Shoppers curb Black Friday spending
Holiday shoppers spent less money over the Black Friday weekend than in 2015, another sign that U.S. consumers remain wary about opening their wallets without deep discounts.
Shoppers spent an average of $289.19 over the four-day weekend, including both online and offline purchases, the National Retail Federation said on Sunday, citing a survey conducted by Prosper Insights & Analytics. Consumers shelled out $299.60 in 2015, the trade group found.
The weekend was characterized by heavy markdowns and a shift toward e-commerce, meaning there were smaller crowds at the mall. Forty-four percent of consumers did their shopping online, compared with 40 percent at brick-and-mortar stores. In either case, many of them were looking for just one thing: a good deal.
“Over one-third of shoppers said 100 percent of their purchases were on sale,” said Matthew Shay, who is the chief executive of NRF. That increased more than threefold from last year.
Though the total number of Black Friday weekend shoppers grew 2 percent to 154 million, their refusal to spend as much could renew concerns about the sluggish retail economy. Companies have been trying to bounce back from a polarizing election season that they said prevented consumers from making purchases. They were hoping a strong start to the holiday shopping season would set a more optimistic tone for the industry.
But retailers also are grappling with a longer-term shift toward more thriftiness — aided by technology.
“There’s a confluence of events here,” Shay said. “Since the recession, we’ve had much more cost-conscious consumers. In the last six to seven years, people have been much more deliberate about the purchases they’ve made. And that coincided with the ability to access information in a very transparent way because of the existence of smartphones and technology-enabled pricing.”
Moreover, e-commerce has reduced the need to buy gifts on Black Friday weekend itself. Online sellers are doing more promotions either before or after the four-day stretch. For instance, eBay Inc., urged Thanksgiving travelers to buy things on their phones while in transit, dubbing the event “Mobile Wednesday.”
Black Friday weekend is followed by Cyber Monday, a push for e-commerce shoppers. More than 122 million consumers plan to take part, up from 121 million last year, the NRF said.
Brick-and-mortar chains have become more aggressive in chasing online customers. Wal-Mart Stores Inc. kicked off its “Cyber Week” promotions on Friday, and Target Corp. is offering 15 percent off all purchases — either in stores or online — Sunday and Monday.
The discounts squeeze profit margins, but there’s often no alternative, Shay said. And in many cases, retailers have been carefully planning for the markdowns as a means as of keeping their inventory low, he said. That lessens the amount they have to spend hanging on to excess stock.
“In a perfect world, everyone would sell everything at full price,” Shay said. “But as consumers, and as buyers, all of us would like to get a deal on things we’d like to buy.”
Some consumers also are waiting longer to do their holiday shopping, which puts pressure on retailers to keep up the promotions. Almost a quarter of consumers surveyed by Prosper Insights hadn’t purchased anything on their holiday lists yet, a higher percentage than last year.
“December might even be a little more important this year than last year,” said Pam Goodfellow, the principal analyst for Prosper Insights & Analytics.