime someone loses their life, it’s very traumatic, especially on a holiday,” shopper Christina Tabarrini told the New York Post in the wake of the Macy’s shooting. “It doesn’t prevent me from shopping. We’ve just become pretty numb to the fact that there are shootings that go on.”
Another quarrel over a parking space, this time outside of the Houston Premium Outlets mall near Cypress, TX, culminated in two women trading blows. From there, two other women joined the fracas and clobbered each other. Shoppers also scuffled over electronics at a Wal-Mart in Columbus, MS:
Last but not least, an estimated 20,000 shoppers laid waste to a Nike factory store at the Seattle Premium Outlets in Tulalip, WA, leaving mountains of iconic orange shoeboxes upturned in their frenzy for deals. “I thought there was an earthquake that happened,” shopper Larry Downer told BuzzFeed News. “It was unreal.”
One Twitter user summed up the chaos thusly:
I hate people. pic.twitter.com/bPfFwqFbn4