Shoppers have dropped tens of billions of dollars in stores and online over the last five days. What does such an impressive outpouring tell us about today’s consumer mentality, and the state of the economy as a whole?
There are still nearly four prime shopping weeks to go before Christmas, but now that the Black Friday-Cyber Monday consumer bonanza is over, some observations seem in order:
Consumers like the idea of shopping at midnight on Thanksgiving. Though considered controversial, family un-friendly, and even unpatriotic in certain circles, the decision by many retailers to open stores at midnight (or even earlier) on Thanksgiving night is being viewed as a success. Mere hours after finishing turkey dinners, millions of shoppers showed up at stores and eagerly opened their wallets, leading the biggest day for Black Friday sales ever. Because the midnight openings have been deemed successful—”well worth it for both retailers and shoppers,” according to the National Retail Federation—the Minneapolis Star-Tribune, among others, speculates that Thanksgiving night openings won’t be a passing fad. Going forward, expect the late night Turkey Day store openings to be standard practice.
Consumers like shopping (from home) on Thanksgiving Day too. The market research firm ComScore reports that online retail sales totaled $479 million on Thanksgiving Day 2011, up 18% from last year’s Turkey Day e-commerce tally. The rise in e-commerce on Black Friday was even greater, hitting $816 million compared to $648 million on Black Friday of 2010—a 26% increase.
Younger consumers and men are more likely to shop late at night. The early pre-morning Black Friday shopping adventure has traditionally been a mostly female phenomenon, dominated by moms checking off their holiday shopping lists. This isn’t the case for late-night store openings on Thanksgiving evening. The New York Times reports that 18- to 34-year-olds who went shopping on Black Friday were far more likely than 35- to 54-year-olds to be in stores by midnight—36.7% vs. 23.5%, respectively. Men were also more likely to shop on Thanksgiving night as opposed to the pre-dawn of Black Friday:
“Men really aren’t willing to pull themselves out of bed at 4 a.m. for a bargain, but they will go” late at night, [NRF vice president Ellen] Davis said. “Men are increasingly budget-focused, and like the idea of looking for good deals.”
Even after splurging in stores, consumers will splurge online. After shoppers turned out in full force over the Thanksgiving weekend, a slight lull in Cyber Monday spending would have been understandable. Instead, according to a MarketWatch report, early online sales for Cyber Monday were booming—up 30% compared to the year before.
Credit card use appears to be on the rise. Oh, so that’s how consumers are paying for all of their Black Friday-Cyber Monday purchases! A Javelin Strategy & Research study indicates that, after several years of declining credit card use among consumers, traditional plastic is poised for a comeback. Beth Robertson, Javelin’s director of payments research, says: “Despite the nation’s very rocky economic recovery, consumers appear to have halted their belt-tightening and bank incentives to use credit cards rather than debit are gaining appeal.” Over the next five years, credit card use for online purchases is expected to rise by 63%, compared to an increase of just 2% for debit cards.
Black Friday shoppers are capable of pretty horrendous behavior. Another Black Friday weekend, another series of ugly shopping incidents. The rundown this year includes a Walmart shopper pepper-spraying other customers during a scrum over Xbox gaming consoles, and mobs of shoppers who stepped over a dying man who collapsed in a Target store in West Virginia.
The “Occupy” protesters can protest shoppers too. Plenty of the 99 percent demonstrated over the weekend that they have no qualms about shopping and supporting capitalism to their heart’s content. This opened shoppers up to being the subject of protests, right alongside Wall Street fat cats. Protesters gathered outside stores in San Francisco’s Union Square, for example, where a boy held a sign reading: “What is in your bag that’s more important than my education?”
Big sales numbers don’t necessarily mean good things for the economy. The weekend’s monster sales figures have been welcomed as an indicator of consumer confidence, but, as a USA Today column points out, “The previous top weekend was in the depths of the recession in 2008.” As in 2008, 2011 shoppers could have turned out in huge numbers in an attempt to stretch their already-stretched budgets and secure the absolute best prices on the few gifts they can afford this year.
According to a new Bankrate poll, 42% of Americans (including 49% of parents) intend to spend less than last year on holiday purchases, while only 10% plan on spending more. The Washington Post reports that, despite strong early season sales numbers, retailers aren’t adjusting projections for overall holiday sales—which are still expected to experience meager (not robust) growth this year.