We’re in a period of rapidly changing shopping patterns, and it’s obvious, particularly post-Black Friday, that trends are just that: patterns on the move, rather than at an endpoint. As much as tech frontrunners believe that new will inexorably replace old—often with ample evidence of a transition in progress—there are multiple versions of “new,” and it’s already obvious that “newest” does not automatically win. One example is the (so far) lackluster performance of mobile payment systems like Apple Pay and Samsung Pay, as documented by Forbes after the holiday weekend. Nearly 90 percent of in-store payments were by credit or debit card. If you deduct cash payments, mobile apps came in at a paltry 0.6 percent across the country, despite all the hype and “the way it will be” talk from early adopters. Reasons cited are lack of consumer incentives, equipment incompatibility and security concerns. Sorry, Apple acolytes.
Shopping habits have some inertia, too, and those habits are shaped by more than technology. For example, witness the dramatic slowdown in online shopping for the period directly after the presidential election. (Although still growing, the expected 7.8-percent growth for the period came in at 1.3 percent. Increases from Black Friday/Cyber Monday brought the projection back into line, but my point is that outside events can also drive or depress sales.) I find it interesting to see some of the emerging patterns, particularly when we look at their effect on our own industry, especially on those of us in physical stores. After all, there are a lot of predictions that the storefront as we know it is doomed to oblivion.
I’m not worried, at least for the moment. Online shopping has become a major component of consumer behavior, but brick-and-mortar sales still account for the lion’s share of dollars. Plus, online shopping operates in multiple channels, and not all of them are divorced from the physical shopping experience. Business Wire reports that only 18 percent of the weekend’s sales went to “online only” retailers, with the rest of online shoppers buying from a multi- channel retailer, such as Best Buy, Target or Walmart. About 28 percent of those multichannel buyers opted to pick up their purchase in the physical store, and the majority of those (64 percent) used that store trip to buy more. To me, getting bodies into the store is the most important task.
Here are some additional stats that are interesting: Although brick-and-mortar sales decreased slightly, the drop was lower than expected, and the increase in online sales often went to the multichannel companies that operate physical stores, keeping those businesses stronger. Mobile was credited for about a third (36 percent) of online sales, but people browsed via mobile far more than the completed transactions (conversions) would indicate. That might mean a lot of the mobile activity was price checking. The biggest mobile activity actually came on Thanksgiving Day. Unfortunately, we can’t tell how much of that activity was driven by shoppers sitting at the dinner table waiting for pie.
For those of us in physical stores, then, the results are mixed, but, from my perspective, hopeful. JCPenney scored an impressive comeback in stores nationwide, with good traffic reported throughout the weekend. Most pundits attribute those results to a vastly improved shopping experience, coupled with a curated inventory focused on value for the dollar. Meanwhile, store traffic for Sears and Walmart was lackluster to embarrassing. Here, again, the decisive factor seems to be the perceived quality of the shopping experience.
I believe the takeaway is that people still want to shop in stores, but the quality of the experience (sales help, convenience, merchandising and inventory) is paramount. A good shopping experience can earn a loyal customer. People like to go to a place where they are well treated and where their needs are addressed. That is totally on trend for the “experiential” generation that we call millennials, and it’s almost nostalgic for boomers, who remember the golden age of department stores. They will get in their car and visit a store that cares about them, that is visually interesting and that sends them home with what they came for…and perhaps more.
So, our big task in our storefronts this year is to serve the customer by amping up (so to speak) our store environment. We need to freshen up our merchandising, get our contact people fully engaged with customers and put some real thought into inventory for perceived value, not just profitability. We’ve certainly improved over the last decade in those areas, but not enough.
Of course, we have to get people into the store to experience those improvements. We need to push our outreach, performances, local advertising, social media and all the usual promotional tactics. But, we’d also appreciate the help of our supplier partners. Many of the multichannel stores (Home Depot, Jo-Ann Stores and Best Buy, for example) displayed coupons and offers that were good in store only to help drive traffic. How about some strong brick-and-mortar-only products, deals and swag, supported by your own Web site and social media advertising? Some companies are making an effort in that direction, but, often, it’s only for dealers that can muster a multi-thousand-dollar buy in.
I will tell manufacturers only this: There are small stores, new stores, scrappy stores, which carry your products, that could become (or already are) loyal, ardent supporters of your brand. Often, they are the stores that are bringing new players into the fold, giving your brand a foot in the door from the beginning. I think that’s a win for you.
The Black Friday sales weekend showed us that all is not lost for brick and mortar if we do the work, and if we provide what customers want and need in a way that pleases them. I can already see, early in the season as I write this, that it isn’t primarily about price. It’s about convenience and, even more, about being appreciated and supported. We won’t get everyone, of course. But, if we do our job well, we won’t need everyone.
Black Fridays Of Yesteryear
Here’s a quick backstory on Black Friday. In its original concept (circa 1961), it was a description of the gridlocked traffic—both motor vehicle and pedestrian—from holiday shopping on the day after Thanksgiving. Over the next couple of decades, it morphed into the concept that Black Friday was “the day when retailers finally moved into the black” (profitability) for the year. It’s a romantic concept, not unlike “Tax Emancipation Day,” but also more of an effective metaphor than a fact. The term was not used as a marketing hook when I worked at Sears years ago; at that time, “Black Friday” sales were just “After Thanksgiving” sales. But, in those days, the actual promotions were tightly guarded secrets. I remember the Thanksgiving ad flyers sitting on pallets in Receiving, and the trouble someone could get into for sneaking a copy out of the store. There was no “bleed” into earlier weekends; there were no previews; and no one opened before 6am. Of course, there were no smartphones or Web sites for real-time analysis of the bargains, either.
Shoppers often hit the stores where they had charge accounts. (Yes, early on, the big retailers had their own cards and didn’t accept Visa, MasterCard or American Express.) Alternately, they would pull their Christmas Club money (ask your parents, post-Boomers) and get deals from their favorite stores, all of which had toy departments (pre-category killers, y’all), fashions, and “hard lines” like appliances, TVs and things called VCRs. Although you might have shopped Macy’s for fashion and Sears for appliances, it was all done in real time in meatspace. And, back then, it was fun, albeit strenuous.