By one estimate, retail sales hit $59 billion over Black Friday weekend. Or was the sales total a mere $22 billion, as another index stated? Similarly, online sales on Cyber Monday may have reached $1.46 billion or $1.98 billion, depending on which set of statistics you prefer.
The most widely-cited data from the Black Friday weekend came from the National Retail Federation (NRF), which announced that “total spending reached an estimated $59.1 billion” from the period starting on Thanksgiving Thursday stretching through Sunday. Simple enough—except for the presence of another set of stats indicating that the total was significantly lower than that.
The research firm ShopperTrak offered these numbers last week in a press release regarding Black Friday weekend:
Retail sales increased 2.7 percent, with shoppers spending about $22 billion across the weekend’s four days. Thursday’s “door-buster” deals drove sales and traffic earlier in the weekend.
Which of these estimates—$59 billion vs. $22 billion—is more accurate? And why they heck aren’t they at least in the same ballpark?
Let’s address the latter question first. ShopperTrak founder Bill Martin explained to me that his company, which specializes in counting in-store foot traffic, estimates a national sales total just for what are known as GAFO purchases. GAFO stands for General merchandise, Apparel, Furniture, sporting goods, electronics, hobby, books and Other related store sales. “You can think of these sectors as what you purchase with disposable income,” said Martin. Census.gov notes that “GAFO represents sales at stores that sell merchandise normally sold in department stores.” Many, many other purchases, including goods at drugstores, supermarkets, auto part shops, catalogue sales, and all manner of online shopping, are not included in GAFO, nor in ShopperTrak’s estimates.
All of the purchases just mentioned are, however, included in NRF’s more impressive sales total. “They’re looking at a much broader segment of purchases,” said Martin. Sure, the NRF’s tally incorporates typical holiday gift items, such as clothing, DVDs, video games, skiing equipment, and jewelry, as well as the rapidly growing e-retail category. But the total also factors in shampoo, milk, lumber, motor oil, and many other types of everyday necessity-type goods that the average consumer probably wouldn’t think would be included in data that comes under the banner of “holiday shopping.”
Which leads us to the former question: Does NRF data offer an accurate picture of consumer holiday shopping behavior? Many would argue no, and not only because the numbers include nongift purchases shoppers would be making at drugstores and the supermarket, regardless of whether it was Black Friday or April Fool’s Day.
According to Martin, ShopperTrak’s sales totals incorporate, among other things, foot traffic counts and actual sales totals provided by retail clients. By contrast, “the NRF data is survey data,” said Martin. “It offers some idea of what shoppers are thinking. But our gripe is that consumers don’t really know what they spent last year, and they don’t know what they’re going to spend this year.”
A CBS News post described the NRF’s numbers as “notoriously unreliable, usually in service of painting a bullish, or at least, improving picture of retail sales.” A Washington Post column published during the aftermath of Black Friday 2011 noted that the NRF’s survey-based data has later been determined to be off wildly in the past, and here’s why:
When you conduct a survey, you are asking people to say what they plan to do. Hence, what you learn is what they believe about their future behavior. We are an unreliable bunch. If you want to learn how much people actually spent, you need to measure that at the cash register.
Even when competing estimates both incorporate actual sales transactions, however, the sales totals can vary widely. The research firm comScore estimated U.S. online sales on the most recent Cyber Monday hit $1.465 billion, a 17% increase over the corresponding day in 2011.
How did the company come to such conclusions? “We measure observed behavior from a panel of one million U.S. internet users and statistically project that sample to the total U.S. internet population,” comScore’s Andrew Lipsman explained via e-mail.
The number crunchers at Adobe Digital Marketing, on the other hand, said that, in essence, comScore’s estimates were off by a half-billion bucks:
Cyber Monday online sales reached $1.98 billion, a 17% growth versus last year. The actual results varied from our original prediction by less than 1%.
Yet another estimated, from IBM, had it that Cyber Monday sales were up 30% over last year, though it didn’t provide a dollar total.
Tamara Gaffney, a senior marketing manager with Adobe, said that her company sums up sales revenues from 500 of its retail clients, and then multiplies that number by a factor that incorporates financial reports, analyst reports, and other data to reach an overall total. “Our Cyber Monday sample was based on an aggregation of 200 million transactions with over 8.4 million completed sales on that single day alone,” Gaffney explained. “We’re confident that this robust data set generates much more accurate results.”
Forgive me, but I’m not confident that this or any of the statistics rolled out in the past weeks are entirely accurate. Clearly, there are very different ways of tabulating estimated sales totals, and we all know that numbers can be tweaked and sliced to the point that they don’t necessarily reflect reality. While these sales totals are supposed to offer an indication of consumer behavior, it’s wise to never let them affect your behavior.