Although Black Friday was a bust, retail sales were up last month
In a changing retail landscape, a retail specialist at Deloitte & Touche explains what's up with holiday shopping.
TWO WEEKS AGO, the National Retail Federation (NRF) reported that overall shopper traffic on Black Friday weekend - Thanksgiving Day through Sunday, Nov. 30 - dropped more than 5 percent from 2013. Actual spending was expected to decline by more than 6 percent from 2013.
On Thursday, after a stronger-than-expected retail report from the Commerce Department, the NRF said that lower prices at the gas pump put more money in the pockets of consumers and that its forecast "is right on track" for 4 percent holiday-sales growth.
So, Black Friday was a dud but retail sales were up. Confused? To get a better understanding of what's happening, I spoke with William Park, Deloitte's retail specialist in Philly. Here are some key takeaways from our convo:
* Black Friday has lost its luster. "We think of Black Friday as the big event, but the reality is it's not as big a deal anymore," Park said. He noted that some retailers actually opened stores on Thanksgiving and thus some of the Black Friday traffic shifted. Park said other retailers started Black Friday sales after Halloween.
* Retailing is evolving, and digital is influencing shopping habits. "I think you're seeing an evolution in retailing, a very educated consumer who is using a smartphone or iPad to shop," Park said, adding that more than half of in-store sales are influenced by digital devices. Shoppers have a lot more information and "don't really need to depend on the 4 a.m. doorbuster on Black Friday to get them into the store," Park said. Deloitte's survey of the Greater Philadelphia market found that half of the respondents said they would do the majority of holiday shopping in December or later.
"The fact they're willing to wait leads you to believe Black Friday isn't the way people want to shop anymore," Park said.
* Retailers have made the game about price, but shoppers want a unique experience. Price is not a great differentiator when everybody is doing it, so the key is to create value for the shopper. "It's a sales associate who's friendly and knowledgeable, the layout of the store, quick and easy checkout where you can use a smartphone, the 'Wow!' factor. Those are the retailers that are going to win," Park said.
* Small businesses have an opportunity to exploit the changes in retailing. "People really like the idea of supporting the local economy, shopping local, finding a unique gift, avoiding the hassles associated with chain stores," Park said. Small businesses need a good website and a presence on social media. Consumers "need to be able to find you, learn about your return policy and see reviews of products."
Is Black Friday dead? If not, it's definitely on life support.