Black Friday Actually Better Than Expected, Including eCommerce

From ClusterStock:

It wasn't anything to scream and yell about, but retail sales on Black Friday appear to have been better than expected, including eCommerce.

Retail sales jumped 3% year over year, according to one research firm (some have expected holiday sales to drop 10% year over year). eCommerce, meanwhile, which is down 4% versus last year so far, rose a surprising 1%. Sales today (Cyber Monday) will likely be the big bellwether for eCommerce.

AP: The holiday shopping season got off to a surprisingly solid start, according to data released Saturday by a research firm. But the sales boost during the post-Thanksgiving shopathon came at the expense of profits as the nation's retailers had to slash prices to attract the crowds in a season that is expected to be the weakest in decades.

Sales during the day after Thanksgiving rose 3 percent to $10.6 billion, according to preliminary figures released Saturday by ShopperTrak RCT Corp., a Chicago-based research firm that tracks sales at more than 50,000 retail outlets. Last year, shoppers spent about $10.3 billion on the day after Thanksgiving, dubbed Black Friday because it was historically the sales-packed day when retailers would become profitable for the year.

But this year, many observers were expecting consumers to spend more time browsing than buying, amid contractions in consumer spending and growing fears about economic uncertainty and trouble in the global financial markets.

"Under these circumstances, it's truly amazing when you think about all the news that led into the holiday season, it certainly appears that consumers are willing to spend more than most expected," said ShopperTrak co-founder Bill Martin. "Everybody wants value for their dollar, so we saw a tremendous response to the discounts."

While it isn't a predictor of overall holiday season sales, Black Friday is an important barometer of people's willingness to spend during the holidays. Last year, it was the biggest sales generator of the season while the Thanksgiving shopping weekend of Friday through Sunday accounted for about 10 percent of overall holiday sales.

Still, experts, who predict this year's overall holiday shopping period will be the weakest in decades thanks to an overall contraction in spending, caution that this year's sales growth may be hard to sustain.

Also complicating matters is a shorter buying season -- 27 days between Black Friday and Christmas -- instead of 32 last year.

eCommerce from comScore:

comScore... today reported its tracking of holiday season retail e-commerce spending for the first 28 days of the November – December 2008 holiday season. For the holiday season-to-date, $10.41 billion has been spent online, marking a 4-percent decline versus the corresponding days last year, while Black Friday saw $534 million in online spending, up 1 percent. For the combination of Thanksgiving Day and Black Friday, online sales were up 2 percent relative to last year.

*Corresponding days based on equivalent shopping days relative to Thanksgiving (October 27 thru November 23, 2007)

“Early reports suggest that Black Friday sales in retail stores were slightly better than anticipated in this depressed retail climate, and that performance apparently extended to the online channel, which saw sales on Thanksgiving Day and Black Friday combined increase 2 percent versus year ago,” said comScore chairman, Gian Fulgoni. “It’s probable that on Black Friday consumers responded positively to the very aggressive promotions and discounts being offered in retail stores, so it will be important to see how they respond to similarly attractive deals being offered online on Cyber Monday, the traditional kick-off to the online holiday shopping season."...

Cyber Monday Historical Bellwether for Overall Holiday Season Performance

The Monday after Thanksgiving, popularly known as “Cyber Monday,” represents the first significant spike in online spending activity for the holiday season. The phenomenon results from Cyber Monday being the first working day following the Thanksgiving holiday and the fact that purchases from work still account for approximately half of all e-commerce spending.

Interestingly, Cyber Monday has historically proved to be an accurate bellwether for the overall performance of the online holiday shopping season. While the year-over-year growth rates for individual online spending days vary quite significantly throughout the season, during the past few years Cyber Monday has been within a few percentage points of the final holiday season growth rate.

“With so much volatility right now in the variables that influence consumer spending, predicting where this online holiday season will end up has been far more challenging than in previous years,” added Fulgoni. “That said, Cyber Monday may well prove to be an important indicator of whether the decline in spending that we’ve seen during the first few weeks of the online holiday season will continue for the balance of the year.”

comScore 2008 Holiday Online Retail Spending Forecast

* Actual  **Forecast