The numbers on #BlackFriday + #CyberMonday are in and they did not disappoint:
Consumer confidence is high, but careful to make blanket statements about the economy: The US Consumer Confidence Index has reached its highest level in 17 years, buoyed by a stock market that doesn’t seem to have begun defining its upper limits and the lowest unemployment rate in nearly a decade.
United States is still recovering from horrific storms and tragedy: There is a danger in looking exclusively at national numbers and blended averages or “peanut buttering” success across product categories. This holiday period won’t be great for retailers serving the charred remains of neighborhoods in Santa Rosa, California or the storm-ravaged communities across the Gulf of Mexico and the Caribbean, where consumers are going to be spending their money—assuming they have any to spend—rebuilding rather than accessorizing. And sadly, too many customers in communities from Las Vegas to Sutherland Springs, Texas will be recovering from man-made tragedies as devastating to them as any natural catastrophe.
Consumers spending more dollars but purchasing fewer items: Our research indicates that about a third of consumers believe they will be spending more total dollars this year. But that increased spending will largely benefit categories such as electronics where high demand items tend to carry larger price tags—those $900 iPhones, for example—as well as higher ticket “must have” goods in general. In other words, consumers will be spending more dollars but purchasing fewer items.
my take on the Black Friday and Cyber Monday madness:
Overall people were out shopping, however there wasn’t the frenzy we would see from years past:
–Store traffic was up in high-end malls.
–People responding to deep discounts of more than 40% on apparel and home goods. Stores include:
- Aeropostale with 60-70%
- Gap with 50%
- Hollister with 50%
–Stores that didn’t see a lot of traffic: those that had 30% or less marked down OR most big box retailers.
Takeaway: While it would seem larger overall discounts means economy is doing poorly and smaller discounts indicate the opposite, people are still price sensitive despite indications economy is turning around. This also means consumers are still wary about how they are spending, hence there is still an element of uncertainty.
Store traffic was DOWN in the following stores:
–Coach: they did not have effective Black Friday promo, perhaps due to their recent pivot to become a luxury millennial brand competing with the likes of Gucci. Coach's new recruitment of Selena Gomez as brand ambassador is proof positive of this, as Selena has worked closely with Petra Collins on her new album's aesthetic, who's been working heavily with Gucci on their new fragrance and eyewear campaigns this year. Only time will tell if this proves an effective brand strategy, or just dilutes the millennial market further.
Walmart- store traffic peaked at around 8pm. Lots of traffic was to be expected, but it died down by 9:00 pm. Teeterboro high volume rush there. Target and Best Buy had similar failures.
Takeaway: online spending is going to be the majority of revenues generated this season as 80% take to mobile decides to shop (source: PayPal). Stores pushing the experiential to get people in to shop (Yeezy show raffle).
The most coveted items at the store? Electronics.
- Sharp 55 inch $298
- Element 39 inch $125
- Couple inches smaller $328
- Online orders of electronics
- PlayStation $200
- Xbox one S $189
- iPads $250 32,gig
Takeaway: electronics are the clear gift to give this season with better than ever pricing. This may change if NAFTA goes away.