Surge of online spending means more Americans stay home on Black Friday

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Retail sales rose on Black Friday with record online spending, even as fewer people visited stores for the biggest promotional event of the US holiday shopping season.

Sales on Friday rose by 3.4 per cent year on year from Black Friday 2023, according to data released on Saturday by Mastercard SpendingPulse.

That masked starkly different trends in ecommerce and in brick and mortar locations. While online retail sales jumped by 14.6 per cent year on year, in-store sales rose by only 0.7 per cent, Mastercard said. The figures are not adjusted for inflation.

Black Friday remains a huge promotional event for US retailers in their critical holiday season, despite deals bearing its name that began weeks ago in stores and online. The availability of discounts across the month of November may have diminished the importance of Black Friday, which has historically led shoppers to mass before dawn outside stores.

“Black Friday’s not what it used to be,” said a store clerk at an Abercrombie & Fitch outlet in a crowded suburban New Jersey mall on Friday, where signs outside the clothing store “25% Off Everything”. “Most people just shop online now. Ever since Covid, Black Friday has not been the same.”

Still, the National Retail Federation expected it to remain the most popular day of a long holiday weekend during which an estimated 183mn people — more than half of the US population — will go shopping.

More than 55 per cent of holiday shoppers did not plan to start shopping until the Thanksgiving holiday this year, according to a survey by Circana, a market research firm. Almost a quarter believed they could still find the best deals on Black Friday. 

Latriece Watkins, chief merchandising officer at Walmart US, said that while many customers have been shopping Black Friday deals online since Monday, “they still love the energy and excitement of Black Friday in-store”.

Some are picking up orders made online. Watkins said that top items scanned at store checkouts have been Apple AirPods and Beats headphones, 65-inch TCL smart televisions, game consoles and men’s denim jeans.

Transactions monitored by Adobe Analytics showed online spending rose 10.2 per cent on year to a record $10.8bn for Black Friday. The sum was more than twice what consumers spent online during Black Friday five years ago, Adobe said.

Of those purchases, almost $700mn used buy now, pay later services like Affirm and Klarna for categories such as electronics, clothing, video games and groceries, Adobe said.

“In the online retail space, there are domestic and offshore retailers all vying for the US consumer’s dollar, and that produces a lot of competition, a lot of options. As a result, that puts downward pressure on price,” said Vivek Pandya, an analyst at Adobe.

At stores tracked by Sensormatic Solutions, shopper traffic on Black Friday was 8.2 per cent lower compared with 2023.

“Retailers are changing their approach to meet shopper expectations, extending their deals and promotions beyond Black Friday itself to support a more convenient shopping experience. This led to a softer day-of turnout than expected as shoppers were able to spread out their purchases and spend time with their families,” said Grant Gustafson, head of retail consulting and analytics at Sensormatic.

RetailNext, another data provider, said traffic at stores it follows fell by 3.2 per cent nationwide on Black Friday. Joe Shasteen, RetailNext’s global manager of advanced analytics, said shoppers fatigued by inflation appear to be putting a priority on essential purchases.

US retailers have approached the holidays with anticipation after a year of uneven results. Best Buy reported a drop in comparable sales during its latest quarter, but the home electronics chain this week said that holiday promotions were reviving demand. Walmart, which has enjoyed consistently strong sales this year, cited “momentum” going into the season. 

Target forecast flat sales in its current quarter and is applying discounts of up to 50 per cent to thousands more items during the holiday season. The big-box retailer said shoppers lined up as early as Thursday night to shop for Black Friday items including a Taylor Swift book, vinyl record and CD that offered exclusively inside stores on Friday.

At the mall in New Jersey, an 18-year-old shopper named Skyla was indignant over the $24.95 price of scented candles at Bath & Body Works, even with a “buy three, get three free” deal offered across the store. “What kind of sale is that?” she complained.

Asked her next destination, she said: “I’m going to go to a thrift shop”.