All About America

Here’s How Much Online Sales Have Cut Into Black Friday

By Dora Mekouar
November 28, 2019 08:59 PM

The Friday after Thanksgiving is traditionally one of the biggest shopping days of the year. Black Friday is viewed as the start of the holiday shopping season, a time when U.S. retailers rake in a significant portion of the year’s profits.

Many stores offer deep discounts to attract customers, and shoppers often line up early for a chance to grab a great deal before supplies run out.

“I think it is a very good sales gimmick,” says James E. Schrager, professor of entrepreneurship and strategy at the University of Chicago Booth School of Business. “And what’s been happening for a few decades now is that retailers are very worried about when they get the customer into their store for this huge seasonal buying season. And they know it comes and goes very quickly ... so this is a very good idea, so that they make sure they get their time — that is, the customer's time — in their store to show off what they have.”

File -- A traffic jam of Black Friday shoppers in the aisles of a toy store in San Rafael, California.
File -- A traffic jam of Black Friday shoppers in the aisles of a toy store in San Rafael, California.

Macy’s, the department store, is believed to be the first retailer to advertise after-Thanksgiving Day shopping during their Thanksgiving Day Parade in New York in 1924. Black Friday shopping grew more popular in the 1930s.

“Black Friday was a way to make sure that, for the season, they would make their number,” Schrager says. “ 'Make their number,' in the retail business, means sell more than you did last year. So every retailer loves to grow. Every retailer wants to get bigger and have better market share than it had the year before.”

Legos, cameras and a high-end backpack were among the hot online searches going into Black Friday 2019, according to Google, the online search engine. But where people will actually shop on the day after Thanksgiving isn’t clear.

“I can't speak necessarily specifically to that because, of course, you don't necessarily know what any one person is doing,” says Molly VandenBerg, a Google trends expert. “When we look at search behavior, people do certainly come to Google to search for things like where to buy a particular item."

File --Customer uses his phone as a shopping tool during Black Friday at Walmart in Bentonville, Arkansas, Nov. 24, 2016.
Customer uses his phone as a shopping tool during Black Friday at Walmart in Bentonville, Arkansas, Nov. 24, 2016.

Schrager says online shopping hasn’t diminished Black Friday’s significance to the nation’s brick-and-mortar retailers.

“I think it's more important than ever,” he says. “Online retailing is new, it’s new and it’s newsy. But if you look at the numbers ... 89 percent of everything bought new is sold in regular stores.”

Online sales accounted for just 11.2 percent of total sales in the third quarter of 2019 — the months of April, May and June — according to the U.S. Department of Commerce. Over the past 10 years, there’s been a little under 1 percent growth per year in online retailing.

Online shopping sales are expected to grow 18% this year, according to a recent Deloitte holiday retail survey.

The same survey finds that nearly two-thirds of shoppers plan to look online for gift inspiration. However, more than half of the consumers surveyed still plan to head into the store to see and touch a product before purchasing it.

File -- Hundreds of shoppers line up for Black Friday deals at Best Buy in Mayfield Heights, Ohio.
File -- Hundreds of shoppers line up for Black Friday deals at Best Buy in Mayfield Heights, Ohio.

But there are other ways to incorporate technology into the holiday shopping season.

“If you're heading out into the stores, you might want to know how crowded they're expected to be before you get there,” says VandenBerg, the Google trends expert. "And you can do this with the 'Popular Times' feature. If you're looking at a particular store, or even like a grocery shop, you would be able to see an estimate of how busy we anticipate it would be, or how long you might wait.”

Related Stories

Crowds walk past a large store sign displaying a Black Friday discount in midtown Manhattan, Nov. 23, 2018, in New York.
USA
It would have been easy to turn on their computers at home over plates of leftover turkey and take advantage of the Black Friday deals most retailers now offer online.      But across the country, thousands of shoppers flocked to stores on Thanksgiving or woke up before dawn the next day to take part in this most famous ritual of American consumerism.    Shoppers spent their holiday lined up outside the Mall of America in…
Millions of Americans serve turkey as the centerpiece of their Thanksgiving dinner.
Facing criticism about presidential powers, the nation’s first leader came up with a clever solution to silence his critics
Default Author Profile
Tue, 11/26/2019 - 13:42
Photo by: STRF/STAR MAX/IPx10/3/16Jaime King is seen in Los Angeles, CA.
Emerging underclass of low-skill workers provides services like massages and manicures to the more affluent
Default Author Profile
Fri, 11/08/2019 - 15:35
Suburban house
Size of the average American home has more than doubled since the 1950s
Default Author Profile
Wed, 11/06/2019 - 14:52
Default Author Profile
Written By