Full transcript (with links):
NICKY: Hello and welcome to episode number three of Soundcast, the Econ Department’s official Podcast. I’m one of your hosts, Nicky Smit.
COLE: And I’m host number two, Cole Driscoll, and have we got a topic for today. You guessed it, Black Friday.
NICKY: And Cyber Monday and Thanksgiving and all these other days with big sales. There’s something of interest happening here, Black Friday sales went down.
C: And so did in-store sales on Thanksgiving. This Episode will be about uncovering why sales are going down on these big retail shopping days, and where can expect this to go in the future.
NICKY: So, first the facts. This year, shoppers spent $10.4 billion at stores on Black Friday. As big as this sounds, that’s a 10% decrease from last year, which had $11.6 billion in sales.
COLE: Thanksgiving Day sales also dropped, by 10%, from $2 billion to $1.8 billion. Cyber Monday sales, on the other hand, shot up 16% from last year, and are now just over $3 billion. So, here’s the big question. Why?
NICKY: And there’s no one answer to this, but it’s also no surprise that this is happening. Online shopping is really gaining some traction this year. You can see it in all the numbers. While shopping in, and I hate this phrase, brick-and-mortar stores went down on Black Friday and Thanksgiving, online shopping on these days went up.
COLE: $2.72 billion was made online on Black Friday this year, a 14% increase from just last year. And it’s even bigger on Thanksgiving, which had a 25% increase in online shopping to $1.73 billion in sales. And a lot of these online shoppers were most likely people who started their Black Friday experience in stores.
NICKY: And there’s good reason to go from in-store shopping to online shopping. The biggest reason is super obvious, it’s just way more convenient to shop online. You can navigate stores faster, do that price comparison for the biggest savings, and never have to leave the comfort of your home.
COLE: Yeah there’s lots of reasons why people are switching to shopping online. And this trend is very likely to continue and even less people will be in-store shopping next year. Here’s a fact that really shows the transition. This year, there was 70% more online shopping through smartphones than just last year. And business has to adapt to this, don’t you think?
NICKY: Yeah, definitely. There’s two things businesses can try to do in response to this trend. They can fight it and try to reverse it by advertising more and giving bigger sales in-store and not online. But the repercussions of this is it hurts profit. Why would a business try hard to get people to come in-store when they clearly want to go online and buy from them there?
COLE: There’s a lot of benefits for businesses to promote online shopping over store shopping. They don’t have to pay for employees to work odd hours and overtime, or for facility costs, and there is a lot of negative publicity around Black Friday and Thanksgiving in-store shopping. I’m sure you’ve heard about people getting violent in the whole frenzy of shopping, and theft goes up too.
NICKY: Also there’s a lot of backlash about being open on Thanksgiving. It is a holiday about being with family and being thankful for what you got after all. So we think that, sure, the trend is less people are going to shop in-store, but we think business is really going to make the push for online shopping. Especially on Thanksgiving.
COLE: And this is already happening. Lots of businesses have announced they wouldn’t open on Thanksgiving this year. This includes Costco, Barnes&Nobles, Nordstrom, Home Depot, BabiesRUS, Golf Galaxy, and REI.
NICKY: REI is an interesting one for sure. The others, they’ll likely looking at all the backlash and the fact that they don’t get much traffic on Thanksgiving anyway and said “hey, let’s close on Thanksgiving and say it’s for the families,” but many of them open the next day at 6 am. REI on the other hand, is the only big chain not open on Black Friday either.
COLE: There stated reason is because they wanted people to “#OptOutside” on Black Friday and post pictures of them enjoying the outdoors. This received a lot of attention and about a million endorsements on social media, so this good will on their part was also a very clever marketing scheme. Good will or not, it paid out.
NICKY: So to rap that up, there’s public scrutiny for retailers who are open on Thanksgiving and Black Friday and there’s profit to be made on online shopping anyway. So we see suppliers as very likely to go with the trend and put less effort into Black Friday brick-and-mortar shopping.
COLE: Don’t get us wrong, Black Friday is still the biggest retail sales day of the year. But its in-store shopping is trending down and going online. There will always be that core group of people who really love the tradition of Black Friday. Camping outside and shoving their way to discounts, probably with their friends and families, it’s just a fun social event for some.
NICKY: But for others, in-store shopping on Black Friday is clearly losing its luster and the convenience of online shopping is just too great. We don’t know how many people are hardcore Black Friday shoppers, and businesses are the one’s who’ll have to make this call and in the future we suspect retailers will put less effort into in-store shopping and promote online shopping.
COLE: So we leave with some questions. What kind of holiday is in-store Black Friday shopping? Will it die off, or will it stand the test of time, just like the turkey tradition of Thanksgiving. This has been Soundcast, I’m your host Cole Driscoll.
NICKY: And I’m Nicky Smit, see you after the holidays.