Black Weekend Breakdown: What's Happening This Holiday

12/4/2013
The year's biggest shopping weekend has come and gone, and as the dust settles, some retail trends are emerging. Foot traffic at brick-and-mortar stores dropped a bit while sales inched higher, and consumers are showing their enthusiasm for turning to smartphones and tablets not only to research products and conduct other shopping activities but also to truly seal the deal.

THANKSGIVING
Though this year brought a fresh wave of consumer protest over stores opening on a day dedicated to food and family (and football), many of the retailers that did open their doors saw plenty of shoppers looking to spend — and save.

Nearly half of shoppers reported that "getting ahead of the deals" influenced them to weave shopping into their traditional Thanksgiving festivities and traditions, according to research from Alliance Data. And although some retailers chose to be open all day, 36 percent of surveyed shoppers didn't venture out until after dessert, 5 p.m. or later, that is. Thanksgiving Day shoppers seem to be highly goal-oriented (and likely deal-oriented), as 96 percent of consumers who responded to Alliance Data's survey reported that they made a purchase during their shopping excursion that day.

In between feasting and football, shoppers turned to their smartphones to surf their favorite mobile-optimized retail sites and snap up deals. Branding Brand's Mobile Commerce Index revealed that 7.2 million smartphones users (? of which were iOS users) logged onto e-commerce sites and racked up more than 46 million page views and almost 118,000 orders. Smartphones drove nearly 33 percent of Thanksgiving's total web traffic, perhaps due to so many Americans being in transit and away from their larger computing devices. Average order value from the devices totaled $92.55.

From visits (69 percent) to page views (103 percent), every metric came in higher than the same day in 2012, according to Branding Brand. AOV also climbed 16 percent while mobile sales skyrocketed 258 percent.

BLACK FRIDAY
On Black Friday, consumers again turned to the mobile web in significant numbers. More than 9 million visitors (up 75 percent year-over-year) logged nearly 61 million page views (up 88 percent), placed more than 174,000 orders averaging $93.20 (up 22 percent), according to Branding to Brand, with smartphones driving 34.36 percent of the day's total e-commerce traffic. Mobile sales came in 187 percent higher year-over-year. "Mobile is quickly becoming a larger piece of the pie," note Chris Mason, co-founder and CEO of Branding Brand.

Crunching the numbers, IBM found that total Black Friday e-commerce sales rose 9.8 percent compared to the same period in 2012, with mobile accounting for more than 38 percent of total web traffic (up 40 percent year-over-year) and 21 percent of sales. Tablet users were ready to spend on Black Friday, driving close to 13 percent of total web browsing traffic and 13.5 percent of all web sales, with an AOV of $134.48. Shoppers on iOS devices (17.4 percent) represented four times the sales volume of Android users (3.7 percent), outspending their Google operating system counterparts $128.80 to $107.75 on average. 

Even as Pinterest remains wildly popular, its value in contributing to the bottom line still lags Facebook when it comes to the power of social media. Although shoppers referred from Facebook averaged $73.88 per order, versus Pinterest referrals, which drove $94.06 per order, Facebook referrals converted sales at nearly three times that of Pinterest referrals, perhaps indicating stronger confidence in network recommendations, according to IBM.

CYBER MONDAY
Cyber Monday shoppers spent $1.735 billion on retail purchases conducted via their desktop computers, according to comScore, up 18 percent year-over-year, making it the single biggest online spending day to date — along with Black Friday's $1.198 billion, the second day this holiday season to ring up more than $1 billion in sales.

"Any notion that Cyber Monday is declining in importance appears to be completely unfounded as its strong year-over-year growth rate of 18 percent resulted in yet another record for online spending in a single day," noted comScore chairman Gian Fulgoni.

IBM puts the Cyber Monday year-over-year spending increase at just shy of 21 percent, and shoppers tapping away at their mobile devices accounted for more than 17 of all of the day's sales. According to IBM Smarter Commerce strategy director Jay Henderson, "The mobile device has become the shopping companion of choice for consumers, driving record mobile sales with 55 percent growth over last year."

Mobile traffic grew to 31.7 percent of all online traffic, a 45 percent increase over 2012, according to IBM. While shoppers still prefer the smartphone (19.7 percent) over the tablet (11.5 percent) when it comes to browsing retail sites, the reverse is true when it comes down to making the purchase. IBM's research found that tablets drove 11.7 percent of total online sales, more than double the 5.5 percent of sales from smartphones. Shoppers on tablets also outspent smartphone-equipped consumers, $126.30 vs. $106.49.

Mobile shoppers showed differing behavior according to the operating system of their device, IBM found. iOS users spent $120.29 per order on average, compared to $106.70 per order for Android users, while Apple devices accounted for 22.4 percent of all online traffic and 14.5 percent of total web sales. Android trailed with just 2.6 percent sales and 9.1 percent of traffic.

Branding Brand's Mobile Commerce Index for Cyber Monday pointed to a 150 percent year-over-year increase in retail sales on websites optimized for use on smartphones. More than 8 million shoppers racked up an average order value of $82.16 (down 4.4 percent from 2012) and accounted for 29.31 percent of all e-commerce traffic.

However, site visits jumped more than 78 percent and page views rose by nearly 104 percent. Factors such as free shipping, on top of aggressive discounts and promotions, can drag down the final basket price, according to Branding Brand's Mason.

Given this year's abbreviated holiday shopping period — six fewer days than in 2012 — offline retailers  have been heavy-handed in rolling out a seemingly endless string of tantalizing deals and offers since Halloween. The logic, of course, is that the earlier a shopper's dollar is captured, the better. E-tailers followed suit over Black Weekend, giving consumers a head start on Cyber Monday's web-busting deals.

And if it weren't for several e-commerce players starting their Cyber Monday promotions early over Saturday and Sunday, it's possible that the year's biggest online shopping day could have had an even greater impact, Fulgoni observed.

Notably, abandoned cart syndrome dropped off significantly as online shoppers chased a parade of promotions, many of which were available for a limited time. Aiming to secure the best deals, consumers completed purchases of items added to their online shopping carts at a 12.6 higher rate on Cyber Monday than Black Friday, according to IBM.

Consumers continue to throw caution to the wind and shop Cyber Monday deals at their place of employment, with close to half of dollars spent on U.S. websites originating from work computers (49.2 percent), up 2.1 percentage points from last year. Not surprising, shoppers in heavily populated urban areas dominated Cyber Monday sales, with New York City nabbing the top spot, followed by Washington D.C., Los Angeles, Chicago and Atlanta.

Online apparel sales on Cyber Monday increased by 22.5 percent over 2012, and mobile sales jumped more than 58, IBM found, though average order value declined 6.9 percent to $102.83.

BLACK WEEKEND
Monitoring foot traffic over the course of Black Weekend, ShopperTrak observed that "Black Friday shopping is no longer a one-day event," with shoppers shelling out a bit more during the weekend shopping period than they did in 2012.

When compared to Black Weekend 2012, brick-and-mortar retail sales increased 1.0 percent and shoppers spent roughly $22.2 billion over those critical four days. This, despite traffic dipping by 4.0 percent, to about 1.8 billion store visits, ShopperTrak reported. The good news, though, is that traffic to apparel stores jumped 9.4 percent.

Across the country, traffic was down or flat in all regions. Sales decreased in the Northeast and Midwest but increased in the West (by 5.5 percent) and in the South.

"Retailers stretched Black Friday deals and promotions across November – removing the focus from just one big day of shopping," said Bill Martin, ShopperTrak founder. "Shoppers, in turn, paced themselves. They spread their shopping and spending not just across the holiday weekend, but also into the days and weeks before it, contributing to a decrease in last weekend's shopper traffic. Customers also researched store merchandise online first and more often came to stores ready to buy particular products."

In the promotion-heavy period, retailers jumped at the chance to send deals and offers to  consumers' mobile devices, with IBM reporting that companies transmitted 77 percent more push notifications (compared to the daily average over the preceding two months) during the five days including Thanksgiving through Cyber Monday. In turn, shoppers showed increased interest in using retail apps to aid in their decision-making, with average daily app installations jumping 29 percent according to the same metric.

Although AOV on Facebook on Black Friday was lower than that on Pinterest, the numbers evened out over the multi-day shopping period. On average, holiday shoppers referred from Facebook spent 6 percent more per order than shoppers referred from Pinterest.  Facebook average order value was $97.81 versus Pinterest average order value which was $92.40.  Facebook referrals continued to convert sales at a higher rate (38 percent) than Pinterest, noted IBM.

Global ratings agency Fitch Ratings believes factors such as the payroll tax increase and the shift in consumer demand toward bigger ticket items, such as electronics and appliances, could continue to pressure general merchandise and apparel throughout the holiday season.

Consumers spent an average of $407.02 from Thanksgiving through Black Sunday, down from $423.55 during the same period last year, according to NRF's survey.

HOLIDAY MARKETING
Although most retailers will leverage social media this season as some part of their holiday marketing playbook, 88 percent indicate that social platforms will comprise just an average of 14 percent of their total marketing budget, up from 10 percent in 2012. Clearly, many retailers are unsure of how to achieve the optimal mix of digital marketing strategies, despite how mainstream social media and e-commerce have become.

"Retailers know they must embrace multiple channels to stay competitive this holiday season," noted Natalie Kotlyar, partner in the Retail and Consumer Products practice at consulting firm BDO. "But the truth is, many brands are playing catch up with the digital movement. Consumers have come to expect social engagement; mobile is now the challenging frontier for many brands seeking to test the waters more before making a major investment during such a critical season."

In an interesting twist, just 38 percent of retailers are including mobile in their marketing strategy this year, a steep drop from 50 percent in 2012, but those who are embracing the channel are ramping up their efforts, according to BDO.

While Facebook (99 percent) and Twitter (52 percent) remain the two most popular social media marketing platforms, marketing execs are also increasingly turning to Pinterest (27 percent) and YouTube (24 percent) to engage and entertain customers while driving traffic to their website.

BDO observed that Target, for instance, debuted its "My Kind of Holiday" campaign this year, which uses holiday catalog Pinterest boards to demonstrate how consumers can use products in creative ways through the holiday season. What's more, 16 percent of retailers, including apparel brands such as Gap and Patagonia, are exploring Instagram as a marketing platform this year.

According to BDO, daily deals appear to be losing favor as a way to attract eyeballs; just one quarter of retailers plans to offer flash sales during the holidays, down from 42 percent in 2012. Last year flash sales were the leading mobile promotion strategy for 30 percent of retailers, down to just 5 percent this season. Overall, retailers seem to be prioritizing text message campaigns (33 percent) and mobile coupons (28 percent), indicating a shift in mobile strategy.

Retailers are trying to capitalize on the fact that 98 percent of text messages are opened and viewed, according to research from SinglePoint.
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