Key Takeaways From This Year’s Thanksgiving Shopping Bonanza
Mobile shopping is taking over holiday shopping, yet stores are still drawing in shoppers. Smart home devices under $40 shine, and more.
As reliable as roasted turkeys and awkward dinner conversations, this past Thanksgiving weekend also brought once again the myriad of deals and promotions that kick annual holiday shopping into high gear. U.S. retailers have had a rather tough year. With an all-time record number of stores closing and headlines warning of a “retail apocalypse” frequenting the frontpage, they needed this five-day shopping festivity to help boost the end-of-year revenue reports.
Technological advances may come in leaps and bounds, but the resulting consumer behavior shift does not occur overnight. Rather, the small, incremental increases in user adoption eventually lead to a substantial change in user expectations and behaviors, transforming the market landscape. This is happening to a number of industries such as auto (electric & connected vehicles) and restaurants (mobile ordering & healthy eating), and the same principle applies to retail as well. This Black Friday/Cyber Monday may look a lot like last year by and large, but looking closer, we can uncover some trends that are subtly shaping the retail industry.
Black Friday Still Draws Shoppers To Stores
Some 174 million Americans went shopping over the long weekend, starting from Thanksgiving and extending to Cyber Monday, according to a survey published on Tuesday by the National Retail Federation and Prosper Insights & Analytics. 64% of consumers said they planned to head to stores over the weekend, according to a Deloitte survey conducted last week. Data from ShopperTrak shows that traffic at brick-and-mortar stores decreased less than 1% from Black Friday last year, which comes as a relief to many retailers as they feared it would be much worse.
The reality remains that Black Friday shopping is a longstanding Thanksgiving tradition that still drives many customers to stores. But the subtler, incremental change here is that the peak of physical store visits is starting to shift. Data from Skyhook Wireless shows an uptick in shopper traffic across all the retailers that Skyhook tracked around 4 pm on Thanksgiving day, a departure from how people used to line up outside stores early on Friday morning for a chance to fight over the so-called “doorbuster” deals.
Many physical retailers are starting their sales early in response to the earlier starting date from their online competitors and shoppers are starting to take notice. Black Friday will likely remain the anchor of the extended shopping weekend extravaganza, but the sales are starting to spread out across the weekend. This means that retailers will have to adopt new windowing and planning strategies in order to maximize their foot traffic.
Mobile Rules Online Holiday Shopping
Mobile has been ascending as a key segment of holiday shopping for a few years now. This Black Friday marked a record-breaking day for ecommerce in the U.S., with Adobe estimating that shoppers spent $5.03 billion online on Black Friday after spending a record $2.87 billion online on Thanksgiving day. Purchases made on mobile devices totaled a record 36.9% of all sales, equaling about $2 billion in sales, as well as 54.3% of all site visits. Mobile also dominated over desktop for the first time for Shopify merchants, according to the company. As for Cyber Monday, online sales brought in a total of $6.59 billion, while sales on mobile broke a new record by reaching $2 billion. Amazon also reports that orders from its mobile app on Cyber Monday 2017 had increased over 50% worldwide year over year.
Some analysts attribute the growing prominence of mobile shopping to the ease of using retailer apps and mobile wallet services, while others point to a generational shift driven by millennial shoppers. While they are certainly contributing factors, both theories miss out on the larger trend that is the rise of mobile-first and even mobile-only consumers. For many, smartphones have become their primary devices for accessing the internet. According to eMarketer, over 40 million US internet users go online exclusively via mobile device in 2017. That number is set to reach 52.3 million by 2021, as people continue to shift to mobile devices for internet access. Therefore, it is imperative that retailers develop a user-friendly mobile app with mobile wallet integration to facilitate mobile purchases.
Friction Points Persist For Physical Retailers
Besides dealing with the rise of mobile commerce, this extended shopping weekend also exposed some new issues that brick-and-mortar retailers are facing this year. First of all, there is still the long checkout lines, which persist as a major pain point for holiday shoppers. Macy’s suffered an extreme version of this problem, as the national department store chain suffered from “system issues” on Friday that caused problems processing credit cards and gift cards in stores around the country. Many shoppers took to social media to voice their frustrations, which created a negative social buzz that likely dissuaded some shoppers from visiting Macy’s.
On the other side of the same friction coin, brick-and-mortar retailers are also struggling to deal with the long lines for picking up online purchases. To solve this issue, some brands such as Levi’s and Macy’s offered additional rewards and perks to incentivize customers to choose for slower shipping for Cyber Monday shoppers to deal with the high volume.
Ultimately, these issues stern from the omnichannel experiments, such as the popular “buy online, pickup in store” programs, that retailers have been running to combat ecommerce competitors. More and more shoppers are taking a hybrid, omnichannel way of shopping. 73% of U.S. shoppers used multiple channels during their shopping journey in 2016, according to Harvard Business Review. A recent study by Zebra Technologies found that 53% of millennial consumers say they are “better connected” and able to find information more quickly than retail associates, proving that retailers still have a ways to go in terms of perfecting their omnichannel services to better cater to the shifting shopper habits.
Budget Gadgets Flying Off The Shelf
While the three takeaways laid above are all continuing trends that have been in development for the past few years now, this shopping season also marks a breakthrough season for budget tech gadgets. This includes the lower-end smart speakers such as the Google Home Mini and Amazon Echo Dot, but also discounted Fire TV streaming sticks (with Alexa enabled) or Roku Express, all of which are selling at less than $30, making them the perfect impulse purchase.
In particular, smart speakers dominated much of the holiday shopping guide that many publishers put out leading up to the weekend. For example, Tom’s Guide plugged for Google Home Mini on Cyber Monday, which included a dig at Echo dot’s design, while Slash Gear plugged the Black Friday deal for the Echo Dot but also mentioned the discount for Google Home. Meanwhile, Amazon gave the Echo products and Kindles a prime retail space with pop-up stands in select Whole Foods stores leading up to Thanksgiving. The Echo Dot, specifically, was declared the best seller on Amazon during its Cyber Monday sales. A recent survey from Parks Associates found that 46% of millennial consumers indicate “high intentions” to buy at least one smart home and consumer electronic device.
As those affordable tech gadgets flooding the market during this shopping bonanza, they will introduce more U.S. households to the wonders of smart speakers, OTT streaming services, and other connected home devices. The heavily discounted budget models will also act as the perfect gateway drug to lure the formerly skeptical consumers into trying out the new gadgets and perhaps upgrading to the flagship products down the line. The industry has long speculated that Amazon and Google are selling Echo Dot and Home Mini at a loss to help cultivate the smart speaker user base and establish itself as the dominant voice platform at home. This holiday push continues to fuel the proliferation of voice-enabled smart devices at home, which means brand marketers really need to get their voice strategies ready.
