Texas A&M Retail Expert Predicts Strong Holiday Spending Despite Black Friday’s Decline

Christmas shoppers look in to decorated store windows. (Dan Kitwood/Getty Images)

Christmas shoppers look in to decorated store windows. (Dan Kitwood/Getty Images)

By Kelli Hollinger, Texas A&M University Center for Retailing Studies

Overall spending

Early predictions from Deloitte indicate spending will be up in 2017. Sales increased by 3.6 percent in both 2015 and 2016. With a strong economy, job growth and the stock market at an all-time high, consumer confidence is positive. Holiday spending could top 4 percent.

Click and collect

However, sales will not benefit all retailers equally. eCommerce sales continue to grow at robust double-digit rates As a result, many brick-and-mortar retailers invested heavily in “click and collect” technologies this year to make it easier for customers to buy online with pickup at nearby store locations. Walmart now has 1,000-plus stores ready for curb-side pickup. Shoppers save time and avoid store crowds when their merchandise is brought to their vehicles.

By leveraging local store assortments, select retailers can offer same-day product collection, beating out even Amazon’s two-day Prime delivery promise. “Click and collect” is an important strategy for brick-and-mortar retailers to leverage their strengths – their proximity and physical convenience to customers in their communities – to compete with Amazon.

NEW YORK - NOVEMBER 25: Bargain hunters shop for discounted merchandise at Macy's on 'Black Friday' on November 25, 2011 in New York City. Marking the start of the holiday shopping season, 'Black Friday' is one of American retailers' busiest days of the year. (Photo by Michael Nagle/Getty Images)

Bargain hunters shop for discounted merchandise at Macy’s on ‘Black Friday’ in New York City. (Michael Nagle/Getty Images)

Black Friday’s decline

With more retailers offering robust online deals days before Thanksgiving and others seamlessly selling the same Black Friday door-busters online as what’s promoted in the store, consumers have less incentive to battle 4 a.m. mall crowds. RetailMeNot reported that, “Black Friday deal seeking now expands to a full week of promotions.” With retailers pushing deals on newly named big-spending days, like “Black Saturday” and “Cyber Sunday,” consumers can expect a week of intensive merchandise promotions.

Online momentum

Store traffic the day after Thanksgiving fell by 3 million shoppers last year. “Americans didn’t spend less, they just purchased differently via tablets, apps or smartphones and avoiding stores,” Hollinger said.

Furthermore, the drastic decline in newspaper subscriptions means that fewer families spend Thanksgiving pouring over ads to strategically plan Friday’s shopping spree.

“Consumers watch their social media feeds for deals and product recommendations from friends,” she said. “Savvy retailers will target mobile devices with frequent, relevant promotions that are more likely to convert to sales.”

Employees select and dispatch items in the huge Amazon 'fulfilment centre' warehouse on November 28, 2013. (Photo by Oli Scarff/Getty Images)

Employees select and dispatch items in the huge Amazon ‘fulfilment centre’ warehouse on November 28, 2013. (Photo by Oli Scarff/Getty Images)

In-store memory making

Despite 2017’s record-breaking number of retail bankruptcies, layoffs and store closings, the year is ending with traditional retailers committed to plans that energize the physical store space.

“You cannot go head-to-head with Amazon by selling just products in a store or on an app,” Hollinger said. “Instead, brick-and-mortar retailers have an opportunity to be better than Amazon by giving consumers a human connection and providing engaging experiences that fulfill our innate needs as social creatures.”

For example, PetSmart’s holiday offerings will include pictures with Santa, adoption promotions, PetsHotel Open Houses and Doggie Day Camps, which care for pooches when houses become full of human guests.

“These services identify PetSmart as the expert in pet care, not just products,” she said. “By building trust with pet parents through events and services, PetSmart is betting consumers will choose them when it’s time to purchase food and supplies.”

A 2015 Harris Poll reports that 64 percent of pet owners purchased their fur-baby a holiday present. Therefore, PetSmart also will likely stock a selection of gifts and stocking stuffers for Fido this year.

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Kelli Hollinger can be reached at khollinger@mays.tamu.edu or (979) 845-5898.

Media contact: Kelli Reynolds, Communications Specialist, Mays Business School, (979) 845-3167 or kreynolds@mays.tamu.edu.


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