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Tags: online shopping | retail | holiday | economy

Online Sales Surge Ahead of Retailers' Holiday Deals Bonanza

Online Sales Surge Ahead of Retailers' Holiday Deals Bonanza

Friday, 27 November 2015 10:48 AM EST

U.S. e-commerce sales surged on Thanksgiving, raising questions about how many shoppers will show up for brick-and-mortar retailers’ promotions on Black Friday, the traditional kickoff to the holiday season.

By 5 p.m. in New York on Thursday, $1.1 billion was spent online, according to Adobe Systems Inc. The full day was expected to total $1.7 billion, a 22 percent jump from the same period a year ago, the company said. Toy demand, especially for Star Wars products, helped drive the increase.

The online rush comes as Wal-Mart Stores Inc., Macy’s Inc. and other chains roll out their Black Friday specials, aiming to get more shoppers into stores. About 135.8 million Americans are expected to shop in stores or online over the four-day weekend, according to the National Retail Federation, the largest U.S. retail trade organization. The amount they’ve spent has declined over the past two years, dropping 11 percent to $50.9 billion in 2014.

Retail observers say they’re seeing early signs that the online deals rush is curtailing visits to physical locations. Jeff Simpson, a director at Deloitte Consulting LLP’s retail practice, surveyed shopping centers in North Carolina and saw smaller crowds than expected for Black Friday.

‘Much Slower’

“Across the board, much less traffic than was anticipated,” he said. “Much, much slower.”

Though consumers are benefiting from lower fuel prices and unemployment rates, retailers have their challenges. Mall traffic is in the midst of a long-term slowdown, and shoppers are spending more on experiences and less on stuff. More recently, a warm autumn has curtailed sales of seasonal merchandise, leaving stores with excess inventory. All those factors point to a need for heavy discounting — good for consumers, but not so great for retailers’ profits.

Consumer Spending

And while the NRF’s traffic forecast represents a 1.6 percent increase from last year, there’s a risk that fewer shoppers than expected may show up. Last year, the NRF had forecast 140.1 million consumers would hit stores and e-commerce sites, 4.8 percent more than actually turned out, according to its post-weekend shopping survey.

Some stores pulled back on their Thanksgiving weekend hours this year and elected to spread more of their specials throughout the month. But the weekend after Thanksgiving is still one of the busiest for U.S. retailers, who use the period to highlight their offerings. Mass retailers like Target Corp. and Wal-Mart say they are still expecting record turnouts.

“This is the big event,” said Cindy Hudson, Target’s senior vice president of store operations. “We have a large team dedicated all year to helping pull off Black Friday.”

Command Center

As stores opened across the country starting Thanksgiving evening, a Target command center at its Minneapolis headquarters was getting live video feeds from all of its 1,800 locations. There are also four regional command centers monitoring specific activity in their markets.

Inside the command center, workers glued to computer monitors and screens on the wall can view the lines outside stores to make sure they are orderly, shoppers are happy and that customers are getting into the store at the right pace — not too fast, not too slow. Inside the stores, live feeds at checkout lines monitor for interruptions.

From the command center, employees can radio directly to stores and help them make real-time adjustments.

"Our first priority is the safety and security of our guests," Hudson said. "It can get crazy out there, and we want to provide a very safe and exciting experience for our guest."

‘Strong Turnout’

Target said Friday in a statement that it had a "strong turnout" in stores on Thanksgiving, without providing specific figures. Gaming consoles, televisions and movies were among the top-selling items. The company also said it sold an iPad every second throughout the day, on average.

For mass retailers like Target, execution during the the holidays is even more important because of increased competition from Amazon.com Inc. The e-commerce behemoth has been luring shoppers with its free, two-day shipping membership program and an increased focus on fashion that’s challenging even industry stalwarts like Macy’s.

Target has countered by providing free shipping and returns on its holiday orders, while Wal-Mart plans to offer more than four times as many discounts as last year on the Monday following the Thanksgiving weekend.

Once considered the official start to the holiday shopping season, Black Friday has seen its bargains get overshadowed by retailers rolling out specials earlier in November. Still, the NRF estimates that the weekend accounts for about 10 percent to 15 percent of total holiday sales.

“We expect a robust four days,” said Sarah Quinlan, head of market insights at MasterCard Advisors. “It still is a major kickoff period.”

© Copyright 2022 Bloomberg News. All rights reserved.

U.S. e-commerce sales surged on Thanksgiving, raising questions about how many shoppers will show up for brick-and-mortar retailers' promotions on Black Friday, the traditional kickoff to the holiday season.
online shopping, retail, holiday, economy
Friday, 27 November 2015 10:48 AM
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