David Keene– Remember when “Black Friday” was just an industry-insider term? (Ostensibly, the day that retailers finally got into the black after the winter-spring-summer months of expenditure-sucking outlays for largely empty stores.) Before it was not just the start of the holiday shopping season, but a “Friday” that is actually a 4-day micro-marketing event unparalleled by any other trade or consumer program. Of course this industry is focused not on retail numbers per se but on DOOH results. How does DOOH figure into the events of this past week, a week that is not so much the kick off of the holiday shopping season, but perhaps the start of what will shape as probably the most interesting year for our industry since the birth of DOOH a decade or so ago?
The raw numbers are amazing. According to the NRF, a record $52 billion spent this Black Friday– from Thanksgiving through Sunday– or $398.62 per shopper, a 9.1% increase from last year. The average holiday shopper spent $398.62 this past weekend, up from $365.34 last year. Conducted by BIGResearch, the study also found that online spending was significant, with shoppers shelling out an average of $150.53 on the Web, or 37.8% of their total weekend outlay.
Some analysts are worried about the shrinking margins inherent in the deep sales and discounting that were apparently necessary to get a lot of those bodies into the stores this past week. But I don’t think that’s a concern. We're not talking automobiles or big ticket items that have thinner margins. Clothing, and most electronics have high margin to begin with, so some margin erosion there is not the end of the world. It’s the web shopping component that caught my eye. After all, it does not help the DOOH industry (or many of our core industries in this country for that matter) when more shoppers sit at home in fuzzy slippers and shop online. My take: it’s not part of the normal tech-geek coverage you see in the trades, but one of the biggest issues out there is: many states are going to go after sales tax from Amazon, and other online vendors. California has already. Other states will follow. There is a lot of money at stake here. And it’s totally unsustainable that the likes of Amazon and other purely online retailers increasingly eat into local and national brick and mortar retailers’ market share while avoiding the payment of sales tax. This will shape up to be a hot political issue in the coming year– and its outcome will weigh much more heavily on the market than whether someone launches another content management software package or another line of media players or flat panels.
The DOOH market is, at the end of the day, about money. About margin. About tax regimes, and the shifting of economic trends as we head into a brave new world in the larger economy, not just our market niche. Great Black Friday numbers bode well for our industry– but there is a lot to be sorted out in terms of how the politics of a new shopper culture will play out this coming year.
Here is more on Black Friday numbers, from NewBay’s sister magazine TWICE: www.twice.com/article/477169-CE_Spurs_Record_Black_Friday_Sales.php
CE Spurs Record Black Friday Sales
By Alan Wolf -- TWICE, 11/28/2011
New York - Earlier store openings, a bargain-hungry consumer and the lure of deeply discounted TVs and laptops contributed to the largest Black Friday sales haul in history this past weekend.
- A Target CE department was bustling at 3 a.m. Black Friday morning.
- Americans spent a record $52 billion from Thanksgiving through Sunday, or $398.62 per shopper, a 9.1 percent increase from last year, the National Retail Federation (NRF) reported, while traffic to stores and websites rose 6.6 percent to hit an historic high of 226 million visits.
- Broken out by channel, 62.2 percent of the total weekend spend took place in brick-and-mortar stores and 37.8 percent was transacted online, the trade group said.
- Black Friday proper was also one for the record books. According to market research firm ShopperTrak, sales at brick-and-mortar stores rose 6.6 percent the day after Thanksgiving to $11.4 billion, while foot traffic increased a 5.1 percent from last year.
- But despite criticisms of holiday commercialism, many started their Black Friday shopping even sooner thanks to earlier store openings. Customers left their Thanksgiving tables for an 8 p.m. opening at Toys "R" Us, a 10 p.m. sale at Walmart, and midnight doorbusters at Best Buy and Target, among others. According to the NRF, nearly one-quarter of Black Friday shoppers had hit the bricks by midnight, compared with 9.5 percent in 2010 and 3.3 percent in 2009.
- "The appetite for these early openings is only getting stronger among holiday shoppers, and retailers did a great job providing Americans just what they wanted this weekend -- the ability to shop on Black Friday without having to get out of bed before dawn," observed Phil Rist, executive VP of NRF's research partner BIGresearch.
- E-tailers also enjoyed an exceptional turnout. According to market research firm ComScore, online sales rose 26 percent to $816 million on Black Friday, while Thanksgiving Day sales increased 18 percent to $479 million. Amazon.com was the traffic leader on Black Friday, with a 50 percent increase in visits year over year, followed by Walmart.com, BestBuy.com, Target.com and Apple.com.
- "Despite some analysts' predictions that the flurry of brick-and-mortar retailers opening their doors early for Black Friday would pull dollars from online retail, we still saw a banner day for e-commerce," said ComScore chairman Gian Fulgoni.
- What were consumers clamoring for? Lured by cheap TVs, notebooks and Blu-ray Disc players, nearly half of all shoppers bought technology products over the weekend, the Consumer Electronics Association (CEA) said, making it the second most sought-after category after clothing. "Mature product categories such as televisions, digital cameras and MP3 players fared well this weekend as unprecedented price points proved too tempting for shoppers to ignore," noted CEA chief economist and research director Shawn DuBravac.
- Indeed, 61 percent of shoppers polled in a CEA Black Friday survey described the deals and sales as good or excellent, more so in stores (60 percent) than online (35 percent). The data were mirrored in a Black Friday study by The NPD Group, which found that almost 65 percent of tech purchasers were driven into stores or online because "they saw what they really wanted on sale," industry analysis VP Stephen Baker wrote in an NPD blog. More than 23 percent of Black Friday shoppers purchased some type of electronics product, 15 percent more than last year and 50 percent above toys, which was the third most popular category, he reported.
- Within CE, TV saw a 30 percent increase in Black Friday purchases year over year to pass computers as the most popular electronics category excluding games, Baker said. The finding is supported by PriceGrabber, the comparison shopping site, which cited "55-inch LED TV" as the No. 1 search within tech, toys and clothing on Black Friday, followed by PlayStation3, Xbox 360, Eos Rebel T3i and iPod Touch fourth-generation 8GB.
- Besides intrepid shoppers, who were the big winners this holiday weekend? According to NPD's Baker, Best Buy was the fourth most frequently shopped retailer behind full-line merchants Walmart, Target and Amazon, which sell a much wider variety of products than the CE specialty chain. Best Buy also enjoyed the highest conversion rate, with more than 58 percent of shoppers actually making purchases, compared with just 38 percent last year, representing the largest gain among the four rivals.
- Credit Suisse retail analyst Gary Balter concurred with Baker's assessment based on Black Friday store visits in several markets across three states. "Best Buy seemed to be the relative winner as stores were at least as busy as last year and traffic was solid well past the initial doorbusters," he wrote in a research note. "Also, it seems like many others either did not open as early or focused a lot less on electronics than in previous years. For example, the office supply [chains] cut back significantly from last year and Sears opened much later and focused on appliances."
- Best Buy's seeming Black Friday success, which was critical following successive quarterly comp sale declines, was due in part "to locking in compelling exclusive deals, better than Amazon's, and having unique in-store- only offers forcing the visit," Balter said.
- Indeed, Anthony Bonevento, general manager of a 33,000-square-foot Best Buy store in Holmdel, N.J., reported a record turnout of 1,000 early-bird shoppers by midnight of Black Friday. Most queued up for hours, and in one case more than a day, for a chance to snag a 55-inch 1080p Samsung LED TV for $1,000; a 42-inch 1080p Sharp LCD TV for $200; a 15.6-inch dual-core Lenovo laptop for $180; a 24-inch, 1080p Dynex LCD TV for $80; and a Toshiba Internet-ready Blu-ray Disc player for $40.
- "It's hands-down bigger than last year," Bonevento told TWICE. "In fact, it's the biggest crowd in four years."
- Whether the momentum will carry into today's "Cyber Monday" promotions, and whether the CE industry can sustain it through Christmas, remains to be seen.