Black Friday: Just an Appetizer for Walmart

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It’s late November and that means three things: ironic mustaches are reaching their peak, holiday decorations are (finally) becoming seasonally appropriate and retailers are jockeying to be the preferred Black Friday destination for deal-seeking shoppers. In recent years, that has meant opening earlier and extending Black Friday doorbusters into the weekend and beyond.

 

But do stores actually benefit by extending their Black Friday deals, or are they merely spreading out the week’s sales? To answer that question, we zeroed in on two key retailers, Target and Walmart. Our team analyzed millions of receipts from the past two Black Fridays, and followed each retailer’s share-of-wallet across key categories.

 

BlackFriday2015_TargetShareOfWallet2014@2xIn 2014, Target focused its attention on the week leading up to Black Friday, with 30-60% off select items all week. The main event was on Friday, when Target offered 10% off gift cards for the first time ever (Friday Only). As a result, Target increased its share-of-wallet during the week before Black Friday and on the day itself, but lost share during the following week when their deals ended.
Walmart did not change its hours of operation in 2014, and extended its Black Friday deals throughout the following week, gaining share during that time. Despite not having any special events in the week before Black Friday, Walmart saw share gains here as well.

 

BlackFriday2015_WalmartShareOfWallet2014@2xWhile Target was able to gain share by bringing savings to the consumer first and offering discounted gift cards, it paid for it in the following week when Walmart’s promotions were just getting started. Target shoppers seemed to recognize when the deals had moved on, and many of them moved on with them. Walmart’s strategy of extending its promotion into December seems to flow more naturally into the rest of the Holiday shopping season, allowing the retailer to avoid any painful dips in sales.

 

So, does it pay to extend Black Friday deals? That all depends on whether you view the shopping holiday as dessert, or just an appetizer.

 

About the Data:
InfoScout collected data from over 2,000,000 receipts for this article, submitted by regular Target and Walmart shoppers. For this analysis, regular shoppers are defined by having visited a retailer at least once during October, November, and December of a given year. Share-of-wallet comparisons view 2014’s regular Target and Walmart shoppers’ % of total dollars spent against the previous year’s regular Target and Walmart shoppers’ % of total dollars spent.

Retailers Face Heavy Deflationary Headwinds this Holiday Season

Powered by over 170,000 consumer panelists, InfoScout’s real-time read on Thanksgiving Day and Black Friday sales indicates that early reports of a strong holiday shopping season for America’s major retailers may be inflated.

With consumer electronics dominating the list of best sellers at Walmart, Target, Best Buy and even Kohl’s, these retailers now find themselves exposed to the deflationary pressures of the gadget industry.   Last year, consumers were exposed to exciting new products, and shoppers swarmed in to seize the new must-haves like the iPad Air, Beats Headphones, PlayStation 4, and Xbox One.  As an industry that relies on innovation, the relative lack thereof in 2014  has left American shoppers unwilling to spend more for only minimally improved versions of their favorite products.  With their top-selling items now on-shelf at reduced prices, retailers will need to sell many more units than last year to keep pace with sales from the 2013 holiday season.

The list of best selling products in each of Walmart’s top holiday categories is remarkably unchanged, with slightly better offerings at predominantly lower prices.

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Target carries a similar assortment of products to Walmart and therefore faces similar deflationary headwinds this holiday season.   Sales of iPads had accounted for such a large percentage of Target’s holiday sales in 2013, that the retailer will have to steer shoppers towards other products in 2014 in order to overcome the large year-over-year price reductions.

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Even the highly innovative Amazon has struggled to improve upon its Kindle Fire offering from last year.   In fact, consumers are trading down this year from 7-inch to a 6-inch display at a much lower price point.

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It should be no surprise then that average basket values appear to be down across almost every major retailer compared to the year prior.  Early data coming in from InfoScout’s panelists’ shopping in stores on Black Thursday & Black Friday indicate that only Macy’s has managed even the slightest gain in their average transaction.  While this data is just a preliminary read, it is derived from more than 42,000 shopping trips reported thus far at the retailers below.

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To stay on top of America’s shopper journey throughout this retail holiday season, be sure to subscribe (above) for real-time updates.

(Author’s note:  Special thanks to Ben Ahn & Bret Weinberg for their real-time reporting.)

 

First Read on Black Thursday’s Top Sellers

With many stores opening for business before most of us could even finish our plate of Thanksgiving turkey, the unofficial start to the holiday shopping season is officially underway… a lot earlier this year. With retailers no longer waiting until the traditional Black Friday to begin their doorbuster sales, Black Thursday (also dubbed “Grey Thursday”) is inarguably becoming the new norm among retailers anxious to draw customers in early. Shoppers flooded the aisles of Walmart at 6PM on the dot to get their hands on some of the hottest deals, and this data is coming in hot here at InfoScout’s San Francisco headquarters. Here’s a very early look at three major retailers’ top selling items on Black Thursday:

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Methodology:
Data collected from the first 5,000 Walmart receipts, 1,000 Target receipts, and 300 Amazon receipts submitted by InfoScout Panelists on ‘Black Thursday’ (Thanksgiving Day).