What to Expect From Black Friday Through the Holiday Selling Season

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What to Expect From Black Friday Through the Holiday Selling Season

By Jamie Grill-Goodman - 11/20/2020

Black Friday is on its way, the official kickoff to the holiday shopping season. Normally. But 2020 hasn’t been a normal year by any stretch of the imagination, and many holiday shoppers started buying earlier this year. So will the Black Friday to Christmas Eve stretch be boom or bust?

U.S. retail sales inched up just 0.3% in October, according to seasonally adjusted data from the Commerce Department, marking the smallest increase since the pandemic recovery began in May. However, sales were still 5.7% higher than the prior-year period, and the numbers indicate it will be a reasonable holiday for retail, Neil Saunders, GlobalData managing director, retail, told RIS, though he tempered this by noting there are early signs consumers are losing momentum.

“Unless there is another round of stimulus, this suggests that holiday spending will fall a long way short of being a boom,” he said. 

IBM’s latest holiday forecast is projecting a 1.8% increase in Nov-Dec retail sales vs. 2019. 

“The 2020 holiday season is a real challenge–no one really knows what holiday shopping will be like as there’s no real comparable situation and the macro-economic conditions are very fluid,says Karl Haller, partner, Consumer Center of Competency Leader at IBM.

We expect sales trends to continue to be heavily weighted towards essential retailers (home improvement, grocery, and mass discounters, and e-commerce), which were able to remain open and operating during the COVID lockdowns and which, for many consumers, have become the habitual first-choice shopping destinations.”

Not shockingly, across the board e-commerce is predicted to rise, but capturing consumers’ digital attention is a big task.

“Unfortunately, because of the pandemic, many consumers have indicated that they're not necessarily looking forward to the holiday season as much because of either they're grieving the loss of a loved one or they're social distancing, so they're not getting together with others, not going to holiday parties,” Dora Bock, associate professor of marketing in Auburn University’s Harbert College of Business, tells RIS.  “There's a lot of uncertainty in a lot of people who have lost jobs and are still recovering financially from some of the hurdles they've had to face this year. Overall, it's going to be very different just because there's going to be a clear push for online, but also there's a lot of different emotions that consumers are currently experiencing now very different to what they have experienced in the past.”

Consumers are being more cautious when it comes to spending their discretionary incomes, says Shikha Jain, a partner in the global Consumer Goods & Retail practice at Simon-Kucher in Boston, U.S. “Interestingly, despite their cautiousness, we’re also seeing that consumers are less likely to pre-plan their Black Friday and Cyber Monday purchases, and are more likely to browse and make spontaneous purchases – this reveals a major opportunity for retailers to sharpen their promotions and maximize cross-sell opportunities as consumers will be browsing across multiple categories.”

“This year, it will be critical for retailers to pull consumers to their online shops through any available online marketing channels and offer them a unique shopping experience online, such as concept corners or live events with influencers, to boost cross-selling and up-selling opportunities,” says Nina Scharwenka, a partner in the global Consumer Goods & Retail practice at Simon-Kucher in Munich, Germany.  

“With many consumers doing far less aisle-wandering and having fewer touch-and-feel experiences this year, retailers that best simulate these environments online will be able to capture those unexpected purchases, Periscope by McKinsey says in its “2020 Holiday Season: Navigating Shopper Behaviors in the Pandemic” report. “Expect retailers to increase the number of product photos, easy-to-compare features, user reviews, and generous return policies to improve browsing confidence. Retailers who perform well this season are also likely to personalize the browsing experience, merging data on customer characteristics and preferences with information on trending holiday products to optimize the assortment of products each digital shopper sees.”

Retailers are certainly tasked with a complicated consumer mindset this year, but preparedness and last minute agility will likely be a winning combo. As the industry enters the throes of the holiday season, RIS reviews the latest expert forecasts and findings.

"Despite their cautiousness, we’re also seeing that consumers are less likely to pre-plan their Black Friday and Cyber Monday purchases, and are more likely to browse and make spontaneous purchases." -Simon-Kucher

Statistics to know for Black Friday & the 2020 Holiday Season

U.S. online holiday sales will grow by an average of 24.4% over 2020 to reach $173 billion, Forrester predicts. The online sales share of holiday spend will increase this year and will account for 25% of total holiday sales, up from 20% in 2019. -Forrester, “US Online Holiday Sales Will Reach Historic Levels Despite Uncertainty From COVID-19”

Twenty percent of shoppers will start their holiday shopping on Black Friday, 6% Thanksgiving Day, 9% on Cyber Monday, and 17% in December before Christmas Eve. -Akamai Mid-Pulse Shopping Behavior Holiday Survey

Globally, the average budget for shopping during Black Friday and Cyber Monday is between $230 and $300. In the U.S., the average budget for 2020 Black Friday and Cyber Monday shopping is $236, down from $267 in 2019. -Simon-Kucher & Partners, “The Global Black Friday Forecast”

Americans (79%) expect there to be better and bigger sales this Black Friday. In order to get the best deals, people are split: 38% plan to visit a store or shopping center, while 36% plan to purchase an item online and get it delivered. -Toluna survey

Nearly half of American respondents (45%) said they will avoid visiting physical stores because of concerns about COVID-19; American men aged 35-44 were found to be the most likely to avoid stores due to fears of the Coronavirus. -Contentsquare survey

November social chatter around Black Friday has seen a 24% YoY increase, with mentions spiking following the announcement of the election results to reach an average of nearly 50,000 mentions on social per day in the first half of the month. Conversely, Cyber Monday has seen a 31% decrease in mentions compared to 2019, likely due to the majority of shopping being done online this year regardless of the retail holiday. -Data from social media analytics company Sprout Social

Thirty-nine percent of customers said they don’t see digital media as a viable alternative to the in-store Black Friday experience. Thirty-five percent claim the fun is an important
part of their Black Friday shopping. -Aki's Holiday Insights Report

More than 60% of consumers plan to shop online, a huge upswing as e-commerce accounted for only 20% of holiday sales in 2019. Much of this growth is driven by Baby Boomers, who plan to buy online 116% more than they did last year. -IBM, “Home for the Holidays”

Seventy-three percent of consumers have done half to all of their shopping online to date and 85% confirm they will finish the rest of their holiday shopping online. Nearly 1 in 5 (19%) shoppers have abandoned a purchase because a website page was broken or loading too slowly. -Akamai Mid-Pulse Shopping Behavior Holiday Survey

The fear of low stock has caused many Americans to start their shopping early - 56% report fears about being able to get the gifts they want. As a result, 59% have already begun their shopping or plan to this month. -Toluna survey

Since October, there have been more than 21K mentions of shipping delays in relation to the holidays on Twitter, amounting to over 253 million potential impressions. Of those mentions, nearly half (46%) had a negative sentiment. In the month of November alone, there have been an average of 530 messages per day on Twitter related to shipping delays. - Sprout Social data

Consumers expect to spend 20% less on dining out and 11% less on local outings this holiday season, they will spend more on toys and games (+9%), electronic goods (+13%), digital/streaming services (+39%), and furniture (+33%). -IBM, “Home for the Holidays”

Top ten trending product categories that saw growth compared to the last 30 days (November 1-14), according to Shopify data:

 

  1. Puppets & marionettes (+363%)
  2. Security safes (+363%) 
  3. Duvet covers (+251%)
  4. Measuring cups & spoons (+287%)
  5. Cufflinks (+236%)
  6. Wallpaper (+188%)
  7. Holiday ornaments (+134%) 
  8. Poker chips & sets (+180%)
  9. Toners & astringents (+134%)
  10. Cookie cutters (+109%)
Factors that influence Americans' shopping behavior, according to a report by iAdvize & YouGov:

 

  • Opinions from other customers (69%)
  • Website recommendations (31%)
  • Talking to a real human via only chat (27%)
  • Specialist online forums (19%)
  • A customer service phone line (15%)
  • Expert recommendations (15%)
  • Chatbots (11%)