In a Thanksgiving weekend unlike any other, department stores and fashion specialty retailers fought hard for business and met their modest expectations.
They extended Black Friday promotions through the weekend, from weeks before. They emphasized over and over again the measures implemented to help shoppers in stores feel safe from COVID-19. And assortments, while lean, were tilted toward lifestyle changes stemming from the health crisis.
Hardline and mass merchants fared much better. Home furnishings, home office supplies, computers, TVs, games and toys, as well as sweat clothes, sneakers, beauty, wellness and jewelry sold the best across the retail landscape.
With the elongated season that started four to six weeks ago when retailers unleashed holiday campaigns and Black Friday promotions, last weekend proved far less critical than in 2019 or years before, though still important to November overall. When all is said and done, most retailers, even those weighted toward soft lines, should feel OK with the season, and come out on plan, based on significantly reduced inventories and sales goals.
“We have been cautiously optimistic headed into the holiday season and were pleased that overall Black Friday weekend performance is in line with our expectations,” Paige Thomas, president and chief executive officer of Saks Off 5th, said. “We’ve been focused on being the ultimate luxury gift destination and that theme came through with our customers’ top purchases this weekend — fine jewelry, fragrances, handbags and leather goods were standout categories at Saks Off 5th.”
“There was a very different pattern compared to any year prior,” said Lizanne Kindler, ceo of Talbots. “There were definitely fewer peaks and valleys.”
As expected, record-breaking levels of e-commerce continued due to the impact of the coronavirus and the resulting sheltering-in, and because greater numbers of consumers are getting used to shopping online and liking the convenience of it. In addition, retailers set early deadlines for ordering gifts to insure they would be delivered before Christmas. A few retailers who wished to remain anonymous said traffic at their brick-and-mortar locations was down 20 to 30 percent over the weekend.
On Black Friday alone, U.S. consumers spent $9 billion online, according to Adobe Analytics, based on about 1 trillion site visits to 80 of the largest retailers. This year’s shopping is a 21.6 percent increase over last year, when Black Friday shopping totaled $7.6 billion, the firm said. People spent $6.3 million every minute online on Friday.
But this year’s record Black Friday shopping is expected to be eclipsed on Cyber Monday, when Adobe believes sales will fall roughly between $11 billion and $12 billion, an increase of at least 15 percent over record sales last year.
“We are seeing strong growth as consumers continue to move shopping from offline to online this year,” said Taylor Schreiner, a director at Adobe Digital Insights. He noted that as expected, electronics and toys, with Apple AirPods and watches being in demand, alongside hoverboards, Lego sets and video games, all sold well. But he also pointed to an increase in purchases over the weekend of “unorthodox” Black Friday items, like groceries, alcohol, apparel and personal-care products. Sales in the personal-care category surged 556 percent on Friday.
Shopify said that over 1 million independent and direct-to-consumer businesses that use its services across 175 countries saw Black Friday sales online and offline jump 75 percent to $2.4 billion. Shopify’s average cart size rose 11.4 percent to $90.70 from $81.40 a year earlier. Apparel and accessories was the top product category, followed by health and beauty and then home and garden.
New York was the top-selling city and was trailed by London and Los Angeles. Among the trending fashion items on the platform were Step One’s boxer brief, GymShark’s Vital seamless leggings and Les Lunes’ The Paul Jumpsuit.
Loren Padelford, vice president at Shopify, said the coronavirus has only made shopping more digital, a trend that accelerated on Black Friday. “This is a big, sustained move that we don’t think goes backward,” Padelford said. “Consumers are voting with their dollars and they’re for local, they’re voting for independent, they’re voting for direct-to-consumer. If anything, the holdouts, the folks who were still a little bit resistant about shopping online, didn’t have a choice [given social distancing constraints],” Padelford said. “They kind of got pushed into learning how to do it, learned how simple it could be, how easy it could be, how fun it could be, and just kind of picked it up.” Online shopping, he added, “is here to stay. It’s the center of gravity now and forever.”
Criteo, a commerce marketing firm, said Black Friday sales jumped 177 percent over October but were down 5 percent year-over-year. In the first three weeks of November, sales rose 7 percent and fashion products were strong, with sales up 240 percent.
Ken Ohashi, president of Brooks Brothers, said the coronavirus prompted the company to “plan the business very differently” and start promoting the holiday in the second week of November.
“On Singles’ Day on 11-11, we ran Black Friday-like promotions online,” he said, with 30 percent to 50 percent off most products. Those same promotions ran in stores prior to Thanksgiving. “It drove a lot of demand,” he said. Surprisingly given the more casual apparel consumers have adopted while working from home, Brooks’ dress shirts are ” by far the number-one category,” he said. “It appears they’re still being seen as a gift item.” Other popular sellers were sweaters and knits, and online, in particular a V-neck cashmere sweater for $299.
For November, Ohashi expects sales to be on plan, but said there is a lot of “uncertainty” about December. “[Store] Traffic is down without a doubt. We’re cautiously optimistic but we know the consumer is gravitating to online, so we’re investing in digital and marketing to fuel that fire.” He also believes that January and February will be more important than in the past.
Ken Giddon, president of Rothmans, which operates stores on Union Square in Manhattan and in Westchester, N.Y., said, “Who would have guessed our little suburban store would be doing more business than our huge city store?”
Although he is selling some sweatshirts, comfortable clothes and “the occasional suit for a wedding — but there are not a lot of people going to weddings” — overall, both stores are down. “We sell products people don’t need. But we’re being realistic and our expenses are in line with our revenues,” Giddon said.
Similarly, Bob Mitchell, co-ceo of Mitchells Stores, said, “Overall, business is still incredibly challenging. Traffic across the board is down 30 to 70 percent. This week, the decreases were smaller though, so it’s encouraging that people are kicking into holiday gear.”
He said the dressier parts of the business are seeing “zero demand,” and “all the action” is in men’s sportswear, sneakers, women’s jewelry and handbags. Top brands include Golden Goose sneakers, Celine handbags, Brunello Cucinelli and Loro Piana sportswear on the luxury end and Faherty, Rhone and Wahts on the more-casual/active side. Moncler and Henro outerwear are also performing, as is Vince.
With store traffic down, Mitchell said the company has “pivoted” and more than half of all sales are now “digitally assisted” with virtual appointments, curbside pickup and other services. “We’re being much more creative,” he said, adding that the sales associates are embracing new strategies to stay connected with customers who buy more when they have assistance. “It’s really survival of the fittest,” he said. Because the retailer has no debt, “we’re in a position to ride out the storm.”
A Macy’s spokeswoman cited luxury; fine jewelry, particularly diamond cluster stud earrings; fragrance sets, including the $15 fragrance mini sampler; toys, and high-value makeup and skin care sets as strong sellers over the weekend. “The under $10 price point was a customer favorite and items in this price range moved quickly,” said the spokeswoman. She also cited activewear, sleepwear, loungewear, cookware sets, air fryers, blenders and vacuums as popular items.
“Black Friday is a pale gray shadow of itself,” said Craig Johnson, president of Customer Growth Partners. “It’s strictly a promotional peg for promotions that took place earlier in November if not in October.” In terms of being one of the biggest volume days of the year, Black Friday has been reduced to possibly fourth place, behind Super Saturday, which is the last Saturday before Christmas, then the two Saturdays preceding Super Saturday. Wednesday, Dec. 23 (two days before Christmas), Johnson suggested, will also be a major volume day.
CGP dispatches 18 associates to over 100 shopping venues during the holiday season. “Overall footfall in department stores was down about 23 to 24 percent for November,” Johnson said. “Crowds were muted, but steady, not dead. It will be a very strong hardlines Christmas to the detriment of soft lines. Electronics, TVs, laptops, AirPods, video games, major appliances, furniture, home improvement are all selling. Softlines for the most part is ailing.”
“The big winners continue to be the top 10 retailers in the country — Walmart, Amazon, Costco, Target have all been very strong, up double digits,” he said. Home Depot, Lowe’s, Best Buy and TJX, mostly with its Home Goods division, also are doing well, Johnson added. “Macy’s is having a better than expected holiday. They’re doing OK. They picked up the pace since the summer. People are looking for value but they are spending.”
“I would expect to see that all things casual sold reasonably well and all things workwear did not,” said Bob D’Loren, ceo of Xcel Brands, which has Judith Ripka, C. Wonder, Halston, Isaac Mizrahi and Longaberger brands in its portfolio. The company sells through various channels, including retailers, e-commerce and home shopping channels, and does not currently operate retail stores. “I do believe when we come out of this pandemic, whether it’s the third quarter or fourth quarter of 2021, after enough people have taken the vaccine, we will likely see some pent-up demand.
“Our jewelry business has picked up significantly,” D’Loren said. “Revenues on Judith Ripka were up 356 percent for Friday, Saturday and through Sunday morning, the conversion rate was up 97 percent, transactions were up 168 percent, and the average order value was up 70 percent.”
On overall inventories, D’Loren said, “We pulled back on Q3 and Q4 and got our heads wrapped around the inventory risk. With whatever inventory we had, there seems to be a demand for.”
“There was a big increase in the online business, Monday to Wednesday last week was strong, but the early deals definitely took something out of the usual Black Friday boom,” said a major vendor to mass retailers. “Things picked up on Saturday, but overall traffic in the stores was disappointing. To get a really true read on the season, you have to consider November and December results together. Who knows at this point whether all the early deals and online made up for what’s happening in the stores. My guess at this point is that with fewer people traveling, less being spent on airlines, hotels and gas and more being spent on home, food and sweat clothes, stores could meet or beat their plans.”
Among other key trends as November wrapped up, the pace of buying flattened because of early and extended holiday campaigns. Off-mall stores and strip centers saw better traffic than enclosed malls. There were none of the shopper stampedes seen in past years because of COVID-19. Retailers such as Walmart and Target wisely skipped early morning “doorbusters” on Black Friday.
Discounts on Black Friday through the weekend were generally 20 to 50 percent, leaving room for bigger markdowns in December. Gap Inc., for example, averaged 35 percent; Gap and Banana Republic brands offered 50 percent off; Old Navy, up to 50 percent off, and Athleta offered 20 percent off.
Retailers stepped up services like curbside pickups, quick delivery, and payment options and the vast majority stayed closed Thanksgiving Day. While in-store shopping was tepid, there is some hope for improved traffic in December. Temperatures will drop, increasing the demand for cold weather apparel and accessories. Additionally, consumers still needing to complete their gift lists will do so in-store, so they know they have the gifts they need in time for the holidays, without the risk of late deliveries.
The 415-unit Talbots started offering sales in the first week of November and stretched out sales and promotions through the month. “We were prepared and planned into a very different Black Friday this year,” said Kindler. On Thanksgiving Day and Black Friday, there were markdowns and a gift-with-purchase tartan plaid blanket for those spending $150 or more online and in stores. “The blanket went fast and was a great draw for our customers,” said Kindler.
Talbots’ online business was very strong with best-sellers “reflecting where we are as a country, with our comfortable lounge and T By Talbots collections in high demand,” said the ceo. Talbots sweaters and knit tops were also top purchases, and accessories, “perfect for self-purchase and gifting, were also overall very strong.” Talbots off-mall locations such as Derby Street in Hingham, Mass., performed better than mall locations like the shop in Short Hills, N.J. The apprehension of entering a store due to concerns “was clearly apparent and affected store traffic,” Kindler said.
According to RetailMeNot, a web site for coupons, discount depth was in line with last year, but there was greater availability of codes and free shipping deals as retailers focused promotional efforts online. With so many retailers offering Black Friday deals all November long, they promoted policies and shopping options that empower the consumer and boost shopping confidence: low price guarantees, flexible return policies and longer return windows, increased availability of buy online-pick up in store, curbside, and pay over time options.
As for food and drink, branding firm Within, which tracks online performance of brands, said that things like gift baskets likely drove conversion rates, which were up 80 percent on Black Friday. But apparel fell by 5 percent. The use of in-store and curbside pickup for online purchases increased 52 percent this year and purchases made on mobile grew by 25 percent, accounting for 40 percent of all online sales.
Ben Rodier, a cofounder of Salesfloor, which manages clienteling and chat services for Saks Fifth Avenue, Bloomingdale’s, Chico’s and Pandora, among others, said that his platform saw a big increase in transactions through such services as well. On Black Friday his clients saw the biggest transaction volume through its services than ever and more than the previous three years combined. “Growth was coming this year no matter what, but if you look at just Thanksgiving week, transactions are trending up 55 percent year-over-year,” Rodier said. “And basket sizes are 280 percent larger than the week prior.”
Target declined to address specifically its post-Thanksgiving shopping trends, though a spokesperson pointed to the big-box retailer’s strategy this year of offering discounts throughout November, in an effort to avoid crowds in stores. In a note early last week, Target offered a vague summation of “millions” of shoppers having saved “millions” of dollars on its sales so far.
Walmart also stretched its holiday sales over many days and made many popular items available online only, to avoid the throngs eager for discounted goods. Scott McCall, Walmart’s chief merchandising officer, said in a statement that “millions” shopped the store for Black Friday sales. The most popular items were wireless headphones, home appliances like coffee makers and robotic vacuums and Walmart’s own brand of TVs.
Big stores weren’t the only ones coming out ahead. Adobe found that small businesses saw a 349 percent increase in online sales on Thanksgiving and Black Friday, compared to a daily average in October. Last year, small operators saw a 173 percent increase.
Based on Adobe’s survey, 38 percent of shoppers said they “will make a deliberate effort” to support small business this holiday season. Large retailers still gained more, with a 403 percent increase.
“There’s a lot of online social activity with people sharing lists of small, local businesses that are open [and] mom-and-pops that are offering curbside — people are aware of the trials and tribulations these businesses are going through,” said Sarah Engel, chief marketing officer at January Digital, which runs ad campaigns and tracks the performances of brands, from Nars to Tumi.
“A lot of small businesses have done a good job of being agile,” said Engel, noting that providing personal service, like FaceTime for new products, and curbside, “a lot of local retailers are doing a great job at that. It’s mid-tier brands having a harder time.”
As for overall sales around the holiday this year, Engel said there was a definite lull in shopping up to Black Friday, despite major retailers offering early discounts. “Heading up to the holiday week, there was a lot of online searching and saving, and not a lot of buying,” she said. “But that paid off because it was a lot of quick conversions on Friday. Even though a lot of sales had already been announced, people wanted to wait to make sure that would be the lowest price.
“Retail has always had the challenge of comps. Next year, it’s going to be very hard to comp if you don’t get into sales earlier,” Engel said. “You will see some specific sale days happen, but I don’t think we’ll go back to a traditional Black Friday/Cyber Monday schedule. That was already changing,” Engel added. “But this year is the nail in the coffin.”
“Just about everywhere was warm. This was the warmest and driest Black Friday weekend since 2017. No major markets were impacted by snowfall,” said Evan Gold, executive vice president of global partnerships and alliances at Planalytics, a firm that helps retailers plan their businesses based on forecasting the weather. “From a business perspective, obviously the demand for cold weather apparel and hot food was limited. Even though more people have been shopping online, the weather still has a big impact on what they’re buying. Instead of gloves, sweaters, jackets and blankets, they were buying more electronics, toys, and a lot for outdoor holiday decorating.” The mild weather this past weekend also facilitated curbside and in-store package pickups, Gold noted.
“December will be colder and slightly drier than last year, which was the fifth warmest December in 125 years. The cold should help sales of cold weather merchandise, and when we pass these shipping windows [for receiving packages before Christmas] people will go out to the stores to purchase gifts,” predicted Gold.
Customer Growth Partners’ forecast for holiday sales is among the most optimistic. “Based on everything we have seen in November up to Saturday night is fully consistent with our 5.8 percent forecast. If anything our forecast may come in a little light,” Johnson said, adding that holiday sales could be up as high as 6 to 7 percent up on last year. “Traffic is clearly lower but conversion rates are up on average 3 to 5 percent, muting the effect of lower traffic.” Johnson also said that some retailers are already seeing some stockouts, though not in softlines. “The stockouts are coming in video games, outdoor patio heaters, toilet paper and paper towels, disinfectants, Clorox wipes, some electronics and major appliances — you can’t receive a major appliance before late January.”
Rick Maicki, managing director of corporate finance for Berkeley Research, was among the more somber forecasters, stating, “The overall season is going to be elongated and pulled forward” and that during Thanksgiving weekend, brick-and-mortar sales were down and e-commerce sales were actually flat to last year as many consumers took advantage of early promotions and going out of business sales earlier in the year.”
He’s not expecting December to be significantly better with rising unemployment and the loss of the federal stimulus. His colleague Keith Jelinek, retail managing director, said malls were especially hard hit and lifestyle centers were flat this past weekend but outlet centers were strong. Top sellers included comfortable clothing, sweats and pajamas. Overall, “Black Friday has lost a bit of its sizzle,” said Jelinek.
TOP HOLIDAY 2020 TRENDS
Launch Gallery: Black Friday Shoppers in New York City 2020