U.S. Retailers Set Promotions For An Unusual Black Friday

COVID-19 has changed the in-store shopping experience in 2020, including the holiday season. Black Friday (Nov. 27 this year) – the day after the U.S. Thanksgiving Day holiday – has traditionally been one of the most critical retail sales days. It can even make or break fourth-quarter profits. Supposedly, it turns red ink into black on the ledgers, thus the name.

This year, however, consumers are gravitating online for safe, contactless, fast, and efficient shopping. Retailers also started offering earlier-than-usual discounts to attract shoppers, manage demand, and supply chains. This was reflected in the October retail sales results, which were primarily driven by strong online sales growth.

U.S. consumers are telling us that the online shopping trend looks permanent, Refinitiv discovered in a survey collaboration with Maru/Blue Public Opinion. This survey suggests that the majority of U.S. consumers (67%) plan to continue shopping online vs. at brick-and-mortar retailers, even if a vaccine becomes available and the economy returns to “normal.” Accordingly, in the first half of 2020, U.S. e-commerce sales jumped 29.6% YoY and are projected to grow even further to 43.6% YoY in the second half of the year, as per Refinitiv IFR.

Here are some highlights as we head into this year’s Black Friday season:

  • Over half of Americans plan to continue shopping online vs. bricks and mortar retail even if a vaccine becomes available and the economy returns to “normal.”
  • 61% of Americans intend to shop for Black Friday deals; 24% are certain, and the remaining 37% will be persuaded by the type of sale or circumstance.
  • However, the level of promotional discounting is pretty typical amongst U.S. retailers, even before the pandemic.
  • For the week ending November 21, the average promotional discount was 34.7%, compared with two months prior at 36.6%, Refinitiv discovered in a collaboration with StyleSage Co.
  • The frequency of promotional emails is changing. StyleSage Co. saw an increase since Amazon Prime week of 27%, and 31% from two months ago, in the number of emails being sent out.
  • The mid-tier department sector saw the biggest increase in discount penetration (how much of the assortment is on sale) 67% this year vs 63% in 2019.
  • At the category level, average discounts are up across apparel, footwear, and bags, with apparel leading in discounts, at 22% currently (versus 16% in 2019).
  • The higher discount levels for apparel and footwear bode well for shoppers, as Refinitiv discovered in its survey collaboration with Maru/Blue Public Opinion, that consumers are planning to buy mostly clothing, and accessories if on sale.
  • Consumers are telling us they plan to open up their wallets for clothing/accessories (50%), followed by electronics (35%) and gift cards (32%).
  • 64% of the survey respondents plan to spend less on Black Friday this year than they did last year, spending $479.61 on average.
  • Last year, 49% of the respondents shopped in-store on Black Friday 2019. This year, 74% of respondents will shop primarily online, an improvement from the 50% that shopped online last year.

What consumers are telling us

Many retailers are hoping that this year’s Black Friday/holiday promotions will help them back into the black. However, as another wave of COVID-19 looms, consumers have different plans for the 2020 holiday season. Refinitiv discovered this in a collaboration with Maru/Blue Public Opinion, a panel, and data service insight firm. The findings and detailed tables can be found here: https://www.marublue.com/american-polls.

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