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Spending Was Up On Black Friday As Stores Struggle To Balance E-Commerce Shift

The NRF found that 44 percent of Thanksgiving holiday shoppers went online while 40 percent shopped in-store.

Average spending per person over Thanksgiving weekend totaled $289.19, down slightly from $299.60 last year, the NRF’s preliminary survey of the holiday shopping season found.

But it was the ways in which consumers made those purchases is what will keep retailers guessing throughout this crucial period.

Where Did They Shop?

More than 154 million consumers will shop over Thanksgiving weekend, up from 151 million shoppers in 2015, according to the annual Thanksgiving weekend results survey released today by the NRF and Prosper Insights & Analytics. (Last week, the NRF’s estimates for the weekend appeared particularly optimistic, expecting that the amount of consumers pouring into stores during the long-weekend would rise 58.7 percent to 137.4 million.)

As for where shoppers found their weekend deals, the survey found that 44 percent went online and 40 percent shopped in-store.

The most popular day to shop online was Black Friday, up 1.3 percent from last year to 74 percent, followed by Saturday (49 percent), Thanksgiving (36 percent), and Sunday (34 percent). And, of those that shopped in store, 75 percent shopped on Black Friday, up 3.4 percent from last year, 40 percent on Saturday, 35 percent on Thanksgiving and 17 percent on Sunday.

“It was a strong weekend for retailers, but an even better weekend for consumers, who took advantage of some really incredible deals,” NRF President and CEO Matthew Shay said of the survey of 4,330 consumers. “In fact, over one third of shoppers said 100 percent of their purchases were on sale.”

Holiday Shoppers Just Getting Started

Looking at what the holiday shopping season kickoff means for the rest of the year, the NRF found that just nine percent of shoppers said they’re done with the period’s purchases — that’s down from 11 percent last year. Meanwhile, 23 percent have yet to make any dents to their lists, up from 19 percent last year.

In other words, retailers can expect greater activity still to come.

“With mid-season shopping behind us, it’s not too late for retailers to tweak their online and in-store strategies to help increase traffic and see a big payoff during the last few weeks of the holiday season,” Shay said in a statement.

The survey found that of those that shopped in store, 51 percent shopped at department stores, 34 percent at discount stores, 32 percent at electronics stores, 28 percent at clothing or accessories stores, and 25 percent at grocery/supermarket stores.

Some of the most popular gifts purchased over the weekend included clothing or clothing accessories (50 percent), toys (32 percent), electronics (30 percent), books, CDs, DVDs, videos or video games (28 percent), and gift cards (20 percent).

According to the survey, 56 percent of smartphone owners and 53 percent of tablet owners used their devices to assist with weekend shopping activities.

The Millennial Moment

Millennials are having a greater impact on shaping the holiday season, something WPP Group’s Mindshare noted in a study last week. For one thing, the way they look at deals between physical stores and online has forced retailers to refine their omnichannel strategies.

The NRF says that Millennials (specifically, those between 18 – 34) were the primary drivers behind Thanksgiving weekend shopping. Eight in 10 shopped over the weekend, of which 25-34-year olds shopped the most in store (56 percent) and online (62 percent).

“Millennials are keeping retailers on their toes when it comes to Thanksgiving weekend shopping not just for their friends and family, but also themselves,” Prosper’s Principal Analyst Pam Goodfellow said. “However, Millennials are not the only ones taking advantage of great promotions, today’s consumers, across ages, are savvy about when and where they shop.”

In its preview of how younger consumers were likely to shop this past weekend, Foursquare’s Sarah Spagnolo noted that “Black Friday shoppers are your typical Millennial, likely with disposable income and no children at home. And on Black Friday, this group also drives a surge of visits to coffee shops, fast-food joints, casual dining restaurants and liquor stores. Strategic advertisers know to target this Millennial audience before Black Friday and throughout the holiday shopping season, ensuring that their stores and restaurants see measurable lift instead of losing out to competitors.”

As retailers look ahead to the rest of the season, Spagnolo suggested that “advertising that targets people within close proximity of a store (or targets those who visit a competitor, or even all mall-goers) will drive visits when it counts.”

Cyber Monday And Omnichannel

As shoppers head back to work following the long weekend after Thanksgiving, deals are still on their collective minds.

About 122 million Americans plan to shop online on Cyber Monday, up from the 121 million who planned to participate last year, according to the NRF’s forecast.

More than 28 million people, or 23 percent of Cyber Monday shoppers, plan to shop for Cyber Monday deals from their mobile device this year, about even with last year’s 29.6 million. More than eight in 10— 98.6 million people, will use their computers at home to shop on Monday, while 11.2 million will shop from their computers at work.

Given those numbers, the ability to balance online and offline shopping really is a make or break issue for retailers. While any sale is a positive, the margins for online are typically smaller than for stores. Plus, the need for stores to bring in revenue to support the related costs of keeping the lights on and people employed will force brands to develop clearer omnichannel strategies.

Target is a case in point. In the days before Thanksgiving, the retail chain made several upgrades to its online purchase/in-store pick-up program that promises faster service at all its 1,800 U.S locations.

Beyond the balancing of a brand’s internal online and offline sales goals, brick-and-mortars still have to face the challenge of Amazon and other e-commerce sites. While the early holiday shopping season numbers seem positive — and to be sure, not all that different from last year — the store ideas that emerge by the end of 2016 will be played out even more starkly in 2017 and after.