We dug into the 2018 performance of nineteen top retail brands to analyze the impact of Black Friday ahead of the coming shopping season, and there are clear trends that speak to the changing offline retail landscape.
What does the data tell us and how does this align with trends seen over the last year?
Black Friday’s Offline Impact is Declining
With reports that 2018’s Black Friday saw drops in sales performance, it was unsurprising to see drops in visits as well. Of the nineteen brands analyzed for this study, only three saw growth in visits on Black Friday from 2017 to 2018. Marshalls led the way with 14.1% growth, while TJ Maxx followed close behind at 12.7% and Dicks enjoyed a visit increase of 4.4%.
Many brands saw minimal declines year over year, including Kohls, Target, Walmart, and Bloomingdales, who all endured visit declines of less than 1.5%. Yet, this belies the larger drops that were experienced by Best Buy at 10.4%, Home Depot at 14.0% and Nordstrom at 15.8%.
The end result was an overall collective decrease of 4.1% on Black Friday 2018 when compared to the same day in 2017.
Potential causes abound, but there are several that could have an ongoing impact. Firstly, eCommerce is becoming a greater component of the Black Friday experience. Whether it be the convenience, the speed, or the ability to avoid the lines and madness of the Black Friday experience - eCommerce is a growing piece of the Black Friday puzzle that reduces visits.
Secondly, the rise of new retail holidays - from Cyber Monday to extended deals that reach as far as the week before Christmas - remove the urgency from Black Friday as the be-all and end-all of holiday season shopping. And this is borne out by data. Several of the brands that saw drops Year-over-Year on Black Friday actually saw increases overall for the wider period.
Target saw their overall traffic increase by over 1% Year over Year even with the Black Friday drop, while Nike saw a Year-over-Year visit increase of over 1% in December 2018 following a drop in November. These results emphasize a critical point that the centrality that Black Friday used to have is actually spreading throughout the holiday season. This decreases the urgency of a specific day but isn’t necessarily having a negative impact on overall visits.
For others, like Walmart, Black Friday finishes a distant second to a more significant peak right before Christmas. Taking the period from October 2017 through December 2018, Black Friday visits rose 61.0% above the baseline in 2017 and 58.7% above in 2018. This was surpassed both years on the 22nd and 23rd of December where Walmart Supercenter visits rose 83.0% and 98.8% above the baseline in 2017 and 81.2% and 84.1% above the baseline in 2018.
There is also a significant risk of exaggerating the decline of Black Friday even with the declines. Best Buy, which saw a significant drop from 2017 to 2018, still saw visits that rose 504.5% above the baseline for the period from October 2017 through December 2018. While this is still lower than the 575.3% jump in 2017, the number is still a huge testament to the offline impact of Black Friday on Best Buy sales. It also dovetails with other factors like store closings and a greater emphasis on digital channels and Buy Online Pick Up In-Store initiatives.
Target too saw a drop from 156.9% above the baseline in 2017 to 153.6% above in 2018. Yet, again, it would require a tremendous stretch to not consider Black Friday as a powerful asset for the brand. Instead, a likelier reality is that offline visits on Black Friday will simply take up a slightly smaller piece of the pie, that brands are looking to increase with a more comprehensive approach to the holiday season opportunity.
There is also a potential hidden warning in how Back-to-School 2019 was approached. Ahead of this critical retail period, there were reports of a significant retail slowdown. Yet, in the end, brands like Walmart and Target saw significant Year-over-Year jumps that had a huge impact on quarterly performance.
What does this mean for the holiday season, especially with concerns that fewer actual days could impact sales?
While there was clearly a dip in in-store visits from 2017 to 2018, the idea that a continued or even more dramatic slow down could be in the works is still not proven out by data. In fact, the strength of Prime Day offline combined with the strong Back-to-School performance could even indicate a potential return to glory for Black Friday - speaking to the strength of these attempts to drive excitement and urgency.
So how will holiday shopping’s landmark day unfold this year? Visit Placer.ai to find out.