Some Black Friday Data Points

Jeff  Carter
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Posted: Nov 27, 2011 12:40 AM

Perusing the published statistics from Black Friday:

Online sales were up 20%. America is getting more comfortable with shopping online and having things delivered. Maybe it’s because we are so fat now. 17% of all online shoppers came from mobile devices. Heck, here is even a website devoted to publishing current sales.

The brick and mortar stores opened even earlier than ever. Some even on the evening of Thanksgiving. How long before they just stay open 24/7? Even though I think it’s nuts to wait in line at a store to spend money, it doesn’t matter. Crowds of shoppers hit the stores. There is some statistical evidence it benefits the business,

The National Retail Federation said Friday morning that the earlier opening appears to have benefitted both consumers and merchants, based on preliminary data.

“Early morning openings appear to have been well worth it for both retailers and holiday shoppers, with many Americans believing that deals were too good to pass up regardless of who they were shopping for — themselves or others,” said Matthew Shay, the federation’s president and chief executive.

This whole push/pull between stores and the internet is an interesting phenomena to watch. It kind of reminds me of the push/pull between electronic trading and open outcry pit trading. In the 1990's, the CBOT answer to round the clock trading was to schedule night Bond sessions ($ZB_F). Guys would come in and trade a few hours in the evening. The idea was to keep volume that might be traded overseas here in Chicago. Of course, eventually electronic trading killed all the futures pits.

But it seems like retail stores are following the same path, stay open longer to fight online sales. It takes less manpower and costs less to man a website. The store is always on, similar to GLOBEX vs an open outcry exchange. How soon before you can get a computerized shopping program that surfs the entire internet for you to find the cheapest price? High Frequency Shopping programs!

It’s way too soon to measure how retailers did. However, that was the question posed yesterday on all the business channels. How were the margins? It’s a tough question to answer. Much of making money in retail isn’t the margin difference in the price you buy the good at and the price you sell the good at. So much of the profitability is in the operations of the business. Walmart($WMT) has always been tremendous at logistics and operations, controlling inventory and executing. That’s a key component of their profit margin. Impossible to know that after the first selling day of the holiday season. One analyst opines,

“It seems like a lot of teenagers were the primary shoppers, maybe because of the hour, but I think net-net it’s not really going to result in an incremental positive for retailers,” Ed Yruma, senior equity analyst at KeyBanc Capital Markets, said after checking out crowds at the Mall of America in Bloomington, Minnesota. He said shoppers were not carrying a lot of shopping bags.

Another relatively new phenomena is Small Business Saturday. I remember one Christmas when I lived in Geneva, Illinois. All I did was walk down Third Street and do my Christmas shopping. It wasn’t a conscious effort to “shop local”. I shopped there because the local retailers were pretty sharp and had the best stuff. Local boutiques have always had a hard time competing against the big chains. But good boutiques know how to survive. They are finding their goods through new and unique ways. Trends always start here, so even today I find myself trying to hit a lot of smaller merchants to find cool stuff. Especially when it comes to food!

It looks like people spent money yesterday. It also looks like retailers were prepared, and had their inventory measured correctly unlike 2008. All in all, my guess is spending is up slightly, and the retailers made a little money. Nothing great, but not bad.