In a tradition of the American holiday season, pre-Black Friday sale promotions are landing in mailboxes and in-boxes. Targeted ads and merchandise recommendations pepper Facebook and Instagram.
They’re the appetizers to Black Friday, the antidote to the feeling of missing out for people obligated to work or stay at home during the main event. Pre-Black Friday has become another form of comfort, and during the pandemic when some comforts — seeing friends and family, traveling, going out to eat — have become rare privileges, retail therapy is TLC for those who can afford it.
Black Friday is to some consumers a largely no-holds-barred time to splurge — for shoppers to treat themselves and feel pleasure in taking home a coveted purchase.
“There’s the thinking that a lot of people will be buying themselves and their families a lot of feel-good items this holiday season,” said Steven Gartner, executive vice president of global retail for CBRE, the Los Angeles-based commercial real estate services and investment firm. “So those that normally found shopping to be therapy may really spend big this holiday season, when we all could use a dose of comfort.”
Apparel sales are likely to be down as fewer people dress up and go out and as many consumers delay buying cold-weather clothing during a milder-than-normal winter, so far — “it’s a Christmas sweater, not a Christmas bathing suit,” Gartner said. Spending on at-home entertainment is projected to remain high, as it does every year.
Appliance and toy sales could also fare well, said Bob Bernstock, president and chief executive of Realtime Media, a Philadelphia-based company specializing in customer acquisition and digital promotion. Success for retailers has continued to depend on connecting with customers, deftly using social media, and incorporating avenues to pique customer interest, he said. Sweepstakes that ask consumers to enter their names, email addresses, and phone numbers are one way.
“A lot of the direct marketing and email sign-ups and the social media sign-ups essentially cost nothing,” he said, and the measures can offer notable benefits for retailers.
For small retailers, loyal customers and word-of-mouth go far. Jenny Martin, the owner of Lost and Found, a clothing boutique in Philadelphia’s Old City neighborhood, credited generational customers, such as a mother bringing her son or daughter, for keeping business lively. She doesn’t participate in Black Friday, only Small Business Saturday, which is the next day.
“We’ve been here 16 years,” she said. “It’s word of mouth; it’s our reputation. We’re very affordable. Our prices are friendly. People will come in.”
For those trumpeting Black Friday discounts, both in advance and on the day of, sales from big-box, as-low-as-the-price-can-go behemoths, in particular, indicate that they will help to further achieve satisfying gains.
Target (NYSE: TGT) said in its third-quarter earnings report that total sales among its stores that offered comparable goods and services grew 20.7%, a figure attributed to 9.9% growth in sales at comparable stores and a 155% spike in digital sales.
The company’s operating income measured in at $1.9 billion in the third quarter, a stunning increase from $1 billion last year, according to the report.
“We’ve seen a deepening level of engagement and trust from our guests,” said Brian Cornell, chief executive of Target, which has close to 1,900 stores in the U.S. “The result is unprecedented market share gains and historically strong sales growth, both in our stores and our digital channels.”
In the third-quarter earnings report for Walmart (NYSE: WMT), total U.S. revenue was $134.7 billion, a jump of $6.7 billion. Its online sales grew by 79%. Internationally, total revenue was $29.6 billion after adjusting for shifting currency rates, which knocked revenue down by $1.1 billion. The company’s cash flow grew by about $8.3 billion.
Amazon (NASDAQ: AMZN) reported a 37% increase in net sales compared with last year’s third quarter, according to the company’s third-quarter earnings report. Its net sales were most recently $96.1 billion compared with $70 billion at the same time the prior year. Its net income was last reported to be $6.3 billion, a significant spike from $2.1 billion during last year’s third quarter.
In total, across an expanse of various retailers and food services, sales in October, the latest set of numbers made available by the U.S. Census, were an estimated $553 billion, a jump of 0.3% from September. Retail analysts have partially credited increased consumer spending to “revenge buying,” the intense surge in purchasing among customers who were prevented from shopping in person at the beginning of the pandemic.
But as Philadelphia officials reported a growing number of coronavirus cases this fall, pedestrian traffic in the city’s popular shopping areas dwindled, said Paul Levy, president and chief executive of the Center City District, which helps with security, cleaning, and planning for Philadelphia’s downtown. There was a weekly average of 23,031 pedestrians in 2019 at 16th and Chestnut Street, location of the Shops at Liberty Place, a Nordstrom Rack, and a Sephora. This year, there was an average of 12,533 through Nov. 7.
On the 1700 block of Walnut Street, where a long line of various, mostly chain, stores line the street, there was an average of 18,439 pedestrians a week last year and 11,111 this year, according to the district. During the summer, thieves cleaned out a wide array of shops at both 16th and Chestnut and 17th and Walnut as unrest grew over the police killing of George Floyd.
The steep drop in pedestrian traffic, and retail sales, was dire for people working in restaurants, food service, and retail, the district said. There are 103,946 jobs across those sectors across Philadelphia, which represent 15% of the total employed workforce in the city.
This year, as the pandemic continues to upend communities and Philadelphia officials have encouraged residents to keep holiday gatherings small, people will likely shop closer to home, said Gartner, of CBRE.
“It’s a reliable setting,” he said. “However during the holiday season, people may choose to break out of what we have seen in the last few months and venture a little further, and again, that’s what the luxury of time does.”