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Long considered the biggest shopping day of the year, Black Friday brings to mind hordes of shoppers flooding brick-and-mortar stores and shopping malls the day after Thanksgiving. The year 2020 made a lasting impact on retail, leaving stores and shopping malls alike destered. But if you think relaxed pandemic restrictions might have kicked up the pace of holiday shopping, you’re mistaken.
According to preliminary data from Sensormatic Solutions, fewer consumers were found trailing behind a crowded line at Macy’s this year. Shopper traffic data indicated that visits to retail stores on Black Friday dropped to 28.3% compared to pre-pandemic levels in 2019.
“It’s clear shoppers are shopping earlier this season, just as they did last season,” shares Brian Field, the senior director of global retail at Sensormatic Solutions. He enlists ongoing concerns about COVID-19 and supply chain woes as the two main reasons shoppers are spreading out their holiday purchases.
While the supply chain isn’t the only culprit behind these drops in Black Friday and Cyber Monday sales, out-of-stock messages on retailer websites were up 124%, compared with pre-pandemic levels. Appliances, electronics, house supplies, as well as home and garden items were among the largest stocked-out products.
Data from Sensormatic further indicates that visits to brick-and-mortar stores dropped by 90.4% from pre-pandemic levels back in 2019. This year, major retailers like Target, Walmart, and Best Buy kept their doors closed to customers on Black Friday. Target stated this would be a permanent shift for the company.
Meanwhile, growth in Black Friday spending stagnated and reversed sales from $9 billion in 2020 to $8.9 billion per Adobe Analytics. While this might seem like a large shift, it’s important to note that consumers spent $5.1 billion on the internet on Thanksgiving day alone, and $10.7 billion on Cyber Monday 2021 (down by 1.4% from last year).
According to data from the National Retail Federation, 61% of consumers had already started purchasing holiday gifts before Thanksgiving, some even beginning as early as October.
Vivek Pandya, a lead analyst at Adobe Digital Insights recently told CNBC: “Shoppers are being strategic in their gift shopping, buying much earlier in the season and being flexible about when they shop to make sure they get the best deals.”
Though Black Friday deals didn’t impress buying customers as much this year, consumers have already spent $108.8 billion online, growing at 11.9% over the last year — a new milestone.
“[Supply chain challenges and product availability] spread out e-commerce spending across the months of October and November, putting us on track for a season that will still break online shopping records,” says Taylor Schreiner, the director of Adobe Digital Insights.
It’s no surprise that the pandemic has altered spending patterns — as more people are spending time indoors, we’re seeing a shift in their priorities. E-commerce has evolved to become a more ubiquitous day-to-day activity, and is predicted to hit $207 bullion by the end of the year, reaching a record year-over-year growth.
Yet, the questions remain: How effective are Black Friday ads and Cyber Monday ads? How can retailers best adapt to these new spending patterns?
As the fastest-growing gift-based ecommerce platform, our patented Send with SmartGift technology helps retailers and brands become more people-centric as they approach marketing and personalization. Our gifting experiences leverage AI and real-time gifting data to help retailers tailor the gifting experience to sender and recipient preferences. Overall, SmartGift helps shoppers give the perfect, personalized gift, every time.
We also believe it’s important for both large and small retailers to embrace the capabilities that empower gift givers — whether it’s used to boost their best Black Friday deals, best Cyber Monday deals, or holiday specials.
First, let’s take a look at four ways retailers can gain momentum on all peak occasions in the calendar.
“With early deals in October, consumers were not waiting around for discounts on big shopping days like Cyber Monday and Black Friday,” shares Schriner from Adobe Digital Insights. To make the most of retail trends, it’s important that retailers share the same perspective as their shoppers.
According to the NPD Group’s annual holiday survey, more than four in 10 American consumers said they had already purchased holiday gifts by October this year, and over half of the respondents said they planned to shop before Thanksgiving Day.
With the majority of consumers getting their shopping done early to avoid the holiday rush, it’s imperative for retailers to similarly opt for an “early push” to better align themselves with trends of early gifting.
When consumers use SmartGift, they can immediately activate a digital, on-demand shopping experience at their desired start point or date. Shoppers simply click the “Send with SmartGift'' button on the product page for the item they are looking to send, to start gifting seamlessly.
In the guided steps, they can select their occasion like Christmas, birthday, anniversary, or more and write a gift message — which provides the retailer a breakdown of what are their most frequented gifting celebrations and how these special moments factor into overall spend. Plus, SmartGift offers add-ons to our traditional experience like the gift scheduling feature that allows for the gift link to be sent at a specific time and date by our service.
Our retail partners also have access to dashboards and customized reports in our Gift Genome® that show unique insights and relevant analytics such as user demographics, frequently gifted products, and the percentage of gift customizations, so they can better understand their consumers’ behavior and gifting trends throughout the year.
2021 saw a large number of shoppers taking advantage of Black Friday online deals by “bracketing” their purchases — buying the same item online in several sizes and colors, and returning the rest (if not all) back through free returns. This year alone, an astounding 58% of shoppers reported bracketing.
This practice creates a logistical and financial nightmare for retailers, who already shoulder heavy overhead costs, not to mention the terrible side effects for the environment from shipping returns and exchanges.
At SmartGift, we innately understand purchase inhibition, and the importance of getting your gift of choice in your preferred size, color, or any other specific attribute that is important to the sender or recipient. This is why we give recipients the power of choice by allowing them to confirm their preferred item, size, color, delivery address, or any attribute specific to a retailer’s offerings before their gift item ships.
Whether customers are shopping early Black Friday deals for Christmas gifts, we take the hassle out of getting it right the first time by also letting recipients swap for similarly priced items from a retailer’s catalog. Through our price algorithm, we can allow recipients to choose another same priced item, slightly higher priced item, or an item at a lower price point. Our unique swap experience allows retailers to achieve their goals, such as eliminating returns or enabling upsells, while recipients and senders have a positive gift interaction.
Eliminating gift returns not only reduces overhead costs for the retailers, but it also eliminates the excess associated with them, dramatically reducing their brand’s emission footprint at every point in the supply chain.
According to the NPD Group’s annual holiday survey, consumers have been shopping in the “here and now” mode more than ever more. Due to inventory concerns and agile consumer needs, we are seeing an increase in online purchasing where the average selling price trends higher than years past. This year, 85% of U.S. consumers will be shopping online, and 49% have committed to shop online so they can ship gifts directly to friends and family.
With a 28% drop in post-pandemic physical store shopping, and record-breaking online sales figures, shoppers have made their choice clear. They would rather shop virtually than during peak Black Friday store hours. It’s time to meet consumers where they are — online.
SmartGift is here to help you expand your brand’s online offerings by making the journey from gift selection to checkout to delivery simple and entertaining for all. Each gifting experience is designed to be an extension of your website and brand — whether they’re doing their Black Friday shopping, or any kind of gifting — so that buyers have an easy, frictionless path to purchase when they shop online.
It’s no secret that COVID-19 has altered consumer spending patterns — shoppers are now spending more money throughout the year instead of scoping out Black Friday specials. This is due to a number of reasons: pandemic concerns, supply chain issues, better prices available earlier, and consumers discovering that Black Friday advertising is often inflated.
As online shopping boomed over the course of the pandemic, the “buy now, pay later” payment method has increased in popularity. According to a CNBC/ Momentive Small Business Survey, approximately 7% of shoppers said they’ll be using the credit card alternative for their holiday purchases this year.
With shoppers looking to spend year round, it’s time to engage those looking to send gifts for evergreen and seasonal occasions, instead of relegating special deals and discounts to peak shopping season holidays like Black Friday or Cyber Monday.
Additionally, SmartGift has partnered with Klarna to allow shoppers to buy and send gifts instantly from any Klarna merchant and pay for them in four interest-free payments.
Together, let’s add tools to your website and brand that will help open up gifting funnels and spending potential for the whole year.
SmartGift’s Holiday Merchant Series aims to assist retailers with top gifting problems like high return rates, unsustainable practices, and non-engaging gift funnels by expanding their virtual capabilities.