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(Bloomberg) — From toy stores to electronics outlets, it’s the moment retailers have been preparing for all year. And so far, it’s off with a bang.
As Black Friday kicks off the traditional holiday shopping season, there’s a lot on the line. For a department store like Macy’s Inc. or Kohl’s Corp., a third or more of annual revenue is captured in the fourth quarter.
Early November results bode well: Comparable-store retail sales gained 1.3% in the first two weeks of the month, according to Fiserv (NASDAQ:), a major U.S. processor of credit-card transactions. Cooler weather likely spurred apparel growth for warmer, seasonal clothing, particularly at teen and family retailers, said Bloomberg Intelligence analyst Poonam Goyal.
Now the big money comes out. After weeks of slow and steady buying, consumers could come out in droves this weekend — giving investors a sneak peek at the likely winners and losers of the holiday shopping season. Here’s a look at the latest information available, with all time stamps reflecting the U.S. East Coast:
Salesforce Sees $7.4 Billion of Black Friday Online Sales (10:15 a.m.)
Salesforce.com (NYSE:), 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 (NASDAQ:) being the Nintendo Switch, iPhone 11, iPad, Kindle and Samsung (KS:) 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 (NYSE:) 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 (NASDAQ:) 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 (NASDAQ:), 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 (NASDAQ:)., 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 (NYSE:). 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 (NYSE:) 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 (NASDAQ:) (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. (NYSE:) 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 Goyal said.
Craig Johnson, president of Customer Growth Partners LLC, 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 (NASDAQ:). 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 (NYSE:)., 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.
