Online Sales Bright Spot in Lackluster Black Friday

It’s rare that one day of shopping has the ability to impact Wall Street but financial forecasters are focused on this year’s Black Friday’s numbers as a gauge of how close to recovery our economy really is.  That $10.66 billion dollars in estimated retail sales only represents a scant 0.5% growth is a worrying sign.  Thankfully, online sales are the highlight.

According to Reuters and ShopperTrak, this year’s Black Friday sales underperformed.  Comparatively, in 2008, sales increased 3% year-over-year during a holiday season at the apex of one of the worst financial climates in US history. This makes this year’s 0.5 % growth year-over-year worrisome.

Consumers said they were planning to spend nearly 8% less on average, or about $343 per person, over the Thanksgiving Weekend, according to the National Retail Federation (NRF).

Surprisingly department stores trumped discount retailers with 49.4% of shoppers visiting at least one. Discount retailers reached 43.2% of holiday shoppers with outlet stores grabbing 7.8%.

“In an economy like this one, every retailer wants to be a discounter,” said Tracy Mullin, NRF President and CEO. “Department stores have done an admirable job touting both low prices and good quality, which are important requirements for holiday shoppers on a budget.”

Online fared much better with a healthy $595 million dollars in estimated retail sales, according to comScore, which represents an 11 % increase year over year.

2009 Holiday Season To Date vs. Corresponding Days* in 2008
Non-Travel (Retail) Spending
Excludes Auctions and Large Corporate Purchases
Total U.S. – Home/Work/University Locations
Source: comScore, Inc.

*Based on corresponding shopping days (November 2-28, 2008).

Millions ($)
2008 2009 Percent Change
November 1 – 27 $10,254 $10.570 3%
Thanksgiving Day (Nov. 26) $288 $318 10%
Black Friday (Nov. 27) $534 $595 11%

According to the NRF, over one-fourth of Americans shopping during the Thanksgiving Weekend (28.5%) were shopping online. There was little surprise in the online leaders with Amazon, Wal-Mart, Apple, Target, and Best Buy representing the top 5 most visited retail sites.

“Black Friday, better known as a shopping bonanza in brick-and-mortar retail stores, is increasingly becoming one of the landmark days in the online holiday shopping world,” said comScore chairman, Gian Fulgoni. “The $595 million in online spending this Black Friday represents the second heaviest online spending day of the season-to-date and a double-digit increase from last year.”

The relative strength of online sales supports data from Compete which forecasts a 14% increase in consumers who will  spend at least some of their holiday budget online this year. At the start of the year advertising and sales online were down overall. The success of online sales  indicates that advertisers who invested their budget online and drove the growth in online advertising during Q3 of 2009, as reported by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers, certainly got their money’s worth.

For online retailers the big question is whether tomorrow’s Cyber Monday totals will be equally positive. For traditional retailers the question is whether shoppers, burdened in an economy with an unemployment rate above 10%, will continue to spend throughout the holiday season.

About Angel Djambazov

Born in Bulgaria, Angel Djambazov has spent his professional career in the fields of journalism and online marketing. In his journalistic career he worked as an editor on several newspapers and was the founding Editor-in-Chief of Wyoming Homes and Living Magazine. Later his career path led to online marketing where while working at OnlineShoes he earned the Affiliate Manager of the Year (2006) award at the Affiliate Summit, and In-house Manager of the Year (2006) award by ABestWeb.

For four years Angel served as OPM for Jones Soda for which he won his second Affiliate Manger of the Year (2009) award at Affiliate Summit.

Currently Angel serves as OPM for KEEN Footwear and MedicalRecords.com. His former clients include: Dell, Real Networks, Jones Soda, Intelius, Graphicly, Chrome Bags, Onlineshoes.com, Vitamin Angels, The Safecig, and Bag Borrow or Steal.

Angel is the Editor-in-Chief and Co-Publisher for ReveNews.com and ReveNews.org.

Angel lives north of Seattle, spending his free time reading up on obscure scientific references made by his wife MGX, while keeping up with a horde of cats and a library of books.

You can find Angel on Twitter @djambazov.

One Response to Online Sales Bright Spot in Lackluster Black Friday

  1. Joey says:

    Black Friday is alive for brick and mortor retailers as well, but most of the shoppers have tight watch on their wallets. Walmart is a big winner on Black Friday sells. Other retailers find that shoppers mostly bought the deep discounted items but not much else. The big question is, do retailers actually make any profits on the black Friday sales?