With preliminary results in for the beginning of the holiday shopping season, retailers have reason to celebrate. Even stagnant brick and mortar shop sales couldn’t dampen the mood as record online sales buoyed overall figures. Instead of replacing physical retail, increased online sales signaled consumer confidence in an improved economy.
Brick and Mortar Retail
In past years, flat sales for physical retail would have been depressing news, especially for Black Friday – known as opening day for the holiday shopping season. This year, however, shops are celebrating minimal change as compared to last year as a victory over the advancing market share of online purveyors. Retail tracker, ShopperTrak reported that sales on Thanksgiving and Black Friday registered within one or two percentage points of last year’s figures, a statistical wash.
At least for now, many physical retailers have been able to stave off being replaced by online giants like Amazon and specialty online stores like Blue Apron, which mails meal kits that are ordered online and Chewy.com, an online pet supply shop. Both Blue Apron and Chewy appear in the top five of STORES Hot Retailers for 2017.
In a press release, Brian Field, Senior Director of Advisory Services for ShopperTrak noted the continued importance of physical shops for the retail industry, “There has been a significant amount of debate surrounding the shifting importance of brick-and-mortar retail, and the fact that shopper visits remained intact on Black Friday illustrates that physical retail is still highly relevant and, when done right, profitable.”
On the Monday morning after Black Friday, stock values for big box retailers like Target and Wal Mart increased slightly, demonstrating they are still important players in the sector.
The Friday after Thanksgiving continues to be the most popular shopping day of the calendar year according to ShopperTrak with the heaviest foot traffic between 2-4pm. Other top five shopping days include Saturday, Nov. 25th, Saturday, Dec. 16th, Saturday, Dec. 23rd and Tuesday, Dec. 26th.
WalMart pulled in shoppers with advertisements for $125 39” televisions and $129 I Phones. Kohl’s offered a $189 X Box and $99 Fit Bit Watch. Kohl’s reported in-store traffic was boosted by online orders picked up in store and WalMart released information showing their Black Friday online products sold out before the day began.
Bob Sullivan, Manager of Christy Sports’ Park Meadows location echoed in-store flat sales results. Christy’s sells and rents ski and snowboard equipment as well as patio furniture. According to Sullivan, “Black Friday sales were average compared to years past. We are somewhat immune from Cyber Monday and online retail since people need to be here to try on equipment. Still, so much of our business is weather dependent.” Sullivan continued, “It’s hard to try on a $300 jacket when it’s 70 degrees outside. We were hoping for more but with 70 degrees, we didn’t hit huge numbers.”
One category that did hit historic levels was gun sales. The Federal Bureau of Investigation reported a record number of background checks through the National Instant Criminal Background Check System (NICS) – over 203,000. This year’s checks increased about 10 percent from the previous record high set during 2016 Black Friday gun sales.
In recent years, retail trackers rank Cyber Monday as at least as important for online shopping as Black Friday is for physical retailers. Adobe Analytics tracks the top 100 online retailers and expects $6.6 billion in internet sales for Cyber Monday which would mark the most digital sales for a single day in history. Even before Cyber Monday, online sales hit new highs for the period from November 1-21, registering nearly $29 billion in sales, more than $1 billion every day. Black Friday accounted for nearly $5 billion in online sales.
Overall, 2017 online sales should reach a 14 percent increase over 2016 figures with the ease of making online purchases through mobile phones a greater factor. Nearly all online retail used to be done through desktop computers, now under 70 percent of purchases are made that way while more than 20 percent of purchases are completed with a mobile phone and 10 percent with a tablet. Smartphone purchases are showing the most growth.
Small Business Saturday
As one means of countering the trend of online and big box retail, local communities and buy local advocates have increased marketing campaigns for Small Business Saturday, designed to support Mom and Pop brick and mortar shops.
For Denver’s Five Points neighborhood, Small Business Saturday is an important shopping day for businesses struggling to stay alive amid new retail construction. Activist, Brother Jeff, promotes Black Dollar Saturdays all year long from his cultural center on 28th and Welton but the Saturday after Thanksgiving might be the most important. “Gentrification and the loss of nearly every Black business has made those who do have businesses work more collectively. There must be a way for ordinary people to do business in Denver without all the focus being placed on developers and billion dollar projects.” This year, Jeff says Small Business Saturday, “Went well. There were shoppers being intentional about where they spent their holiday dollars.”
Cherry Creek North offered discounts as much as 25 percent on Small Business Saturday as an incentive to attract customers to the Denver boutique shopping neighborhood. The district sweetened the pot by offering a chance to win gift certificates.
South Broadway shops got in the act, banding together to provide entertainment and venues for local artists to sell their wares. Newly developed Stanley Marketplace in Aurora created a festive environment with giveaways and discounts to entice foot traffic.
Of total holiday shoppers, 43 percent will participate in Small Business Saturday according to the National Retail Federation.
Shopping Trend – Pop-Up Shops
Retail trackers pointed to Pop-Up Shops as one trend having the most growth potential for the retail sector. Defined as temporary retail in place for less than 120 days, pop-up shops can serve as a highly targeted retail experience for a specific demographic or a low-risk investment for start-up companies looking to break into the retail sector.
One such concept is the kiosk program at Denver International Airport, providing low cost and temporary space for new and/or small companies. Airport concessionaire, Keith Montoya, is a member of the Airport Concessions Disadvantaged Business Enterprise (ACDBE) program which helps small companies owned by people of color access the airport’s retail market. Montoya was also part of the kiosk program, starting out selling sports paraphernalia and since graduating to owning several concessions throughout the airport. The kiosk program allowed him to get his feet wet in airport retail, networking with large firms and staying abreast of the contracting process.
Pop-up shops and kiosks are also popular in shopping malls and seasonal retail areas.