U.S. Shopper Visits to Stores Drop by Half: Black Friday Update

(Bloomberg) -- With sparse crowds and none of the stampedes of holidays past, some retail watchers started to refer to Black Friday as Blasé Friday -- and that was even before the virus hit.

The sluggish in-person traffic reported in 2019 is expected to thin out further this year, as mall-wary shoppers move on from traditional midnight doorbusters to digital deals. But it’s still shaping up to be a record year for total holiday retail sales -- and the logistics companies that’ll deliver them.

Here’s a look at the latest information available on Black Friday weekend spending in the U.S., with all time stamps reflecting the U.S. East Coast:

Shopper Visits to Stores Dropped by Half on Black Friday (1:35 p.m.)

Consumer visits to physical stores in the U.S. declined by 52% on Black Friday compared to a year ago due to Covid-19 and social distancing requirements, according to preliminary data from Sensormatic Solutions.

On Thanksgiving Day, foot traffic to stores plunged by 95% from a year ago. Many well-known retailers chose to close and deals are being spread throughout the season, said Brian Field, Sensormatic’s senior director of global retail consulting.

He expects some of the in-store traffic to build as Super Saturday -- Dec. 19 -- approaches, when consumers make “last-minute purchases.”

Cyber Monday Sales Set to Grow as much as 35%: Adobe (11:10 a.m.)

Adobe Analytics expects Cyber Monday this year to become the largest online sales day in U.S. history, with spending between $10.8 billion and $12.7 billion, representing a 15% to 35% growth from a year ago.

States that restricted family gatherings have seen higher growth in online shopping compared with states with less restrictions, it said.

Adobe said U.S. consumer spending rose 21.6% to $9 billion on Black Friday this year, a lower number than Salesforce’s estimate of $12.8 billion.

Stay-at-Home Shoppers Drive Record Online Sales (8:50 a.m.)

After slow growth in digital sales on Thursday, the Thanksgiving holiday, U.S. retailers pulled in a record $12.8 billion in online revenue on Black Friday, putting questions about consumer strength at ease, according to Salesforce. That represents 23% growth over last year.

Globally, online revenue reached $62.2 billion, up 30% from a year ago. The most mentioned products on social media include Hulu’s subscription offer, the Apple iPhone 12, and Sony’s PlayStation 5, Salesforce said.

Facing an influx of online orders, retailers are sourcing delivery services through companies like Uber, Lyft, Postmates to help expand their shipping capacity, said Rob Garf, Salesforce’s vice president of strategy and insights.

Shopify Data Shows Consumer Support of Small Businesses (8:33 a.m. Sunday)

The movement to support small businesses gained traction during the pandemic. Shopify reported record Black Friday sales of $2.4 billion globally from independent and direct-to-consumer brands.

Businesses that sell through its platform saw a 75% increase in sales compared with Black Friday a year ago. The vast majority of Shopify’s customers are businesses with 500 or fewer employees.

“We anticipate this weekend being one of the biggest e-commerce events in history,” said president Harley Finkelstein, “as consumers vote with their wallets and support the independent and direct-to-consumer businesses they love.”

Top categories globally were apparel and accessories, health and beauty, and home and garden, Shopify said in a statement.

Black Friday Set to Reach Online Sales Record (9:30 p.m.)

While some stores reported light traffic, it was a robust Black Friday on the web. An online sales record is expected with as much as $9.6 billion, according to Adobe Analytics, which tracked a trillion visits to U.S. retail sites and other data points.

Smartphones made up 42% of purchases by Friday afternoon, a 7% increase from a year earlier. Retailers with more than $1 billion in revenue had a 52% jump in online sales on Thanksgiving compared with smaller companies, though the gap is expected to narrow “significantly,” it said.

“Black Friday is headed for record-breaking levels,” said Taylor Schreiner, director of Adobe Digital Insights. “We’re seeing strong online sales momentum across not only the major shopping days like Thanksgiving weekend, but throughout the holiday season.”

Looking ahead, Cyber Monday will post the largest online sales, with as much as $13 billion of spending anticipated, it added.

Black Friday Portends Retail’s Future (4:30 p.m.)

A shift to more e-commerce was already happening, but the pandemic dramatically accelerated the timeline. From curbside pick-up to video chats with stylists, Black Friday this year was much more digital than analysts would have predicted a year ago.

At Target, shoppers have bought millions more items using same-day services like drive up and delivery with Shipt than at this time last year, a spokesman said late afternoon on Black Friday. Some of the most popular deals fulfilled with same-day options were for Apple AirPods and the Nintendo Switch New Super Mario game. Instant Pots, toasters, family games and apparel were also big draws, Target said.

The changing landscape also gave retailers the opportunity this year to yank the pivotal holiday season forward -- a long-predicted “Christmas creep.”

“Black Friday became Black November; now it’s Black October and Black November,” said Doug Stephens, founder of consulting firm Retail Prophet. “Soon, we’ll be looking at a Black Quarter.”

Malls Forced to Try New Things Amid Pandemic (3:24 p.m.)

Malls are approaching the holiday season much differently this year. But the retailers, small businesses and restaurants at shopping centers owned by CBL & Associates Properties Inc. are making it work, according to CEO Stephen Lebovitz.

At one of his malls in Kentucky, where indoor dining is restricted, a health-inspector approved tent was set up in the parking lot. Santa sits behind plexiglass and of course there’s no sitting on his lap.

“Even though the crowds aren’t what they’re going to be in a 2019 Black Friday, they’re still strong crowds and we’ve seen strong traffic across the board,” he said in an interview. Shoppers who do venture to the mall have a higher conversion rate; they’re often leaving stores with bags in their hands.

And he is betting the Santa of past Black Fridays will return, including with photo ops for pets.

“This year we haven’t been able to bring our pets to get their picture taken with Santa. That was very popular,” Lebovitz said. “I guarantee you that that will be something that will come back.”

CBL owns 68 malls and open-air retail centers.

Black Friday Isn’t a Social Event This Year (2:15 p.m.)

Remember gathering in crowds to shop just for fun? Last Black Friday was certainly a different world.

“In years past, I feel like Black Friday seemed like a time where people kind of hung out and got together and sort of had a little bit of a reunion,” said Jenna Lynn Pogorzelski, a retail leader at Deloitte. This year, not so much. The food courts at the King of Prussia Mall in Pennsylvania were almost completely empty, she said, and shoppers “went into the stores they wanted to and did some browsing and then they got out pretty quickly.”

Bobby Stephens, a leader in Deloitte Digital’s retail and consumer products practice, witnessed a similar trend. Most of the in-person shopping is “with a purpose, to make a purchase specifically,” he said. “It’s not your typical browsing, get a group of people together, have brunch, walk around for several hours.”

The Crowds Will Return Next Year (1:40 p.m.)

Americans have gotten used to delivery, but don’t count out Black Friday 2021 just yet.

“I expect doorbusters to return next year,” said Poonam Goyal, a Bloomberg Intelligence analyst. With the virus hopefully gone and capacity limits no longer an issue, retailers will try to make the shopping day feel festive again. “Retailers will aim to strike a better balance with online and stores as they move forward.”

England’s Shopping Day Nears End With Light Sales (12:40 p.m.)

Black Friday in the U.K. was subdued as expected. Barclaycard Payments, which says it processes nearly one out of every three pounds spent there, says the volume of payments was down 16.7% at 4 p.m. local time compared to Black Friday last year.

“The real focus now will be on Wednesday -- the end of the national lockdown in England -- when we predict that shoppers heading back to the high street will bring about a ‘Black Wednesday,’ with transactions likely surpassing what we’ve seen today,” said Rob Cameron, CEO of Barclaycard Payments.

Stretchy Pants, Work-From-Home Items Big Sellers (12:30 p.m.)

Americans have been buying elastic-waisted pants and mood-lifting throw pillows all pandemic long, so why stop now?

At Scottsdale Fashion Square in Arizona, lines had formed outside stretch-pants purveyor Lululemon Athletica Inc. as well as Bath & Body Works -- whose hand sanitizers, candles and soaps have made it a coronavirus winner.

“Anything that’s to do with nesting and the home seems to be doing well, which is what we’ve seen during the pandemic as a whole, so it’s just a continuation of that trend,” said Neil Saunders, managing director of Global Data Retail, who visited the mall around 11 a.m. local time. “Things like fashion stores, some of the luxury stores, there are people in them, but it’s a lot more subdued. Department stores are pretty quiet as well.”

Electronics to support an extended work-from-home set-up, like external keyboards and mouse devises, are also poised for a big day, said Joseph Feldman, senior managing director and assistant director of research at Telsey Advisory Group. Shoppers are looking for “things to make their living environment a little more fun and a better experience for them,” he said on Bloomberg TV.

Shipping Times Holding Up Amid High Demand (12:21 p.m.)

Data from Convey, a supply-chain data analytics firm, shows that the U.S. is so far avoiding a “Shipageddon.” November delays and delivery times are fairly steady from October -- or even a bit improved, “perhaps reflecting additional capacity added by carriers during the peak holiday season,” Baird analyst Colin Sebastian said in a note to clients, citing the Convey data.

Nonetheless, delays and bottlenecks are expected to increase in coming weeks as Black Friday tests logistics companies’ capacity.

Baird said that a slower-than-expected shopping day on Thanksgiving may be a blip as Black Friday sales appear strong.

Video Calls Give Wary Shoppers a New Option (12:10 p.m.)

A socially distanced Black Friday means some stores are turning to unusual strategies to make a sale. Chico’s, for instance, is using video calls.

Store employees are reaching out to clients virtually and through the apparel seller’s digital tools like Style Connect to show them new shoes and jackets, according to Chico’s FAS Inc. CEO Molly Langenstein. In one instance it resulted in a $2,000 sale.

“It’s another way of reaching out to customers, especially for the Black Friday weekend and going for customers who aren’t comfortable to go into a store,” Langenstein said in an interview.

This weekend customers are booking private appointments with employees and coming in before or after store hours as a way to avoid crowds.

Crowds Are Light at Largest U.S. Department Store (11:18 a.m.)

It looked more like a normal day than the busiest shopping event of the year at Macy’s Herald Square, the biggest department store in the U.S. In a typical year, crowds stream in through the flagship’s main entrance as TV cameras document the frenzy. In 2020, it’s barely a trickle.

The 2.5 million-square-foot Manhattan store is one of the worst performers in Macy’s network, with few of the international tourists and office workers it relies upon for sales. Still, Macy’s dressed up the windows to welcome those venturing out for deals on shoes and handbags. CEO Jeff Gennette even planned to be on hand to rally his staff. “I’ll be looking for happy colleagues and engaged customers,” Gennette said last week in an interview.

Macy’s and its department store rivals are hoping for a strong holiday after a dismal year. With weak foot traffic at urban locations, they’ll need robust e-commerce sales to carry them through the final quarter of the year. Department stores typically get about a quarter of their annual sales in November and December.

Gap Reports ‘Accelerated Volumes and Transactions’ (10:41 a.m.)

For Gap Inc., which also owns Old Navy and Athleta, anticipating the needs of the customer is especially challenging this year, according to John Strain, Gap’s chief digital and technology officer.

“It is a hard season to predict,” Strain said in an interview. He added that the company has been seeing “strong growth” along with “accelerated volumes and transactions,” referring specifically to its third quarter that just ended.

Thanksgiving Spending Lower Than Expected (10:19 a.m.)

Thanksgiving Day online spending came in nearly $1 billion lower than predicted in the U.S., signaling consumers didn’t wait until this week to start shopping and retailers’ efforts to spread gift buying actually worked.

Digital spending on Thursday totaled $5.1 billion, according to Adobe Analytics. While that’s a record for the day and a 21.5% boost year on year, it’s still well below the $6 billion figure the company had been predicting just one day ago.

“While yesterday was a record-breaking Thanksgiving Day with over $5 billion spent online, it didn’t come with the kind of aggressive growth rate we’ve seen with the start of the pandemic,” Taylor Schreiner, director at Adobe Digital Insights, said in an email, noting that many customers are also still waiting for Cyber Monday to pull the trigger on big-ticket items.

Retailer Stocks Rally on Big Digital Spending Day (9:41 a.m.)

U.S. retailers with a strong online presence rose in Friday morning trading.

Etsy Inc., the marketplace for handmade crafts and vintage items, was the biggest gainer on the S&P 500 index as of 9:41 a.m., climbing as much as 6%. Online home-goods seller Wayfair Inc. rose as much as 3.7%, while GameStop Corp. -- a seller of the season’s popular video game consoles -- was up as much as 9.8%.

Europe’s Black Friday Isn’t What It Used to Be (9:15 a.m.)

Black Friday across Europe has been a complicated affair this year. With full and partial lockdowns still underway in many European countries, including England, many shops are not open. That means most Black Friday promotions are online only, presenting a logistical challenge for many retailers who have to simultaneously cope with increased online traffic while preparing to reopen stores in December post-lockdowns.

Many of Europe’s retailers have offered promotions throughout all of November rather than on Black Friday itself in a bid to spread out the demand. Others, including Marks & Spencer Group Plc and Next Plc, are not participating in Black Friday this year at all, arguing they offer good value all year round.

Barclaycard Payments, which says it processes nearly one out of every three pounds spent in the U.K., says the volume of payments there was down 13.2% as of 9 a.m. local time on Black Friday.

In France, Black Friday has taken on a political tone with small shopkeepers complaining that government-mandated store closures are gifting market share to Amazon.com Inc. The fallout has resulted in Amazon and some of France’s biggest retailers agreeing to delay Black Friday until all stores, including small operators, have reopened next month.

Good Luck Finding a PlayStation (8:45 a.m.)

Gaming consoles are the hot-ticket item today. After retailers saw online releases sell out within minutes in recent days, it seems that camping might be the only way to get your hands on one now -- for retail prices, at least. From Norfolk, Virginia, to Denver and Salinas, California, shoppers lined up as soon as Thursday afternoon at GameStop locations -- some set up tents -- to get their hands on the coveted Playstation 5 and Xbox consoles.

“There’s always an item, or a few items, people can’t find. The big hot item this year is Sony PlayStation 5 and Xbox from Microsoft,” Joseph Feldman, senior managing director and assistant director of research at Telsey, said in a Friday morning interview on Bloomberg Surveillance. “Those are the two new items that I keep hearing people ask for, especially at Best Buy and GameStop, and you just can’t find them right now.” To limit crowds, Best Buy chose to only release the newest consoles online.

Google searches for gaming products were up again this week, according to a note from Baird Equity Research. Interest for “World of Warcraft” was up 96% after the launch of its latest expansion pack, while “FIFA Ultimate Team” was up 43% this week. The term “gaming headset” also saw a consistent increase in internet searches, up 24% week over week.

With all the interest in gaming, the new consoles are sure to draw crowds wherever they release. But there’s one reliable way to get your hands on them without lining up -- pay resale. The consoles, which retail around $400 to $500 apiece, are selling for more than $1,000 on eBay.

Black Friday Started Weeks, If Not Months, Ago (12:01 a.m.)

Let’s be honest: Black Friday hasn’t been a single day in a long time. For years now, retailers have been rolling out deals earlier and earlier, and this year was no exception. Many companies started their holiday promotions online in October.

That has pulled forward some sales that would normally be made this weekend. Adobe Analytics, which tracks online spending in the U.S., had said Thursday morning that online sales on Thanksgiving Day would hit an all-time high of $6 billion. But the Thanksgiving Day pace hasn’t been as brisk as it thought, and revised its outlook in the evening to less than $6 billion.

“Retailers of all sizes appear to have successfully moved shoppers to buy earlier in the season with early discounts and effective promotions,” it said in an email, noting that Thanksgiving Day sales were still expected to increase as the night progressed.

Americans who aren’t visiting family also seem to be shopping more. According to Adobe, online sales growth was 47% higher in states where gatherings of people from outside immediate households are prohibited.

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