Brisk online sales take the shine off Black Friday

The day after Thanksgiving, called Black Friday, is typically the biggest shopping day of the year in the US. However, the decades-old tradition is taking a hit as retailers offer early and longer deals on their websites which eliminate the need for
The day after Thanksgiving, called Black Friday, is typically the biggest shopping day of the year in the US. However, the decades-old tradition is taking a hit as retailers offer early and longer deals on their websites which eliminate the need for consumers to wait in long queues and fight for products at physical shops.PHOTO: AGENCE FRANCE-PRESSE

Shopping starts earlier on Thanksgiving, with more consumers buying via their mobile devices

NEW YORK • The decades-old retail tradition known as Black Friday suffered another blow this week after early deals and online shopping robbed the event of many brick-and-mortar customers.

E-commerce orders surged on Thanksgiving, the day before Black Friday, eliminating the need for shoppers to wait in long lines and fight for deals at physical shops.

For consumers who did want to visit shopping centres, many stores were offering deals on Thursday evening.

Online sales surged 14 per cent on Thanksgiving, according to Rakuten Marketing, and websites such as Target.com had their biggest day ever during the holiday. Smartphones and tablets have made it easier for consumers to shop from the couch, and many more of them are now doing just that. Mobile purchases made up 41 per cent of e-commerce orders on Thanksgiving, up from 37 per cent last year, Rakuten found.

"I've been doing this for 40 years, and I've never seen a Friday morning this quiet," said Mr Marshal Cohen, chief industry analyst at NPD Group. "Thursday has stolen Friday, there's no question about it."

Wal-Mart and other chains are also steering customers towards their Web deals. While Wal-Mart still offers Black Friday specials at its supercentres, the day marks the beginning of a streak of online promotions called "Cyber Week".

The world's largest retailer has tripled its e-commerce selection to 23 million products this year, aiming to better compete with Amazon.com. Wal-Mart said on Friday that Thanksgiving was one of its top online-shopping days this year and that about 70 per cent of the traffic to its website came from mobile devices.

Target, meanwhile, is offering 15 per cent off almost everything in its stores and website for two days: today and tomorrow.

The aggressive discounts come at a cost. When Target slashed prices last holiday season, its profit margin slipped to 27.9 per cent from 28.5 per cent. The retailer said that Target.com saw double-digit growth on Thanksgiving, driven by deals on electronics like televisions and Apple products.

Amazon said on Friday that mobile orders on Thanksgiving topped last year's holiday and Cyber Monday combined. Black Friday is on pace to beat last year in terms of item orders. Top-selling items include Instant Pot cookers, Hasbro's Pie Face game and Amazon's Alexa devices.

Thanksgiving eve is becoming a bigger shopping day too. On Wednesday, three times as many people were browsing online at retail sites compared with a year ago, according to Rakuten, which tracks online behaviour through the e-commerce platforms it provides. This comes after EBay made a plea for consumers to start shopping on their phones that day by christening the event "Mobile Wednesday".

Even so, there are still millions of people willing to brave the cold for a deal.

Ms Olivia Daniels arrived at a Best Buy store in Brooklyn at 5am on Friday, three hours before it opened. She hoped to nab a 40-inch LG television for US$150 (S$214) - an almost 50 per cent discount. The offer was too hard to pass up for the 34-year-old, who currently is not working because she is on kidney dialysis.

The National Retail Federation (NRF) estimates that about 137.4 million consumers will make purchases in stores or online over the four-day weekend that started on Thanksgiving. But the amount that Americans have spent has declined in the past three years, slipping 26 per cent from 2013 to an average of US$299.60 per person last year.

That is a sign that holiday purchases are spreading out over a longer time frame. Spending during the overall season - November and December - is still expected to grow 3.6 per cent to US$655.8 billion, the NRF estimates.

BLOOMBERG

A version of this article appeared in the print edition of The Sunday Times on November 27, 2016, with the headline 'Brisk online sales take the shine off Black Friday'. Print Edition | Subscribe