Thanksgiving has been wrapped up in retail since 1939, when canny department store legend, Fred Lazarus Jr, lobbied President Roosevelt to give the celebration a fixed date in November so the Christmas shopping period could commence unhindered.
66 years later, online retail showed up to the party when trade group, The National Retail Federation, added ‘Cyber Monday‘ to the holiday calendar in 2005. Encouraging online retailers to adopt radical discounting, the aim was to jump start holiday spend once people were back at their desks after the long weekend. For the past three years, Cyber Monday has been the biggest shopping day of the year for online retail and this year is expected to rake in $1.5 billion from Americans alone.
With access to broadband no longer limited to office-time, Cyber Monday has been joined by Black Friday, Small Business Saturday and Mobile Tuesday as the manic discounting spreads and this year stores were heavily criticised for opening on Thanksgiving itself. Has the stretch of ‘door-busting’ deals come from consumer demand or is the recent backlash a warning sign that the holiday hype needs reigning in? With the average American holiday spend down 4.7% we decided to dig into data to find out what consumers want and whether the flashy red slogans are really working.
Astonishingly, the number of online mentions of Black Friday this year has fallen 30% from 2011 and the sentiment attached to the way people are talking about it is also down. Sentiment towards Cyber Monday has barely changed, but number of online mentions is down by a staggering 48%. Do consumers not care about a bargain, or are sales kicking off earlier than ever? Exactly how early are the sales starting?
Aeropostale seem to be one of the first out of the starting blocks, sending out an email newsletter on the 2nd November announcing an ‘early Black Friday’ with ‘Everything up to 70% off’. That’s some pretty eager discounting – and looking at our commercial database, we can see that 72% of Aeropostale’s online offering was given a discount of more than 25%. Did consumers lap up the dramatic price slashes? Dig even deeper and we see that Aerostaple’s fastest selling garment recently is a pair of navy sweatpants which saw a 28% discount to sell out at $10. A bargain, absolutely, but not one of the company’s boasted 70% discounts and perhaps a tepid response to the 27 sale promotion emails they’ve sent out this month. With the online world so often a mirror of offline, it’s also been noted that Aeropostale’s foot traffic over the weekend was down and shares in the company have been demoted from ‘buy’ status, to ‘neutral’.
Other early birds include Macy’s whose “Biggest one day sale of the year” swerved competition being scheduled for the 10th November, with a 9th November preview. Their ‘lowest prices of the season’ worked out at 38% of their online offering being discounted more than 25%. Abercrombie & Fitch saw a more modest level of discounting, with 20% of their online offering being discounted 25% or more, and being called “the clear winner” by Oppenheimer analysts in terms of queue length and units per transaction. Their trick? No sales newsletters, no garish homepage update. The result? Their best-selling garment over the weekend was the full-priced $68 Neve Sweater, which sold out of all 4 sizes. Abercrombie don’t cheapen the brand image that their customers want to buy into.
Plus-size retailer, Lane Bryant got in early, with a 10th November email promoting a flash sale. Their fastest sell out was actually a full priced, $39.99 colour block skirt selling out six sizes in 14 days, despite 14% off the online offering having a 25%+ discount applied to it.
Same story for Nordstrom (15% of online collection seeing discounting of 25% or more and fastest seller being a full-priced Junior’s chiffon blouse) and UK based John Lewis, who saw a £105 spend per second on Black Friday. John Lewis’s fastest sell-through was a full-priced £119 Ted Baker dress, clearing 5 sizes in 2 days.
So it appears the savviest retailers are applying their large discounts to 10-20% of their offering, enticing customers to their sites without bombarding them, and winning with full-priced sells on valuable stock.
Hopefully retailers will pay attention to the consumer backlash. Customers want to buy product still, they just don’t need discounts screaming at them every time they refresh their inbox. What they want is the right product at a fair price – not wasteful lines at rock bottom prices. Now, that would be something to be thankful for!