The 2010 Holiday shopping season kicked off with nice increases in traffic and fuller parking lots, but malls and “brick ‘n mortar” stores took a backseat this year to the power of the Internet.
This year, savvy shoppers were hitting the stores using Smartphones and other mobile devices to check on the best available deals before pulling the trigger.
Based on a report from Coremetrics, a unit of IBM that tracks online traffic, Internet sales were up 12% on Black Friday this year, with average orders surging 12% to $190.80 from $170.19 in 2009. On the other hand, sales for brick ‘n mortar retail business were up just 0.3% to $10.7 billion for the day versus last year, according to a report released by ShopperTrak – a significant disappointment given that it fell short of the anemic 0.5% uptick last year.
The story this year, however, may be more about a continued shift in purchase habits rather than a weaker-than-expected start to the season. According to a survey conducted for the National Retail Federation over the weekend, the percentage of people who shopped online this weekend rose a healthy 15.2%, from 28.5% last year to 33.6% this year. A report from comScore indicated that online spending was up 9% to $648 million on Black Friday.
In addition to the shift to the Web as the channel of choice, there was also evidence that Saturday became more important to the overall weekend results this year. In contrast to the fairly flat percentage of shoppers who braved the highways and aisles to shop on Black Friday this year — with 65.8% of the survey respondents indicating they has shopped on Friday this year versus 65.6% last year — the percentage of consumers shopping on Saturday rose to 59.3% of the respondents this year compared to just 53.4% of respondents last year.
According to the NRF survey, 212 million shoppers visited stores and websites over Black Friday weekend, up from 195 million last year. NRF said people also spent more this year, with the average shopper spending $365.34 over the weekend up, 6.4% from last year’s $343.31 spent. The report indicated that total spending reached an estimated $45.0 billion over the weekend.
“While Black Friday weekend is not always an indicator of holiday season performance, retailers should be encouraged that a focus on value and discretionary gifts has shoppers in the spirit to spend,” said Matthew Shay, NRF President and CEO. “As retailers look ahead to the first few weeks of December, it will be important for them to keep momentum going with savings and incentives that holiday shoppers simply can’t pass up.”
There are also indicators that the recent positive trends in luxury goods at retail carried over into the Black Friday weekend, which may signal the top-tier consumer’s willingness to spend on discretionary items instead of basic goods similar to last year.
According to the NRF survey, both department stores (52.0% this year vs. 49.4% last year) and clothing stores (24.4% vs. 22.9%) saw healthy increases in traffic, while the percentage of people who shopped at discounters declined 7.2% from 43.2% last year to 40.3% this year. The number of people who said they purchased jewelry over the weekend rose substantially, from 11.7% of respondents last year to 14.3% of total respondents this year.
More people also purchased gift cards, toys, books, electronics and sporting goods than a year ago.
The NRF survey indicated that 12.9% of survey respondents had purchased sporting goods or leisure items this year versus 12.6% for last year’s Black Friday weekend. The NRF said 52.7% of survey respondents said they purchased apparel or accessory items this year compared to 50.9% of respondents last year.
Sports Executive Weekly polled retailers in the market to get their take on the weekend’s results and everyone who spoke with SEW editors reported favorable traffic gains and improving sales trends. Still, Black Friday weekend doesn’t historically tend to be a solid indicator of the overall health of the upcoming holiday selling period for sporting good-based retailers. Weather may play as large a role in the strength of this season as the consumer’s willingness (or ability) to purchase higher-ticker items.
Management for The Sports Authority said the retailer had its best Black Friday in company history with a healthy bump in traffic and sales over last year.
“We attribute it to the merchandising we brought in, the pricing and marketing we put out there, and our investments in supply chain that has improved our in-stocks,” said Jeff Schumacher, EVP, CMO and CSO in an exclusive interview with SEW. “We think we not only took share in the sporting goods channel but from general merchandisers as well.”
TSA ran a “10-Hour Doorbusters!” promotion from 5 a.m. to 3 p.m on Black Friday in which rhe first 85 people in line at each store received a Holiday Bonus Bucks Card worth between $10 and $500 to be redeemed on Black Friday. Schumacher said TSA saw a particularly strong response to their “buy-one, get-one 50% off” its entire stock of footwear.
He said TSA remains “very bullish” on the holiday season. “Sporting goods is a good buy for Christmas because of the appeal of the active, healthy lifestyle and what we're seeing as a renaissance around the importance of family,” said Schumacher. “People are less concerned with buying video games than with spending time with the family and getting outdoors.”
At Dunham's Sports, which ran early bird specials from 5:00 a.m. to 2:00 p.m., revenues on Black Friday were as expected. “Traffic was strong early – (from) 5:00 a.m. – and held up through 2:00 p.m.,” said President Ken Meehan. “After 3:00 p.m., traffic dropped off.”
The early start at Dunham’s may have seemed late to many shoppers as an NRF report indicated the number of people who began their Black Friday shopping at midnight nearly tripled, from 3.3% last year to 9.5% in 2010. By 4 a.m., nearly a quarter of Black Friday shoppers were already at the stores, according to the NRF.
Meehan added that due to cold weather in the Midwest, Dunham's saw strength in all outdoor footwear and apparel categories. As such, early bird promotions on any outdoor item or boots were “very strong” while Dunham’s saw less response to bike and scooter promotions.
“Black Friday results have never been a reliable predictor of holiday sales for us,” noted Meehan. “I believe the customer knows that Black Friday is the day (when) they can get great deals and the retailers have the best selection of the season. So they shop even in tough times. Sales in table games and fitness were encouraging, while the wheel goods area is a concern.”
At Retail Concepts, Inc., which operates 26 stores, largely under the Sun & Ski Sports moniker, comps were up 24% on both Friday and Saturday, according to company Founder, President and CEO Barry Goldware. Goldware said the gains were led, in order, by footwear, accessories, equipment and apparel. Particularly strong items were Ugg boots, helmet cameras, skis and snow boards with the new rocker technology, Toms shoes, Vibram FiveFingers and the general kids' business.
“We had the normal three-day Thanksgiving sale we always do for the weekend so we're very, very pleased,” Goldware told SEW. “Our stores cater to a more affluent customer and statistics are showing that the affluent are out spending so we may be benefiting from that. We're sort of the Nordstrom of the sporting goods world.”
Goldware is cautiously optimistic for the overall holiday. “I'm a conservative guy and at retail, you live it a day at a time,” said Goldware. “Maybe everybody was out or bargain hunting and that's it, but it's a very good sign and we are optimistic (that) it should continue.”
At Academy Sports + Outdoors, Black Friday sales outpaced last year and were in line with expectations. “Traffic at Academy stores has been steady,” said Anita Sehgal, VP of marketing & advertising. “Every year, we see more and more customers who make Academy Sports + Outdoors a mandatory stop during their Black Friday shopping. We believe this has a lot to do with our EDLP positioning, (which is) the convenience we offer as a one-stop shopping destination for active-minded families, as well as the fact that we continue to enhance our doorbusters and two-day specials.”
All 128 Academy doors opened at 5 a.m. for “Hot Deals.” Early results were led by the sports & leisure and field & stream categories. Key items driving Black Friday sales included heaters, lounge chairs, basketball goals, fire pits, ping pong tables, motorized ride-ons and firearms.
“We are finding that customers are really responding to the fact that our doorbuster specials last all day long (while supplies last),” said Sehgal.
She added, “We are optimistic about the remainder of holiday season.”
“As we have for several years, we had doorbuster items until 1 p.m., and people really responded until that time,” said President Jerry Williams. “About 60% of our daily sales happened by 1 p.m. The past few years, Saturday and Sunday were much lower sales numbers as a result of Black Friday burnout.”
Williams said SVS was “generally optimistic” about holiday selling. “There appears to be a bit more optimism this year from the consumer and our buyers have done a nice job of product assortment,” he added.
At Boulder, CO-based Outdoor Divas, Saturday featured a “Small Business Saturday” event led by American Express and was a bigger sales day for the store than Black Friday. The store was ahead about 20% over the two days.
“The weekend following Thanksgiving traditionally – although good – is by no means our biggest weekend of the year,” said Kim Walker, co-founder and owner. “We did not run any special promos for the weekend. However we ran a Groupon in mid-October, sold about 2,900 of them, and have seen amazing growth in sales and revenue since it ran. I attribute our year-over-year increase for this weekend mostly to the Groupon and good weather.”
She said the gains appear to be driven by healthy sell-throughs of outerwear.
“We're anticipating an amazing holiday season,” said Walker. “People seem to have high spirits this year and are less conservative with their spending than they have been the past couple of years,” said Walker. “I spend a lot of time on the floor through the holidays, so I have firsthand experience with consumer attitudes.”
At RunTex, a Texas-based specialty running store, Black Friday sales were equal to last year with margins up 1%. CEO Paul Carrozza said he was “very pleased” with the results. He noted RunTex has reduced its apparel assortments to focus more on shoes, insoles and accessories. As such, its sales were spread over top four brands — Mizuno, Brooks, Asics and Saucony — more than last year.
At City Sports, overall traffic on Black Friday was ahead 10.6%.
“Black Friday was ahead of budget and beat last year with strong double-digit comps,” said company CEO Jeff Connor. “Running was outstanding as well as the outerwear and fleece categories. We didn't rely on promos although we had a few drivers going on in-store.”
Connor said the week was strong from the start on Monday and the weekend through Saturday was running better than projected. Online demand has been strong as well.
“It was a good start to the holiday season as our core categories performed well,” said Connor. “If we continue to execute the holiday season will be strong!”
At San Francisco's Lombardi Sports, sales were up 28% over Friday and Saturday. CE0 Ken Lombardi attributed the gains to promotions, cooperative weather and the improving economy. He added, “In which order I 'm not sure. But we are grateful.”
The consumer is certainly not done for the start of the season, especially when it comes to online shopping. A report from Shop.org, a division of the National Retail Federation, indicated that 106.9 million U.S. consumers plan to shop on Cyber Monday this year, up significantly from the estimated 96.5 million who shopped online on last year’s Cyber Monday. A survey released last week found that 88.2% of retailers will feature a special promotion for Cyber Monday.
“As the official kick-off to the online holiday shopping season, Cyber Monday shoppers will scour the Internet looking for holiday gifts from a variety of retailers, making sure to take note of specific prices and deals which offer them holiday savings,” said Joan Broughton, Interim Executive Director of Shop.org. “Hundreds of retailers have already announced special Cyber Monday promotions, ranging from free shipping offers to flash sales lasting only an hour or two. When it comes to Cyber Monday deals, shoppers know they can’t lose this year.”
The Shop.org report said that “while the majority of Cyber Monday shoppers will shop from their home computer (89.5%, or 96 million people), a growing number of people this year say they will shop via their Smartphone on Cyber Monday.” The report, which surveyed 4,386 consumers last week, indicated more than seven million people (6.9%) will use a mobile device for Cyber Monday shopping, which is nearly double the estimated four million who used the aid of a mobile device to shop last year (3.8%). A Shop.org survey released last week estimated that 70 million Americans would shop from work at some point during the holiday season.
The National Retail Federation is forecasting a gain of 2.3% to $447.1 billion for the holiday season this year after inching up 0.4% last year and declining 3.9% in 2008. The International Council of Shopping Centers is forecasting a 3.5% comp store sales increase for the November/December holiday period.
For the first look at retail trends in the sporting goods, outdoor, sport footwear and sport apparel market, look for the weekly retail point-of-sales update from SportScanInfo.com at 9 a.m. Wednesday, Dec. 1. OIA VantagePoint, powered by SportScanInfo will release Thanksgiving week data for the outdoor specialty market on the morning of Thursday, Dec. 2.