Walmart, Target Outdraw Department Stores: Black Friday Update

(Bloomberg) -- From toy stores to electronics outlets, it’s the moment retailers have been preparing for all year: Black Friday. And it could be one for the record books -- at least, if you’re selling online..Here’s a look at the latest information available, with all time stamps reflecting the U.S. East Coast:.Foot Traffic Is Weaker at Department Stores But Strong in Walmart (2:55 p.m.).Shoppers were spending in droves at Walmart, Costco and Target, according to Craig Johnson, president of retail research firm Customer Growth Partners. Department stores, which have had a tough run this year, found less relief from the Black Friday rush..“These are not new trends that suddenly showed up on the day before Black Friday,” Johnson said in an interview from Providence, Rhode Island. “These are trends that have been building for some time and sometimes the trends become more apparent and more painful in some cases on the big shopping weekends like this. That’s the way of the world. Retail has always been an industry of winners and losers and also-rans,” he said..U.S. shoppers are expected to spend around $32 billion on Black Friday, according to Johnson. Of that, $7 billion to $8 billion will probably come from online sales, meaning around 75% of transactions will come from physical locations..More Spending Moves Online But Shoppers Love the Easy Parking (2:00 p.m.).The numbers are trickling in, and it should come as no surprise: Digital spending this Black Friday is hot. Adobe Analytics reported the day’s online spending in the U.S. is already up about 19% year on year, with digital spending still on track to reach $7.4 billion during the single day..That may be why foot traffic in some malls is quieter than normal this year. “A lot of the deals will be the same online as in the store” so fewer people come out just to browse, said Bloomberg Intelligence analyst Jennifer Bartashus..See Also: Black Friday’s Not What It Used to Be.That rang true at New Jersey’s Monmouth Mall and nearby big-box stores, where the early morning shoppers and cashiers said the crowds would come later, while those shopping around lunch all assumed they’d already missed the crowds..At the Eatontown Best Buy, the parking lot immediately in front of the store was nearly full at about 11 a.m. -- but there were plenty of open spaces in the rest of the strip mall, which also includes a TJ Maxx and a P.C. Richard & Son..Joe Rizzo, 36, an account manager at a software company, said he came to Best Buy looking for camera memory cards in advance of a Mexican vacation. He found them at a great price: while they’d normally be $48 each, he was buying three at $15 a pop. He doesn’t plan on going to other Black Friday sales but will check out Amazon..Matthew Shay, president and chief executive officer of the National Retail Federation, said he wasn’t concerned that more spending could be moving online -- especially since the average U.S. household is expected to spend nearly $50 more this year -- either on or offline..“Nine of the 10 largest online shopping platforms are operated by retailers that have bricks and mortar locations, so what you’re seeing is people are trading back and forth between in store and online. It’s not an ‘either-or proposition.’ It’s much more of an ‘and,’” he said. “We should be hearing after the holidays a lot of success stories.”.Sabrina Fowler from Asbury Park, New Jersey, and Myra Carter from Neptune, both 53, didn’t mind the more peaceful-than-expected shopping day. They hit the Black Friday sales every year, they said, and while today was “a little calm” at Monmouth Mall, they did well. They came for household goods, taking home a $179 set of sheets for only $29. In fact, they’d be returning for Round Two at Victoria’s Secret, Hollister and NY & Co. later today..Shoppers Head to Fifth Avenue for Luxury Goods (12:53 p.m.).On Fifth Avenue, it has been a rough year with the loss of department stores Henri Bendel and Lord & Taylor. This season, the luxury district filled several empty storefronts with holiday windows to spruce things up, while the surviving mainstays are spending billions to renovate their space and keep shoppers coming in the doors..For Saks Fifth Avenue, this is the first holiday season after revamping its crucial bottom floors as it nears completion of a $250 million facelift. Passers-by took selfies with Disney characters in the windows on Friday morning. The beauty area, which broke with department-store tradition by moving off the ground level and getting rid of the old cosmetics counters, was especially busy..Business was brisk at Bergdorf Goodman, which finished a major round of renovations a few years ago. While some shelves are tagged as 40% off, most of the merchandise appears to be full price..Jeweler Tiffany & Co., which is being acquired by European luxury conglomerate LVMH, saw its revolving doors spinning constantly as police with rifles watch the crowds from the neighboring Trump Tower. The location is about to embark on a three-year, $250 million renovation of its most important shop..It’s business as usual for the shops on nearby Billionaire’s Row, where high-end boutiques like Louis Vuitton, Fendi, Dior, Miu Miu and Burberry reside. Some will stay open for an extra hour or two, but there are no doorbusters to be found here..New Toys “R” Us Lures Customers Nostalgic For Geoffrey (12:00 p.m.).Geoffrey the Giraffe is back. Shoppers were lining up to take selfies with the Toys “R” Us mascot at the toy retailer’s freshly opened store in the Garden State Plaza mall in Paramus, New Jersey..The first Toys “R” Us since the company liquidated all its locations after bankruptcy was in full swing and crowded on Friday, with customers perusing its kid-height shelves as children clambered up and down its wooden in-store tree house. The influx of shoppers is a positive sign for the company, especially since the brand’s new owners are planning to open 10 locations by the end of next year..Edison Bastidas, a 35 year-old shop-owner from Hawthorne, is happy the store is open again for his daughters to enjoy, but he’d rather be at home..“I’ve been coming here the last 10 years,” he said. “The only reason I still come to the mall is for my wife and kids. They like being able to touch and feel stuff in stores.”.Like many who’ve been lured away from brick and mortar stores to e-commerce, Bastidas is more of an online shopper these days. He shops at Amazon every other day. He also doesn’t think Black Friday is nearly as big as it used to be..“Ten years ago, after Thanksgiving we’d go straight to the mall to be there before Black Friday. Now I go to sleep, wake up early and check to see when the mall opens,” he said..KeyBanc Store Checks Find Muted Malls Amid Online Shift (11:00 a.m.).KeyBanc Capital Markets found traffic “somewhat muted at the mall” during its annual Thanksgiving and Black Friday store checks. Analysts including Edward Yruma attributed this to more promotions shifting online. A majority of stores were offering 50% discounts, including Gap, Banana Republic, Express and Zara, KeyBanc said in a report to clients..At the same time, traffic was strong at Walmart, Target and Lululemon -- “and we think these retailers continue to take share.”.Salesforce Sees $7.4 Billion of Black Friday Online Sales (10:15 a.m.).Salesforce.com, a digital services provider, projected e-commerce spending reaching $7.4 billion in the U.S. on Black Friday -- 16% higher than a year earlier..Gadgets were getting the most attention, according to Salesforce, with the most talked-about products on social media sites like Twitter and Facebook being the Nintendo Switch, iPhone 11, iPad, Kindle and Samsung Galaxy S10. The complex nature of gadgets lends themselves to online discussion, since shoppers take to social media to research and ask questions about them..“It speaks to the fact that we’re amidst this digital transformation that’s happening for both the consumers and the retailers,” Rob Garf, vice president of industry strategy and insights at Salesforce, said in an interview..Amazon, Walmart and Best Buy were the most mentioned retailers, according to Salesforce data. Many traditional brick-and-mortar retailers have flagged that the shorter holiday season, with Thanksgiving at the very end of November this year, could impact shopper behavior -- but there is some upside for some companies with this condensed calendar..Garf predicted the “big winners” of the holiday season will be the retailers that offer in-store pickup for online orders. The right use of this option “extends the holiday shopping window by nearly a week,” he said..Companies including Walmart and Target have invested heavily to improve their capabilities in this area in recent years..Millennial, Gen Z Shoppers Head to the Malls Early (9:30 a.m.).Young Americans may have a reputation for being glued to their phones, but they were the ones swarming stores -- in person -- when the doors opened this morning at King of Prussia mall near Philadelphia. At the shopping center, which houses more than 400 stores, Gen Z and young millennial shoppers started gathering at a Starbucks at 5:30 a.m. to plot their mall paths before many of the stores opened half an hour later, according to Bill Park, a partner at Deloitte on the ground doing store checks..Park said chains that catered to the younger generations were packed from the start, with some teen and college-aged shoppers even running through the doors in homage to the crazy Black Friday days of a decade prior. Teen-focused stores like Urban Outfitters, Lululemon and American Eagle pulsed with energy, and a line of young men wrapped outside Champs Sports as buyers tried to get their hands on Kanye West’s newest Yeezy kicks..The same dynamic wasn’t palpable at anchor stores including Nordstrom, Neiman Marcus, Lord & Taylor and Macy’s, Park said. “I would say that demographic tends to be a bit older. I’m not seeing the foot traffic in those stores as heavy as some of the specialty retailers that cater to the younger folks,” he said..Not all malls saw the same activity. At Monmouth Mall in Eatontown, New Jersey, the parking lot was more than half empty as of 9:30 a.m., even though it also opened at 6 a.m..Online Surge Brings in Dollars But Also Stresses Systems (8:00 a.m.).Digital shoppers hoping retailers learned their lessons after last year and beefed up their online systems to avoid another holiday of glitches and crashes may find themselves sorely disappointed in the days ahead..Costco Wholesale Corp., which saw its website crash on Thursday, announced on Friday said it was extending all of its Thanksgiving Day-only promotions for an extra day to make up for the error. Shoppers had taken to Twitter to complain about the Costco outage, plus similar delays on other retailers’ sites, including Nordstrom Rack. The discount arm of Nordstrom Inc. said on Thanksgiving that it was working to fix the issue..Representatives at Issaquah, Washington-based Costco and Seattle-based Nordstrom couldn’t be reached for comment early on Black Friday. As of 8 a.m. in New York, Costco’s website warned that it was still experiencing longer than normal response times..At Swedish Malls, DJ Creates Calming Playlists (6:15 a.m.).In Sweden, retailers concerned about shoppers’ stress levels while hunting for Black Friday deals have turned to a disc jockey to help compile calming music to play in stores. Auntie Flo, whose real name is Brian d’Souza, has worked with Unibail-Rodamco-Westfield, one of the world’s largest shopping mall developers, to provide playlists for all Westfield shopping centers across Sweden. Last year he also curated Black Friday playlists for Selfridges, the U.K. department store..D’Souza, who hails from Glasgow, Scotland, focuses on using a form of sound therapy called binaural beats, where different pure-tone sounds are combined to create a relaxing, calming effect. That may not be the best strategy on Black Friday, according to Phil Dorrell from the consultancy group Retail Remedy..“Retailers want shoppers to celebrate, think of the good times coming with Christmas and get in the party mood,” Dorrell said. “It’s not about trying to calm them down.”.Target Staff Get Fired Up With Karaoke (4:30 a.m.).At the Target store in Elmhurst, New York, manager Kelly McGarrity and her employees belted out karaoke to get fired up before the doors opened at 5 p.m. Thanksgiving Day. Crowds were on par with past years, she said, and early-bird shoppers snapped up deals on 65-inch 4K televisions, pressure cookers and merchandise from Walt Disney Co.’s Frozen movie sequel..Buying online and picking up in the store was a popular option as well, and 106 staffers were on hand to pack and prep online orders, up from 70 last year. Those waiting in line for their web orders grabbed inexpensive impulse items as well, McGarrity said. Christmas trees were a hot item online, with orders for more than 100 coming in on Thursday alone..“Seasonal items did very well,” she said..Shopping Takes More Time From Feasting: Adobe (4 a.m.).Sales on Thanksgiving itself are on the rise in the U.S., according to Adobe Analytics, which forecast 2019 as the first year that online sales surpass $4 billion on the holiday. A larger portion of these transactions are being made on smartphones, Adobe said in a report on U.S. e-commerce activity..Consumer online spending is projected at $57.5 billion so far in the season -- or 16% higher than a year earlier. Adobe sees e-commerce sales reaching $7.5 billion on Black Friday and $9.4 billion on Cyber Monday -- both about 20% higher than in 2018. The company will provide ongoing analysis of spending through the holiday weekend..“It’s clear that shoppers are devoting more time to shopping on Thanksgiving than ever,” said Vivek Pandya, lead digital analyst at Adobe. She said sales would surge in the afternoon and evening as consumers “step away from their dinner tables and divert more attention to shopping for the best deals.”.Consumers Ready to Go Shopping (12:01 a.m.).A survey from Deloitte shows that 79% of U.S. respondents plan to go shopping over the five-day holiday weekend, which is higher than last year. The estimated spending of $415 per household is similar to last year’s pre-holiday estimate..The trend of brick-and-mortar losing ground to e-commerce is also expected to continue, with participants planning about 53% of their spending via online sources and 43% in stores..A majority of those surveyed -- 64% -- plan to shop at mass merchants like Target Corp. and Walmart Inc., while 54% plan to shop at online retailers. Some 32% plan to go to traditional department stores..A separate study from the National Retail Federation puts expected outlays for the entire season at almost $1,050 per consumer..Short Season Isn’t Stopping Spenders (12:01 a.m.).Black Friday is always a critical day for retailers, but the stakes may feel even higher this year, and the calendar is to blame. With Thanksgiving falling on its latest possible date, there are only 26 shopping days between your turkey dinner and Christmas -- compared to 32 last year. That has some companies in a panic, and it means physical stores could feel more crowded than normal in the coming weeks as buyers try to cram all their shopping into a shorter window..Still, the six “lost days” this season shouldn’t hit overall spending. Promotions began way back in October for some retailers, and shoppers are going to buy the same number of presents for the people on their list regardless of when Thanksgiving falls. “There’s a number of gifts you’re going to buy, and you’re going to buy them,” Bloomberg Intelligence’s Poonam Goyal said..Johnson, president of Customer Growth Partners, agreed that the briefer window shouldn’t alter the total dollars spent. “Statistically, the holiday shopping season is November and December, and unless I’m mistaken, that means it’s 61 days every year,” he said in the weeks leading up to the event. So when retailers bemoan a shortened holiday, “they’re using it as an excuse.”.Walmart, Amazon Are Early Winners, Study Shows (12:01 a.m.).The biggest players are going into the holiday period with momentum, early data indicate. Walmart and Amazon.com Inc. saw the biggest jumps in online consumer spending in the run-up to Thanksgiving compared with a year earlier, according to a report from Edison Trends, an e-commerce research company..Walmart saw a 53% in increase in web spending, while Amazon had a 37% increase and Nordstrom Inc. climbed 35%, according to the study. Best Buy Co., Target, Etsy Inc. and Macy’s also registered higher spending. On the other end of the spectrum, Kohl’s, EBay Inc. and J.C. Penney Co. all registered negative numbers from a year earlier..Edison Trends based its analysis on more than 700,000 transactions..--With assistance from Lisa Wolfson, Boris Korby, Matthew Boyle, Deirdre Hipwell, Deena Shanker, Anne Pollak, Cécile Daurat, Kim Bhasin and Leslie Patton..To contact the reporters on this story: Jordyn Holman in New York at jholman19@bloomberg.net;Deena Shanker in New York at dshanker@bloomberg.net.To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Jonathan Roeder.©2019 Bloomberg L.P.

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Walmart, Target Outdraw Department Stores: Black Friday Update

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