The battle for Thanksgiving online shoppers is well under way, with early data suggesting that it is off to a positive start.
Between midnight and 5pm US Eastern Time, online sales increased 13.6 per cent to $1.15bn, compared with 2015, according to Adobe Digital Index, which tracks 80 per cent of online sales of the top 100 retailers. It said this figure meant sales via ecommerce for the day before the Black Friday shopping bonanza should come close to its estimated $2bn — a record.
However, it added that heavy discounting compared with last year, particularly for televisions, toys and petcare items had “slowed revenue growth”, while a record $449m orders were sent from mobile devices, nearly 60 per cent higher than last year.
Thanksgiving weekend through to Cyber Monday is crucial for retailers across the country, both in-store and online. It is the busiest commerce period of the year, even though consumers are increasingly stretching their gift shopping over the whole of November and December.
“We are bullish on Amazon as we think they are the retailer best positioned to capture outsized market share in the 2016 holiday season,” wrote Morgan Stanley analysts in a note to investors.
“As with any retailer, traffic matters, and Amazon has added more new mobile app users than any other retailer over the past 12 months, and now has 2.7 times more mobile app users than the nearest retailer.”
Amazon will need to ensure it is converting those app visitors into buyers. Even though mobile will probably overtake desktop in visits this holiday season, sales on mobile devices are not as high, Adobe predicts.
When it comes to the share of shoppers, Conlumino, a retail information specialist, estimates that Amazon will gain 11.3 percentage points to 59.6 per cent of those hitting the web or stores this holiday season. Walmart remains in the lead with 69.8 per cent, though the gap is closing.
Walmart has made ecommerce a clear focus this year. The world’s largest retailer by sales has doubled the amount of products it offers online this year to 23m, compared with the holiday season last year, as well as starting online offers earlier. In line with this larger assortment, it now has 10 “mega” fulfilment centres to handle online orders compared with five last year.
It has made several improvements to its website, using technology and big data to make gift suggestions to visitors and has improved the speed that pages load on its website by one-third.
Both in-store and online it has made clear that it will be competing on price. Analysts at Jefferies estimate that Walmart has increased its level of discounting the most this year, raising it 4 per cent year-on-year, with some of the biggest discounts on televisions and toys.
“Overall, it seems that Walmart is making larger Black Friday investment this year,” Jefferies said, adding that the retailer is its “favourite name” for the season. “With recent price checks suggesting that Walmart may have eased up on price investment since the summer, our analysis suggests that Walmart will be more active on price for the holidays.”
The National Federation of Retailers is predicting a slight rise in the number of shoppers hitting stores, websites and apps over the long weekend to 59 per cent, or 137.4m Americans, from 58.7 per cent last year. Its survey estimated that 55.7 per cent of shoppers have already started gift shopping.
In downtown Chicago, by late afternoon queues were forming outside Macy’s and Target, though one shopper remarked that it did not feel as busy as last year.
Dolly Stackhouse, who was queuing to buy some winter boots on sale in Macy’s, highlighted how shoppers are shifting online but there are certain items that just need to be bought in-store.
”I normally shop online, but with boots I wanted to see how they looked and felt. I also wanted to get outside for some air,” she said. She said that she did not feel that the economy had either improved or deteriorated since last year, but that she would be spending less as there were fewer people for her to buy for this year.
While Black Friday remains a crucial shopping day, Conlumino figures highlight how its importance is waning as shopping spreads across a longer period. It expects a 1.9 per cent increase in sales on the day, the second slowest rise in seven years.
For the whole holiday period of November and December, the NRF expects a 3.6 per cent rise in sales to $665.9bn.
Whether these gains occur depends not only on how attractive the discounts are, but also weather forecasts for the coming weeks, and whether consumer sentiment has been affected by the recent presidential election.
Jason Lee, queuing outside Target to upgrade his iPhone as the company was offering $250 in-store purchases along with it, said that he was not confident about the economic outlook in the US with Donald Trump in charge.
“He doesn’t have any experience,” Mr Lee said. “This doesn’t mean that I’ll spend less, but I’m going to be mindful about what I spend on.”
While the weather has been unseasonably warm in the lead-up to the holiday season, Morgan Stanley notes that forecasts for a colder winter this year compared with last could help sales.