Shoppers surge into Macy's Herald Square at the 5 p.m. Thanksgiving Day opening.
And they’re off.
Retailers had a good start to holiday 2019 shopping, lifted by mostly favorable weather conditions, accelerating online and mobile shopping, and widespread early but controlled promotions often offering 25 to 50 percent off. Macy’s, Abercrombie & Fitch and other retailers have been seeing momentum since late in the third quarter after sluggish business through most of the period.
Preliminary signs suggest retailers are on track to meet single-digit gains in the 3 to 4 percent range for the holiday season, but there is a long way to go even with six fewer shopping days this year between Thanksgiving and Christmas. As Macy’s Inc. chairman and chief executive officer Jeff Gennette told WWD: “Black Friday is still great, but it doesn’t guarantee a great Christmas.” Macy’s sees the combination of having its stores open at 5 p.m. on Thanksgiving and on Black Friday yielding the company’s biggest shopping period.
Shoppers on Black Friday in New York City.

Shoppers on Black Friday in New York City.  Andrew Morales/WWD

At the opening of the Herald Square flagship at 5 p.m. Thursday, there was the usual massive stream of shoppers seeking doorbusters and deals. “There was 20 minutes of just continuous customers coming in all the entrances.,” said Gennette, who was on the scene. “There will be thousands more throughout the night. It’s a big night for us.” The most popular categories were coats, cashmere, candy and fragrances.

“I don’t see any dearth of people out there,” said Charlie O’Shea, Moody’s vice president and senior credit officer on Friday afternoon.  “Best Buy, Walmart and Target were packed Thursday night, and Target and Walmart were both packed this morning. It’s been steady. Consumer electronics is really the key for the holiday. It’s the category that really pops. The big players will really do well. Besides the stuff they sell very cheap, they’re selling some better margin products.” Overall, “I don’t see any negative surprises. There were some website outages, but that’s kind of good thing to happen,” since it’s related to heavy online traffic causing the crash. “Nobody can predict volume for sure.”

“Based on our checks this morning, promotions and crowds appear under control,” Cowen & Co. indicated in a research report Friday. “We believe shoppers have completed more shopping earlier and in-store traffic continues to trend negative. Our channel checks were most encouraging at Walmart, Nordstrom and Target, given sharp price execution and captivating deals. We maintain our overall holiday forecast of plus-2 to 3 percent inclusive of plus-20 to 30 percent online growth.” Cowen is less encouraged by Gap, Macy’s and Kohl’s due to their concentrations on women’s apparel, a sluggish area for several seasons.

Shoppers on Black Friday in New York City.

Shoppers on Black Friday in New York City.  Andrew Morales/WWD

“I’m sticking to my 4.25 percent holiday gain. It could be a better than expected holiday season,” predicted retail analyst Walter Loeb.  His reasoning: consumers are in good financial shape; significant price hikes from tariffs don’t arrive until next year, and the weather turned cold.

However, there are always peaks and valleys in the holiday shopping pattern. “It’s going to peter out by around 5 today,” said Loeb on Friday. “Tomorrow will be a good day with a lot of business. I also believe that on Dec. 17, retailers will slash prices” in a heightened promotional push to compensate for the shorter selling season.

“Today the big box discounters still look like real winners, sporting goods retailers are making a comeback, and apparel specialty and department stores are still the problem children because there is more apparel capacity than demand,” said Craig Johnson, president of Customer Growth Partners, which dispatched 18 staffers to monitor  shopping venues around the country. He cited Walmart, Target, as well as Costco as early winners, noting that Costco, after briefly crashing online, extended Thanksgiving specials once it went back online.

Johnson is projected a season with 5-plus sales gains, due to the nation’s job and wage growth, the S&P 500 up 24 percent year to date, and benign weather around most of the country.

On Friday, J. Crew offered 50 percent off on select full price items and free shipping for rewards customers. Theory offered 25 percent off $300 and 30 percent off $600 in a “buy more, save more” promotion. Joe Fresh offered 25 percent off and some door crashers like sherpa jackets reduced to $16 from $29; Bed Bath & Beyond offered 25 percent off an entire purchase instead of the usual one-item only deal; Rent the Runway was 40 percent, and Kate Spade up to 70 percent off.

Nordstrom’s “cyber sale” offered up to 50 percent on women’s products and promotional cards of $25 for spending $125; $50 for spending $250 and $100 for spending $400, though there were numerous exclusions. “You’ll get an e-mail with your reward by Jan. 17. Then spend it in stores or online at Nordstrom until March 15, 2020,” Nordstrom said.

With all the early promoting and Thanksgiving Day store openings, Black Friday has become a calmer — but still key — shopping day. “The Black Friday holiday weekend remains critical as 69 percent of those who expressed interest to shop this weekend plan to shop on Black Friday,” Cowen said, citing a Prosper Analytics survey. “We do expect adjusted store-traffic to be down low-single-digits; meanwhile, key positives from our checks include seasonably favorable weather, better-than-feared promotions and sharp opening-point price execution.”

According to Planalytics, which helps retailers in their planning based on weather patterns and forecasts, many markets in the western U.S. will be 5 to 20 degrees colder this weekend compared to last year, after just experiencing a cold and snowy Thanksgiving. That has driven sales of winter apparel and accessories and snow removal items and shifted more purchasing online.

Los Angeles had its coldest Thanksgiving in over 50 years and its wettest since 1983 and is tracking to have its coldest Black Friday weekend since 2010, Planalytics said. San Francisco, Seattle, Las Vegas and San Diego all had their coldest Thanksgivings since 2010. There was heavy snowfall from Denver to Minneapolis, though much of it hit smaller markets such as Montana where retailers have less exposure.
In the east, it’s been a dry week, with temperatures in the 30s and 40s, supporting traffic in stores and malls. However, it’s not nearly as cold as last year, with New York and Boston experiencing their warmest Thanksgivings since 2015 and Baltimore, its warmest since 2007.
Luckily for East Coast retailers, wet weather isn’t expected until Sunday, which is always the slowest shopping day of Black Friday period as Americans recover from shopping in the days before and stay home. For the Thursday to Sunday period, markets in the Northeast and mid-Atlantic region are trending 5 to 15 degrees warmer than a year ago.
Based on the weather, Planalytics forecast that sweater sales this week would be up 6 percent in San Francisco and 9 percent in Phoenix, but down 3 percent in Miami. Winter boots would be up 48 percent in Denver and 5 percent in Minneapolis but down 10 percent in Baltimore. Thermals would be up 16 percent in L.A. but down 10 percent in New York.
“It’s very much a regional story and a total flip from last year,” Evan Gold, executive vice president of Planalytics, told WWD on Friday. He sees traffic in Eastern stores and malls good from Thanksgiving through Saturday, though sales of sweaters, boots and thermals will ultimately be down, as retailers find it hard to meet comps from last year.
“Black Friday weeklong sales are growing steadily and have for many years,” pulling business out of early December, observed Johnson, of Customer Growth Partners. Over Black Friday itself, sales as a percent of November to December total retail sales (excluding autos, gas and restaurants) have risen to 9.5 percent this year, from 7.5 percent in 2000.
He sees Black Friday’s share of total sales “plateauing” due to many stores that opened on the afternoon of Thanksgiving reverting to closing them for the holiday.

This year, Macy’s, Best Buy, Target and Bed Bath & Beyond all opened at 5 p.m. on Thanksgiving Day, while Kmart stores opened Thanksgiving morning and J.C. Penney opened at 2 p.m. Thanksgiving and was scheduled to remain open until 10 p.m. Friday.

Bloomingdale’s, Nordstrom, Costco and T.J. Maxx stayed closed Thanksgiving, while Woodbury Common, the nation’s largest outlet mall, opened at 9 a.m. on Thanksgiving and was scheduled to stay open till 11 p.m. Friday night.
“The role of Black Friday itself has changed sharply over the years, when in the early 2000s our nationwide field team of researchers would routinely see lines of 600-plus shoppers freezing in the cold at 4 a.m. waiting to get into Bed, Bath & Beyond, Walmart, etc. to get the best deals on wide-screen TVs, video games like Nintendo Wii and computers,” said Johnson. “The excitement would generate traffic jams down the interstates at outlet malls like Woodbury Common and Orlando Premium Outlets. By about 2014, stores started opening Thanksgiving afternoon, though some are now closing to give their employees time with their families. Now, the morning hours on Black Friday are relatively restrained at traditional malls and the big crowds don’t arrive till midday, more similar to Saturday and Sunday,” after Black Friday.
He said Black Friday sales proper accounted for about 60 percent of the four-day weekend back in 2000 and has declined sharply to about 48 percent this year, with the balance spread among Thanksgiving, Saturday and Sunday.
As a result, Black Friday has not been the largest shopping day of the season since 2016. In 2017 and 2018 Super Saturday, the last Saturday before Christmas, was the largest shopping day of the season, Johnson said. The same is expected for this year.

According to Adobe Analytics data, Thanksgiving Day hit new records for large and small retailers, with consumers spending $4.2 billion, or 14.5 percent more than last year, making this the first time Thanksgiving surpassed $4 billion.

E-commerce giants saw a 244 percent boost in sales on Thanksgiving Day; smaller retailers saw a 61 percent increase, Adobe said.

Mobile continued to play a large role: 44.9 percent of that revenue came from smartphones, an increase of 24.4 percent over last year.

Black Friday was on track to hit $7.4 billion in online sales, and as of 9 a.m. in the East, $600 million was already spent online, representing 19.2 percent growth year-over-year.

The full holiday season is tracking at 14.9 percent growth with $57.2 billion spent online between Nov. 1 and Nov. 28,  representing a comparable increase of 16 percent from last year.

Adobe is forecasting $143.7 billion in sales online for the November to December 2019 period and cited sharp discounts on televisions, computers, toys, appliances and sporting goods.

While paid search ads continue to dominate the share of all purchases — 24 percent — social networks and e-mail are growing the fastest, at 20 percent and 9.4 percent, respectively, Adobe said.

Other trends on the rise this holiday: buy online, pick up in-store; buying products that support charitable giving; buying products that are sustainable in origin, and resale.

 

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