Introducing Axsium’s retail strategist, Bliss Gordon. Bringing over fifteen years of retail operations and management experience to Axsium, Bliss is both a recognized industry strategist and workforce management consulting expert. We welcome Bliss to our blogging team and look forward to reading his posts on various retail workforce management issues.
I was very interested to see how Black Friday played out this year because U.S. Thanksgiving is the kick off to the North American holiday shopping season. Retailers across the country decided to open on Thanksgiving Day for the first time to entice holiday shoppers into making an additional trip to the mall over the holiday weekend. Also in the mix (and I’m sure a reason why bricks-and-mortar retailers decided to open early), is the exponential growth of the online channel as a valid options for avoiding malls altogether. Here are a couple of observations, in part based on my own experience as I braved the Toronto Eaton Centre this weekend in search of a deal.
ONLINE GOES BIG
Various sources reported a nearly 20 percent growth in online orders Thursday through Sunday. Five years ago, it was easy to dismiss big online gains because the overall value of the channel was so small compared to the core brick-and-mortar business. While it’s still not an even partnership in terms of overall revenue, online shopping is a significant part of the retail landscape and its putting up big growth numbers compared to the relatively flat trends seen in the traditional retail channel.
Online sales grew in every way. Additional traffic as well as significant growth in average transaction combined produced impressive online results. Tablets and smartphones also played a role as sales from devices rose 90 percent (tablets) and 66 percent (smartphones). Looks like retail investment in mobile apps and mobile-friendly sites is starting to pay dividends. I was personally impressed that retailers seemed to get their acts together around consistency between their channels. Rather than come up with separate offers for online and retail stores, many retailers made the same offer across both channels and freely supported the customer’s ability to choose between them.
On the surface, opening Thursday appears to have worked. Researchers estimate a little over $12 billion in sales can be attributed to Thursday and Friday. Having said that, it also appears the entire haul for the weekend will likely land around $57 billion or just shy of $2 billion below last year’s performance. In fact, customers polled by research had a more nuanced set of shopping motives than purely deal hunting. Customers demonstrated a desire to be in the malls for the experience. In many cases it became a family occasion, particularly on Thursday evening. Customers also demonstrated targeted focus and resolve. Not unlike myself this weekend customers were in search of a deal but also had a very specific set of criteria and would walk away from a deal if it didn’t meet it.
So what does this mean for retailers? It means two things:
First, for much of the year, retailers have been talking about the Omni Channel experience. As online continues to grow exponentially, retailers will need to hone their operations around channel integration. Buying online, shipping to store or vice versa, or the ability to create a mixed basket (some online purchases, some purchases in a physical store) will come under increased scrutiny by customers. Those who do it well will be rewarded with increased retail traffic, those who don’t won’t.
Second, experience is also a big part of Thanksgiving shopping. No, I’m not referring to the mob scene at the local Walmart. Malls are putting their best foot forward to offer an appealing shopping environment for the holiday shopper. As the online channel ticks off the easy checkmarks on the Christmas list (Children’s toys, electronics, video game consoles etc.), purchases made in store will in many cases not be purchased as a gift at all. The presentation and value add that a retail can provide within the store will make a difference to customers who may simply be shopping for themselves.
Other article links of interest: