Black Friday is back, and this year it's poised to be more promotional than ever. While the deals have already begun, for some retailers weeks ago, the pinnacle weekend is finally upon us — and consumers are ready to spend.
In fact, about 75% of Americans will shop this weekend, spending an average of $427 between Thanksgiving Day and Cyber Monday, up from $400 last year, according to a study from Deloitte.
To get you through the make-or-break holiday, Retail Dive has once again compiled a go-to guide complete with trends to watch, Twitter accounts to follow for real-time updates, podcasts to listen to and more. Also be sure to check out Retail Dive's homepage for the latest on Black Friday and Cyber Monday.
3 trends to watch
1. Black Friday 'is quickly becoming Black November'
Rapid growth online and disruption from new entrants into the industry have fostered an incredibly competitive environment in which retailers have to find unique ways to attract consumers to stores, websites and mobile apps. For many, the core strategy has been to compete on price and deeply discount earlier in the month.
Ultimately, shoppers care most about price: A PwC analysis found that 63% of consumers said price motivates their purchases. "It's quickly becoming Black November," PwC's Consumer Markets Leader Steven Barr told Retail Dive.
For the biggest players, like Walmart, Amazon and Target, price will still be the differentiator, as will convenience and open doors. All three plan to open on Thanksgiving Day — a trend many smaller and specialty chains are turning away from.
Since the great recession, consumers have become permanently conditioned for significant promotional events throughout the holiday season, Barr said. "With a few exceptions of those unique doorbusters that cause people to get in line at midnight or 2 a.m., the reality is the deals that used to be exclusive to Black Friday are no longer exclusive to Black Friday — and there are just deals all of the time," he said. "Black Friday is no longer distinctive and so that's really the theme."
For those not willing to compete on price, differentiation is everything. That means offering extraordinary customer service levels, unique product offerings or a mix of retail and services, Barr said.
"The message today is one about the difference between being differentiated and undifferentiated," he said. "If you're undifferentiated, it's a race to the bottom and those retailers are simply going to fail. And the retailers that are able to differentiate themselves, whatever that point is, are going to do well."
Each year the holiday seems to creep earlier, and if sales don't go well they drag on later, too. One way to tell how well retailers are differentiating is by comparing the deals on Thanksgiving to those offered just after the blockbuster weekend, Charlie O'Shea, lead retail analyst at Moody's Investors Service, told Retail Dive.
"You go in on Thanksgiving and say stuff is 50% off, you let things slide over the weekend. What are the prices on Tuesday? Are they 40% off or 60%? If it's 40%, then the 50% seemed to get the job done and now they can be less promotional," he said. "If it goes up to 60%, weekend didn't go so well, Cyber Monday didn't go so well. So now you have to become even more promotional and you're really on a merry-go-round."
2. In-store and online shopping will work together
Black Friday this year is poised to be the busiest digital shopping day in U.S. history, besting Cyber Monday for the second year in a row, according to Salesforce’s holiday report. Cyber Week (Thanksgiving to Cyber Monday) will also see the deepest discounts and the highest rate of free shipping (86% of all orders), according to Salesforce’s number crunching.
"The biggest change occurred last year when the big-box stores started selling the doorbusters online as well as in the stores," O'Shea said. "So you could sit on your couch and buy the same TV or hot product that you would, in years past, have to wait in line to get."
"Online cannot exist without store-based retail and store-based cannot exist without online. That is the future state."
Consumer Markets Leader at PwC
But retailers shouldn't fret too much about online sales cannibalizing in-store deals. "There's all of this scrutiny of what are the sales on Friday after Thanksgiving from midnight to midnight, and I don't know how relevant that is anymore and it hasn't really for a while," O'Shea said. "If someone purchases anything over that weekend, it counts. The retailer can't care what day of the weekend their product gets sold as long as it get sold."
Retailers also can't care where those dollars go — whether it's online, through mobile or in-store. The key, Barr said, is that all of these channels work together. "Online cannot exist without store-based retail and store-based cannot exist without online. That is the future state," he said. "Unfortunately though, the retailers stuck in the middle are ones that are not going to win with the consumer and ultimately [are] going to have to differentiate themselves or find themselves on the list of retailers closing their doors."
3. Mobile will drive digital sales
Last year, mobile generated 36% of total digital sales on Black Friday, surging 33% over last year and eclipsing $1 billion in one-day total sales for the first time ever, according to Adobe. Walmart alone credited mobile devices for driving more than 70% of its Black Friday traffic.
This year, mobile will be bigger than ever.
Americans are expected to spend nearly 45 million hours on Android shopping apps alone during the week of Black Friday, a 45% jump from 2015, according to research by App Annie. Revenue generated through apps could break records this season, as shoppers are expected to spend over 6 million hours in the top five digital-first apps on Black Friday alone.
"People will be out boppin' around, something pops into your head, you've got the app on your phone —boom, that's the purchase. That's the instant gratification U.S. consumers are used to," O'Shea said. "You'll see more mobile activity this year than ever before, and I think every year mobile has to grow faster than desktop sales grow, otherwise retailers aren't getting enough out of their mobile apps, just like online sales have to grow at multiples of brick-and-mortar sales otherwise the retailer is probably doing something wrong with its website.
A bad mobile experience can hurt retailers big time when it comes to online sales. Last year, Adobe found that 30% of all shopping carts led to orders on desktop, but that number plummeted to 19% of carts on smartphones, indicating that consumers are running into significant obstacles on mobile sites.
"Mobile is a big part of everybody's arsenal and the retailers that have struggled online during the holiday, it's typically due to the mobile app," O'Shea said.
For more Black Friday and hot holiday news, follow the Retail Dive team on Twitter:
Laura Heller, Senior editor: @lfheller
Corinne Ruff, Editor: @corinnesusan
Cara Salpini, Associate Editor: @CaraSalpini
Ben Unglesbee, Reporter: @Ben_RetailDive
Retail Dive's main Twitter account: @retaildive
Podcasts to listen to:
More good Black Friday reads:
Amazon launches Black Friday deals — 50 days early
Black Friday, Cyber Monday 'neck-and-neck' this season
Only 17% of Americans want retailers to open on Thanksgiving
Toys R Us won't match 'many of the best prices' Black Friday weekend