No stampeding. No stockouts.
Thanksgiving Day and Black Friday turnouts at malls and stores across the country weren’t anywhere near as wild and wooly as in seasons past, yet with their accelerating online businesses, retailers managed to offset the brick and mortar traffic shortfalls.
On Friday, retailers told WWD that they remain hopeful of meeting their modest expectations for the holiday season overall, based on the Thanksgiving weekend business so far. Some advised considering results from store and online businesses on Thanksgiving Day and Black Friday all together, to get a clearer read on holiday business so far.
Still, traffic concerns filtered in. RetailNext, a technology company that tracks brick and mortar shopping patterns, reported Thanksgiving Day traffic at the specialty stores it tracks fell 13.6 percent while sales were down 17.6 percent.
“Mobile shopping emerged last year as a new ‘Thanksgiving family tradition,’ and it looks to be getting even stronger this year,” Retail
Next said in its report. “Instead of running out to the store on Thanksgiving afternoon, more and more shoppers are staying home and browsing online, particularly with mobile devices like phones and tablets.”
A Cowen & Co. research report indicated: “We acknowledge the traffic compare is easy given 2015 Black Friday traffic – minus 14 percent. Nonetheless, we still expect negative traffic given an earlier start this year of the holiday selling season and rise of mobile, which could be as much as 60 percent or more of all traffic, and consumer exhaustion from a saturated promotional environment.”
Among the best performing categories, Cowen cited beauty, electronics, sport and active apparel for men and women, fast fashion apparel retailers like H&M and Primark. “We expect negative store traffic to be more than offset by higher conversion rates, online growth rates, and higher check sizes to drive overall holiday revenue growth in the plus 2 to 3 percent range.”
This year, retailers are buoyed by several factors: cleaner inventories compared to a year ago; colder weather expected to lift sales of outerwear; signs at some stores that apparel overall has picked up; consumers taking to shopping again after the divisive presidential campaign; a longer holiday selling season with two extra days this year between Thanksgiving and Christmas; continued strong gains online.
“We’re not declaring victory yet, but so far, so good,” Jeff Gennette, president of Macy’s Inc. who becomes chief executive officer in February, told WWD.
Jerry Storch, ceo of Hudson’s Bay Co., there was “steady traffic and good results” across the industry on Thanksgiving Day and Black Friday, consistent with earlier industry forecasts for crowd and business increases for the period. The National Retail Federation and Prosper Insights & Analytics have estimated 137.4 million people are planning or considering shopping during Thanksgiving weekend, compared to 135.8 million last year. Most retailers are expecting the holiday 2016 season to be better than last year’s holiday season, up around 3 percent.
“The deals are great. That’s why the customers are there,” Storch said, citing Saks Fifth Avenue’s $75 gift card for spending $150, and Lord & Taylor’s cashmere sweaters priced at $39.99. “You save $120 on those sweaters,” Storch said.
Black Friday store traffic has been diminished by retailers running holiday deals in advance, in some cases a week or two ahead, and by opening stores on Thanksgiving Day. J.C. Penney opened at 3 p.m. Thanksgiving Day; Kohl’s and Macy’s opened at 5 p.m., and Shoe Carnival and Target opened at 6 p.m. But Brooks Brothers and Mall of America stayed closed Thanksgiving Day. In addition, online traffic has been sapping traffic from malls.
Target.com had a record-breaking Thanksgiving Day with double-digit sales growth, the company said. Traffic and sales eclipsed Cyber Monday in 2015, driven largely by doorbusters, with mobile contributing more than 60 percent of the online sales.
At Target, TVs; Apple products, wearables, toys, robotic vacuums, wireless headphones, and gaming systems were strong areas/
Target will offer 15 percent savings on nearly everything in stores and online on Sunday and Monday.
Seventy percent of Walmart.com traffic was driven by mobile.
Wal-Mart released new deals for Cyber Week, which began at 12:01 a.m. Friday, and will continue with online specials throughout the week. Among the items available are men’s and women’s plaid shirts starting at $8; women’s and girl’s pea coats starting at $12, ugly Christmas apparel for the family with sweaters starting at $7, and the Yujin eX500 Robotic vacuum cleaner with camera vision, $139, a $130 savings.
Adobe forecasts that Black Friday will hit $3.05 billion in online revenue, an 11.3 percent growth year-over-year, surpassing $3 billion for the first time, and that this year’s Black Friday will become the first day to exceed $1 billion in mobile shopping revenue. “Mobile shopping continues to surge,” Adobe said.
Top selling electronics so far include iPads, Samsung 4K TVs and LG TVs. Best-selling toys include drones, mini vehicles for kids and Lego sets.
If brick-and-mortar and online sales for Thanksgiving Day and Black Friday are combined, the Black Friday period remains “the Super Bowl of retailing,” Storch said.
“There is so much misinformation about Black Friday,” Storch said. “Some people separate Thanksgiving Day, which as you know is when many stores have decided to open. So you have to include those sales. It’s still the biggest shopping [period] of the year for the market as a whole. It’s an all-channel Black Friday. It’s not all bricks-and-mortar, nor is it all Internet.”
Macy’s cited a big line outside its Herald Square flagship for the 5 p.m. opening Thanksgiving Day — 16,000 people versus 15,000 a year ago.
“It was a very controlled environment. Friendly. People were smiling and waving at the television cameras,” said Terry J. Lundgren, chairman and ceo, who stood with Gennette at the main entrance. “The traffic never stopped pouring in. People were in a good mood. I think they were there as much for the promotions as for socializing.”
Asked about traffic at other Macy locations, Lundgren said, “For the most part, reports are positive across the country.
“The big difference this year versus last year is that we and other retailers had too much inventory [in 2015]. Basically, we were marking down third-quarter inventory, restraining the amount of receipts we could bring in for fourth quarter,” Lundgren said, citing last year’s warm weather and a more challenging retail environment to explain the merchandise backup. “This year, we have a clear point of view” with a “well-edited” assortment, he said.
“All the promotions we have to delight our customers are planned,” Gennette said. “We just don’t have a lot of residual inventory to liquidate. We planned [ahead] all of our specials. It’s a nice mix of high price and low price points, all packed with value.”
Among the best-sellers so far, Gennette cited miniature fragrance bottles from European fashion houses such as Jimmy Choo; tech watches from Samsung, Kors and Apple; $39.99 Charter Club cashmere sweaters; dresses, particularly in girls sizes; home products including high thread count sheets from the Hotel private brand and other bedding labels; pillows with therapeutic qualities, and wireless headphones from Brookstone.
In Manhattan on Black Friday, traffic was more robust in the 34th Street vicinity, with Macy’s as well as H&M, Pink, Banana Republic, Uniqlo and Super Dry getting good crowds, while uptown on Fifth Avenue, those higher priced stores were less busy, with shoppers deterred by security measures around Trump Tower.
The Simon Property Group released information on its Premium Outlet centers around the country, indicating an “incredible day” at Clarksburg Premium Outlets in the Washington D.C. area, on its first Black Friday. PRemium outlets in Montreal was 96 percent full by 11 am on Black Friday, which Chicago area outlet centers were 90 to 100 percent full by 10 am.
However, traffic at Texas outlet center was slow initially but starting to gain momentum in the morning hours.
At Woodbury Common Premium Outlets, in New York, by 11 a.m. “lots were near capacity” and bags from Moncler, Tory Burch, Calvin Klein, and Kate Spade were popular purchases. Simon said that the stores there were reporting generally higher sales than last year.
“Our customers have told us that they want to jump-start their holiday shopping before Black Friday,” said Steve Stickel, head of stores for Old Navy. He said customers didn’t have to wait until Black Friday to take advantage of Old Navy’s “biggest sale of the year” and that Black Friday deals started Nov. 23 and continue through Black Friday weekend and Cyber Monday. Old Navy staged an “Instant Happy” sweepstakes, giving away $100,000 to one winner each day from Nov. 18 to Nov. 25, plus other prizes, and is having in-store events each Saturday through the holiday season including a “jingle jammie PJ party on Dec. 10.
Asked if prices are lower than last year, Stickel replied, “We’re offering incredible deals this year that cut through the highly promotional environment, which include 50 percent off the entire store, which began Nov. 23, and ends tonight [Nov. 25] at midnight.”
Lou Amendola, executive vice president of merchandising for Brooks Brothers, said he’s not expecting the lackluster climate to improve much over the opening weekend of the shopping season. “We’re not feeling the mood for Black Friday will be much different from the current state, which is quite conservative,” he said.
He said customers are buying much more frequently online than in stores, especially at malls.
Amendola said men’s tailored clothing, particularly sport coats, has been the strongest seller of late, but “we’re not sure how that will translate into holiday gift giving.”
Instead, he’s expecting some continued strength in the company’s washable, lightweight merino wool sweater program, which has been garnering interest. “Where you give them innovation in product, the consumer is responding,” he said.
He added that inventories are not overloaded, so Brooks Brothers will not be promoting aggressively this season. Instead, it’ll mimic last year with four shirts for $199 being the primary deal.
Susan Anderson, analyst at FBR & Co., said Target’s Black Friday sales in its stores were again diluted by its online sales and earlier sales that began in early November and heightened the weekend before Black Friday.
Anderson said consumers continued to be deal seeking, which in turn dictated the higher average promotional cadence, some at 60 percent. “Even though inventories were clean, intense competition and the continued shift to online drove higher promotions,” she said. Key items at Target were fashion apparel and active footwear, the analyst noted.
The analyst cited Chico’s and Hanesbrands Inc. as faring the best so far, as they were best able to manage sales and promotions that should lead to good top- and bottom-line result. American Eagle Outfitters and L Brands also were standouts, she said, but noted that sales likely came at the expense of margins due to higher promotions.
So far, Victoria’s Secret, American Eagle, Forever 21, Zara and Macy’s seemed to have the most consumers carrying bags throughout the malls, she noted. “Strong promos — 30 percent off the store — likely drove sales at Zara, as well as compelling deals at Forever 21,” including 50 percent off select items, Anderson said.
She said American Eagle promoted 40 percent off, while Victoria’s Secret’s promotions included 50 percent off bras, sport pants and bralettes. Ann Taylor, Loft and Justice had some promotions that were 50 percent off, while Express had 50 percent off the entire store. Anderson noted that warmer weather again on the East Coast likely hurt outerwear sales.
Neiman Marcus, which has been challenged by poor traffic and sales trends, seemed to heighten its promotional posture. While the luxury chain has been more holiday gift oriented in recent years it historically has not been as dependent on holiday shopping as more mainstream department and specialty stores.
But this season Neiman’s advertised $50 off $200 regular-price purchases, savings up to 60 percent off select previously reduced contemporary, better apparel and intimate apparel sale items, and a designer sale on Black Friday, with savings up to 40 percent off regular prices on select categories and merchandise. For Nov. 26, Neiman’s has savings up to 50 percent off select previously reduced contemporary, better and intimate apparel.