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A Glass 3.5 Percent Full? Black Friday Foot-traffic Declines Expected To Stabilize

Foursquare locates areas of 'softness and success' as the 2016 holiday shopping season kicks off next week.

While retail trade groups have been increasingly positive about the overall holiday shopping season this year, location intelligence platform Foursquare’s expectations for this year’s Black Friday appears somewhat mixed.

Depending on how you look at it, store visits on Black Friday, which falls on Nov. 25th this year, will still be down — but the declines will be smaller compared to past years, suggesting that the foot traffic at brick-and-mortar businesses on this all-important retail shopping day is stabilizing, says Foursquare CEO Jeff Glueck in a blog post.

Specifically, Foursquare estimates that foot traffic will be down about 3.5 percent compared to last year. This dip is far less severe than the year-over-year drop from 2014 to 2015.

“Of course, there are many other factors like online and in-store promotions, unseasonably warm weather and the election year that may impact performance, but we believe our analysis is a strong benchmark from which retailers should be making key holiday-season decisions,” Glueck says.

Mythbusted: Black Friday Isn’t As Big As You Think

In its analytical review of how Black Friday shopping has performed over the past few years, Foursquare made a surprising discovery: Black Friday may not actually be the biggest shopping day of the calendar.

“In 2015, Black Friday saw significant decrease in foot traffic compared to the year before; instead of wildly peaking on Black Friday, the shopping season is flattening out a bit, and other days later in the season like Super Saturday are rising in popularity,” Glueck says. “In 2014, Black Friday was the third most popular shopping day of the year. In 2015, it ranked fifth.”

Looking at Sept-to-Oct 2015’s year-over-year foot traffic patterns and what it means for 2016,  Foursquare is calling for a fairly close repeat of last year’s activity. Foursquare predicts that this will hold for Black Friday 2016, and that on whole, U.S. retailers should only expect a 3.5 percent drop in foot traffic from last year.

2016 Black Friday Winners & Losers

Big box and dollar stores represent a wide range of commerce types. But Foursquare finds one thread of commonality between the two: both will experience a rise in foot traffic.

Whether it’s in spite of or a result of the waves of large store closings and consolidations this past year, on Black Friday, Foursquare expects the big box  category to continue outpacing retail in general and to see an increase of over 5 percent year-over-year.

Although it didn’t list numbers for the discount stores, Foursquare has seen store visit momentum this past year and expects that trend to be felt the day after Thanksgiving. According to Foursquare, the Big Lots chain will see the largest spike in the big-box category on Black Friday 2016, and Dollar Tree will the leader for the discount category — with gains that will be even more pronounced closer to Christmas.

Among the trends that will become more pronounced on the losing side, department stores will continue to struggle to get shoppers to walk in.

“Looking at this year, we see that September through October foot traffic in department stores was down by 7 percent: double the drop of retail in general, but a less precipitous drop than we saw in this category in 2015,” Glueck says. “So while we predict that Black Friday 2016 will be less successful for department stores than for the rest of the retail industry, department stores will make significant gains later in the season and perhaps even pull ahead of 2015 foot traffic numbers.”

The department store brands predicted to lead the gains in visits include Marshalls, Dillard’s, and Macy’s. In addition, luxury department stores Lord & Taylor, Saks Fifth Avenue, and Neiman Marcus should also do better this Black Friday.

“All six of these brands have seen stronger foot traffic patterns than their competitors in the past two months and should anticipate strong year-over-year performance,” Glueck says.