Black Friday is in full swing! For the second half of this broadcast, I'll be live from Best Buy.
We know that consumers plan on spending big this season - but how exactly will they be receiving their purchases? There are now more options than ever, including in-store pickup, “skip the line,” curbside, drive-up and 2-day delivery. This is giving customers more convenient options, but what’s the financial impact to retailers?
According to a recent JLL survey, male shoppers will be making a big splash this holiday season. Roughly 30 percent of men said they plan to spend more than 750 dollars during November and December, while only about 25 percent of women said the same.
What’s behind this new trend? There are a couple reasons, according to CNBC.
First, electronics, which are often at the top of men’s wish lists, tend to be the most steeply discounted items on Black Friday and Cyber Monday. Many are thinking - why wait for the Super Bowl sales when you can get a great deal right now?
Secondly, 2018 has been a huge year for male-centric e-commerce stores. Brands like Bonobos, Untuckit, Chubbies, and Rhone have offered men a wider and more appealing assortment of merchandise compared traditional retailers.
While men’s brands are on the rise, one iconic female brand is on the decline. Shares of L Brands, whose main businesses are Victoria’s Secret and Bath & Body Works, are down 41% this year.
Victoria’s Secret’s rough year was marked with slowing sales and the departure of CEO Jan Singer. Even the store’s semiannual sale - a major event in years past - was so weak that the retailer was forced to extend it by two weeks and offer steeper discounts. Leading analysts have declared the brand “broken”
So what’s behind the decline of Victoria’s Secret? According the Wall Street Journal, women are looking for a different kind of underwear and a different set of values. They’re prioritizing their own comfort and turning to online lingerie startups like ThirdLove and Lively.
Bottom line? The over-the-top sexy image that built Victoria’s Secret no longer flies in 2018.
This year, analysts will be watching not only what consumers are buying, but how they pick up their purchases. Retailers are offering more delivery options than ever: Customers can pick up items in a local store or have them delivered to their car in the parking lot. They can reserve clothing online and have it waiting in a fitting room to try on. Or they can take advantage of an expanding menu of free shipping choices, some with guaranteed next-day delivery in a direct challenge to Amazon.
Macy’s says shoppers who pick up online orders in stores spend an additional 25% while they’re there. Shipping online orders from stores rather than from a distribution center saves money, Target says, because the stores are closer to people’s homes. And Walmart says the fulfillment options have helped it compete with online rivals, which have fewer such choices.
Nordstrom has introduced “Get It Fast” to the Los Angeles area, offering free next-day delivery for orders placed by noon. The chain says there has been a 50% increase in shoppers who buy online and pick up in store in the Los Angeles area since it launched the service in October.
As we’ve seen in other aspects of retail, there’s a revival of the brick-and-mortar shopping experience, even if it’s just curbside.
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Okay, so I’m in the car heading to Best Buy, where I spent almost a decade doing every job from working behind the register to running credit card applications for past Black Fridays.
Best Buy’s story has been a wild ride. Just a few short years ago, they were expected to go out of business… like many other countless consumer electronic retailers. The reason was cited to be the Amazon show-rooming effect, where customers would visit Best Buy stores and then buy online with 2-day shipping and a lower price.
Then, Hubert Joly took over in Best Buy’s chief role. With his Renew Blue transformation plan, the company’s stock tripled in 2013 with a focus on… big box stores, superior customer service, product selection and services like Geek Squad. In a world where brick and mortar was going out of business, Best Buy was defying the odds.
The top goal though, was matching the lowest price. Price-competitiveness was table stakes combined with advice, convenience, and service.
This year, Black Friday spending soared to $23 billion, according to an estimate from Mastercard. That’s up 9% from last year.
The bigger story though? Much of the growth came from online purchases, which rose an eye-popping 24% over last year, to a record high of $6.22 billion, according to Adobe Analytics.
The big winners of the season were mostly pillows, iPads, and TVs, according to data firm Numerator after looking at over 50,000 receipts.
But not everyone is shopping on Black Friday. I met Regina Robinson, the owner of a drapery business in Tennessee in the Best Buy parking lot after the Black Friday madness.
“Black Friday is not my favorite holiday. I do not like the business of the shopping. I prefer to do most of my Christmas shopping online.”
One retailer that agrees is REI. For the fourth year in a row, the outdoor clothing and equipment store is paid its 12,000 employees to take the day off and spend Black Friday outside.
“I went hiking in Big South Fork. It’s a big state park with about 6 friends. We hiked about 8 miles and listened to the rustling of the leaves and went to a waterfall. Went to a little cave, and just enjoyed the beautiful weather.”
REI tweeted, “There are things more important than buying/selling tents - like going outside and actually using them!”