This year’s Black Friday shopping spree brought in an estimated $13 billion. That’s a nice chunk of change, but it’s still a disappointment for the retail industry. It’s a decline from last year’s figures and it represents the latest in a multi-year trend of unpredictable shopping patterns.
But does that mean your business has to miss out? Let’s take a look at what changed this year and what you can do about it.
Not the Trend You’re Expecting
The quick explanation most pundits give for the decline is a shift to online shopping. The theory is that store sales are down because more dollars are being spent with online retailers instead. But on examination, this story doesn’t exactly hold up.
It is true that online sales increased this year while store sales dropped. In fact, online sales are up 14 percent from last year, with a total of $2.72 billion. That’s impressive.
But it doesn’t begin to make up for the decline of in-store activity. Those dropped from $11.6 billion to $10.4 billion this year. That dwarfs cyberspace’s take. In fact, the combined online/offline sales for 2015 clock in at just $13.1 billion — a billion less than 2014.
Clearly, something deeper is going on.
Trusting the Numbers
The first question to ask is whether the numbers tell the whole story. Bell Casselman at FiveThirtyEight gives a well-considered warning that Black Friday numbers are useless and wrong. He means not only the back-of-the-envelope guesses that came out Friday night, but also the “official” figures that showed up by the end of the weekend. In his view, these numbers don’t take the pulse of holiday shopping at all — they’re smoke and mirrors.
- The National Retail Federation’s projections (based on Black Friday spending) were totally wrong last year
- People spend more on other days, with increased last-minute sales before December 25
Casselman’s message is that retailers cannot expect a slow holiday season because of what happened the day after Thanksgiving. Instead, they should expect shopping to be more spread out with a spike before the big day, and potentially an overall increase in sales.
How to Maximize Your Holiday Sales
So what can your business do to keep sales up? I see three things:
- Stayed focused on online marketing. While digital didn’t save Black Friday, it’s notable that online sales have consistently increased. You may not see a 1:1 move of sales from the store to the website, but you will see growth in this area. Do everything you can to make it easy for customers to buy from you online. That includes local SEO, online advertising, a mobile-friendly site and a good user experience.
- Space out your deals. Black Friday is immensely profitable but it’s not the event it once was. For online sales, use a Cyber Monday special that’s more like a cyber week —
from Thanksgiving night through Tuesday. For in-store sales, create a “last minute” special that cannot be ignored. Starting on the 23rd, consider yourself back in Black Friday mode.
- Start earlier. The thing about online shopping is you don’t have to wait for stores to change their inventory, so people may not even wait for Thanksgiving to get started. Roll out “pre-holiday” specials. (That doesn’t mean you have to mix your jingle bells with your pumpkins. Emphasize specials that get shopping done “ahead of the crowds” and save the Santa hats for the traditional season.)