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Online shoppers make up a growing share of holiday weekend traffic

Columbia, Md -- 11/27/15 -- Shoppers at The Mall in Columbia on Black Friday.
Columbia, Md -- 11/27/15 -- Shoppers at The Mall in Columbia on Black Friday. (Kim Hairston / Baltimore Sun)

Sales and store traffic over the Black Friday weekend told retailers less about how much holiday shoppers will spend this year and more about how they'll do that spending.

At first blush, the sales numbers were dismal. Black Friday sales in stores fell 10 percent to $10.4 billion from $11.6 billion last year, according to preliminary estimates from retail research firm ShopperTrak.

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But business varied from store to store over the long weekend, as hours and special deals were extended to both before and after the day after Thanksgiving. For the first year, online shoppers outpaced numbers of consumers in the stores, the National Retail Federation said in its post-Black Friday survey.

Nearly 102 million people said they shopped in stores over the four-day Thanksgiving weekend, but more than 103 million said they shopped online, according to the federation. Overall, more than 151 million people said they shopped at stores or online, or both.

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The surge in online shopping has deflated Cyber Monday, which once was a big day for retailers as workers went looking on the Internet for deals and things they couldn't find in stores after the long holiday weekend.

For many retailers, "their website is their single largest location, and they've become more comfortable in trying to push customers to that location," said John Talbott, associate director of the Kelley School's Center for Education and Research in Retailing at Indiana University.

"For so long, we had this bifurcated structure of brick-and-mortar and e-commerce, and discussions about where people should go," he said. "Now Amazon has a store. Target's biggest location is the website, so it's merged back to let's do what's right for the consumer. This is finally the year when they've all figured it out."

Shoppers spent, on average, nearly $300 per person, with three quarters of the spending going toward gifts, reported the retail federation, which expects holiday retail sales to rise 3.7 percent over last year..

Spending was expected to continue with another 121 million online shoppers on Cyber Monday, found another NRF survey, also conducted for the retail group by Prosper Insights & Analytics. That was down slightly from last year, likely because promotions have been available for several weeks.

Under Armour, which runs 27 e-commerce sites around the globe, launched Black Friday online sales last Wednesday, with 25 percent off on items such as Big Logo hoodies and fleece sweatpants, continuing a strategy of offering discounts on a select few items.

"We're a premium brand, and we don't discount our product much," said Jason LaRose, chief revenue officer for digital at the Baltimore-based athletic apparel company.

Under Armour has seen explosive digital sales growth and expects the momentum to continue through the holidays, LaRose said. As much as two-thirds of e-commerce sales are coming at times from mobile devices, he added.

"What's different for us and has been different over the last handful of years is Cyber Monday in particular" or a specific block of time; "those very specific points are a lot less relevant now," he said. "We pay attention to what's happening over the six days as opposed to a specific time."

Shares in Under Armour fell nearly 4 percent Monday to $86.22 after Piper Jaffray analyst Erinn Murphy downgraded the stock, citing the brand's promotions, which she deemed deeper than they were last year. As a result she cut her forecast for its fourth-quarter earnings and stock price.

"This year, we saw Black Friday ads emerge before Halloween, as retailers aimed to get at the shopper's wallet early," said Kevin Kearns, chief revenue officer for ShopperTrak, which still expects store salkes to rise 2.4 percent this holiday season. "And from our data, we saw greater retail sales generated prior to the Black Friday weekend, which is a result of retailers successfully elongating the holiday season."

Still nearly three-quarters of those who shopped over the weekend did so on Black Friday itself, according to the retail federation.

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Best Buy reported that weekend shoppers bought hundreds of thousands of TVs, millions of movies, music and games, and twice as many "wearables," such as smart watches and health-and-fitness trackers, as a year ago.

Michael Binetti, managing director and retail analyst for UBS Investment Bank in New York, said he saw mixed results for Black Friday,

"At first glance, total Black Friday traffic seems visibly lighter than recent years, with several retailers commenting to us on slower, and more dispersed traffic due to the lack of coordinated store opening times across the mall (and earlier cyber promos)," he said in a report released Monday.

But the weekend gave a boost to a handful of specialty stores, including Victoria's Secret and teen retailers such as American Eagle Outfitters, Aeropostale and Hollister, he said.

Elkridge resident Brandie Villafane shopped on Thanksgiving at Wal-Mart and Target and only decided to come out on Black Friday because of discounts at Lululemon, where she said "nothing ever goes on sale." She and her 13-year-old daughter, Nylah, bought leggings and other apparel for themselves at the yoga wear retailer at The Mall at Columbia.

Claudia Towles, who co-owns Baltimore-based aMuse toy shop with her husband, had low expectations for Black Friday but was pleasantly surprised as sales at her two locations, Fells Point and Quarry Lake, rose 24 percent over last year. Saturday also ended stronger than last year.

"Black Friday was amazing for us," Towles said. "We really weren't expecting much traffic, but we were significantly higher than last year. ... We had people who were lined up around the displays near the door."

She said many of her customers saw the store as a destination for educational toys and that science and technology toys have been popular.

"Consumers have had to really think about how they're spending money and what they're spending it on and where they're spending it, and being more mindful of it," which benefits some specialty stores, Towles said.

Given the results of the weekend, "I think we're going to finish strong," she said.

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