Is Black Friday Still Relevant For Brick-And-Mortar Retail?
Black Friday, the infamous U.S. shopping holiday known for bad behavior among deal seekers, who traditionally line up well before the crack of dawn to churn billions of dollars into the economy, may be on its deathbed.
But it's not dead yet. That's because, despite data that shows shoppers think Black Friday is the most stressful time to shop — not to mention the meteoric rise of e-commerce that fuels the apocalyptic foretelling of brick-and-mortar retail’s demise — Black Friday is still the No. 1 sales weekend of the year.
Yet, seismic change is afoot — and for retailers that do not adapt, Black Friday could very well become a relic of a bygone era. Bisnow reached out to more than 30 commercial real estate retail experts in the U.S. to ask one question: Is Black Friday still relevant for brick-and-mortar retail?
Here are their answers:
NAME: John Chang
TITLE: First Vice President of Research Services
COMPANY: Marcus & Millichap
Many believe the 2017 holiday season will be the crossroads of change for brick-and-mortar retailers: Stores will either adapt to the digital marketplace or begin the process of shuttering their locations. For old-world retailers that have failed to embrace integrated omnichannel retail and fail to offer differentiation or a memorable experience, this could quite possibly be their last holiday sale. Black Friday itself will continue to be an important event — the kickoff for the holiday shopping season. Traditional “door-buster” deals on electronics, toys and other merchandise will not be enough to save brick-and-mortar retailers, however, because there is almost always a better deal online. Innovative retail centers will take this event beyond discounted gadgets, changing the holiday shopping kickoff into an experience that customers will attend for entertainment. Well-positioned retail centers can tap into nostalgia while integrating online and mobile engagement to draw people to their stores and entice them to move throughout the shopping experience. A combination of entertainment, experiences and services must be blended with discounts, coupons and mobile technology to engage customers and make Black Friday a true event.
NAME: Greg Maloney
TITLE: CEO of Retail
Black Friday still certainly has some relevance — but that is quickly waning as the November promotion machine has swallowed the day whole. What’s important to note, however, is that this [is] not strictly a brick-and-mortar issue — but a retail one in general. Cyber Monday, while much newer to the game, is also quickly fading in importance. While Black Friday is significantly older, it wasn’t until fairly recently that it was known as the busiest shopping day of the year. That title belonged to Super Saturday (the last Saturday before Christmas). We have seen a spreading-out effect occur across the retail landscape when it comes to deals, which has created a dilution in terms of retail sales across the holiday shopping season. Nowhere is that more apparent than the Thanksgiving, Black Friday, Cyber Monday corridor — or as I dubbed it last year, “Cybergivingblackfriweek.” We have started to see some backlash against the Black Friday “creep” as more stores, and at least one mall owner, are going to be closed on Thanksgiving this year — which makes sense as there has been little evidence that opening on Thanksgiving did anything but shift sales across multiple days, not increase them incrementally. In a vacuum of course, there is nothing wrong with Black Friday and Cyber Monday losing relevance to the month overall — but the danger comes in the external perception through reports of Black Friday total sales or traffic being down as somehow indicative of the season as a whole — which I expect to be the most robust one since 2005. For better or worse, Black Friday is now Black November — and we should simply act accordingly.
NAME: Brad Hutensky
TITLE: Founder and CEO
COMPANY: Hutensky Capital Partners
CITY: Hartford, Connecticut
Most members of the media have already written their Black Friday story — at least in their head. The theme will be “brick-and-mortar retail is dead because …..”: a) E-commerce; b) Change in shopping habits; c) Amazon’s dominance of everything in the world; d) All of the above. For a number of reasons, you might not want to believe everything you read. To be sure, there will be retailers who are down compared to last year’s figures, but Black Friday is Fat Tuesday for retailers: everyone does a lot of crazy stuff and these antics are not a great predictor for behavior for the rest of the year. Some retailers will post some positive numbers but that will get much less attention since good news does not sell papers. The commentary I am waiting for is Whole Foods. Amazon and a brick-and-mortar retailer are on the same team. Can’t bash or praise one without giving the same to the other. It will be interesting to see how the media spins that one.
NAME: Jason Gaines
TITLE: Senior Vice President, Retail Services
COMPANY: NAI Partners
The annual tradition of Black Friday insanity is being attacked on two fronts, each eating away at this tradition. The first is the ever-present rise of internet sales, which has given America more reasons to stay at home and wait on Cyber Monday. Instead of breaking up the holiday, driving to the store at inopportune times and wrestling humanity; Cyber Monday can be transacted with minimal time spent from anywhere. The other is the rise of “extended” Black Friday hours. Before it was strictly the day after Thanksgiving starting at pre-dawn hours, but in recent years, there has been a rise in stores opening on Thanksgiving, promotional sales that target “last minute” shoppers, and even holiday sales [and] promotional efforts to encourage people to shop as early as October (i.e., holiday savings cards that have charitable donations). Ultimately, there is no reason to see an upswing in Black Friday traffic any time soon. There are certainly enough people who consistently look forward to Black Friday competitive-shopping that this will always be a part of American life, but the days of seeing people treating the experience like the Boston Marathon starting line are likely dwindling.
NAME: Gar Herring
TITLE: President and CEO
COMPANY: MGHerring Group
Black Friday is absolutely relevant for the friends and families that make it a shopping event, as it provides an entertainment experience that online shopping cannot match. It is more relevant for the malls and retailers that have the courage to remain closed on Thanksgiving to push sales into Black Friday. Having ‘Black Friday’ deals on Thanksgiving and throughout the week just spreads the same sales revenue over more days, increases costs and reduces the shopping experience.
NAME: Jim Dillavou
COMPANY: Paragon Commercial Group
CITY: El Segundo, California
Brick-and-mortar retailers relying on strong holiday sales to shore up annual balance sheets might as well close up shop now. They are focused on the wrong thing. Their focus should be much broader. We are in the midst of a healthy adjustment in the retail business (not unlike prior shifts from department stores to mail order catalogues to big box retail) wherein retailers that have invested in adaptation and innovation will survive, and those which have not will disappear. Strong holiday sales may prolong the life of a dinosaur retailer, but will not prevent its eventual extinction.
NAME: Nick Garzia
TITLE: Director of Leasing
We live in an era where you can get anything you want, anytime you want at the press of a button — but the social experience of shopping cannot be duplicated online. Black Friday is the traditional start of the holiday season, which is about more than just shopping. It is a day to gather with friends and family to shop, dine and be entertained. So, for shopping centers, as well as the brick-and-mortars which call those developments home that get the experience right, it’s more important than ever. Memories are not made online. That is never going to change. I think the day is going to become more about reconnecting to family and friends and less about giant discounts and free televisions.
NAME: Sam Young
COMPANY: Cushman & Wakefield
Trends suggest that Black Friday will lose its position as the No. 1 sales volume day for brick-and-mortar retail. Retailers are starting the deals earlier in the season, which has been good for overall holiday sales volume and has lessened the need for shoppers to focus on Black Friday for deals.
NAME: Cary Beale
TITLE: SVP of Retail Landlord Services Division
COMPANY: Franklin Street
Black Friday has consistently been one of the highest annual grossing sales days since the shopping phenomenon earned its official name in the early 1950s. Consumers still spend more than half of their shopping budgets in-store. I think the most important retailers to consider when analyzing the relevance of brick-and-mortar are the bargain brands such as Walmart, which boasts more shoppers on Black Friday than annual visitors at Disney World. For these giant discount retailers, Black Friday is infinitely important.
NAME: Nick Hernandez
TITLE: Managing Director
Since [an estimated] 70% of all Americans plan to shop on Black Friday, I still believe it is extremely relevant. The media’s reporting of long lines, people camping at stores overnight, and the excitement of the tradition all play into the fact that brick-and-mortar retailing is still extremely important to the American culture.
NAME: Kathleen Cullen
TITLE: Director of Consumer and Retail Insights
COMPANY: National Retail Federation
CITY: Washington, D.C.
To understand the significance of Thanksgiving weekend, including Black Friday, it’s important to look at consumer behavior throughout the holiday shopping season. More than half of consumers have already started their holiday shopping by early November. But according to the latest NRF holiday survey conducted with Prosper Insights & Analytics, only 12% of consumers have finished the majority of their holiday shopping by mid-November and just 2% are completely done. For the 98% still shopping for gifts, food and holiday décor, Thanksgiving weekend — which NRF counts as Thanksgiving Day through Cyber Monday — remains an important shopping event. Approximately 69% of adult consumers in the U.S. say they’re planning to or considering shopping during this five-day event, with the vast majority planning on shopping specifically on Black Friday. Interestingly, young consumers are actually more likely to be shopping than older generations: 86% of 18-24 year-olds are planning to or considering shopping during Thanksgiving weekend. This is when they expect to find the best deals and promotions, making it a great time to pick up the many items on their holiday shopping lists.
NAME: Jimmy Penman
TITLE: Vice President
COMPANY: Lat Purser & Associates
It’s not as relevant or as compelling as it once was. Consumers are trained to seek deals at all times, so they’re not as motivated by a Black Friday deal when they can find a deal online any day of the week. As shopping center owners, we have a responsibility to drive retail traffic, and that’s not done through discounts but by creating an exceptional customer experience. A big part of that is finding the right mix of tenants that will draw people in.
NAME: Deena Zimmerman
TITLE: Vice President
COMPANY: Sperry Van Ness
Black Friday remains relevant for brick-and-mortar because more millennials want the experiential component. Physical shops are now offering discounts at specific times during the day that can't be replicated online, and they're capable of handling returns that online retailers either can't or won't. I tried to do all of my shopping online last year and wound up heading to stores and getting better deals. I predict that Black Friday sales this year will eclipse last year's numbers.
NAME: Garrick Brown
TITLE: Vice President, Retail Research of the Americas
COMPANY: Cushman & Wakefield
To say that Black Friday is no longer significant would simply be grossly inaccurate. The "Christmas creep" — the trend of retailers beginning their holiday promotions earlier and earlier — is a major factor. It used to be that Black Friday was the traditional start of the holiday shopping season, with retailers who launch promotions prior to Black Friday being the outlier. Now, the holiday shopping season begins the day after Halloween. Our own tracking of 30 major retailers indicated that 56% of the major chains (including Amazon) started their holiday promotions last year after Nov. 1 but before Black Friday. This year, that number jumped to 80%, with 50% of the chains we track starting holiday promotions and sales before Halloween. So what's happening? Holiday sales activity for brick-and-mortar stores that used to be concentrated on Black Friday have been dispersed earlier and earlier in the season and by online sales — particularly over that weekend. But to say Black Friday is not significant would be just plain incorrect. It’s just that we see the final weekend before Christmas inching ahead of Black Friday this year. In fact, traditional retail in general is seeing some of its strongest numbers in the final ten days before the holiday for obvious reasons — that's when online delivery capabilities become much more questionable, and that means consumers have to go to the mall.
NAME: Terry Montesi
COMPANY: Trademark Property Co.
Though Black Friday is absolutely still relevant for brick-and-mortar retail, it becomes less so each year. We continue to see brick-and-mortar retail become more about experience, service and tech, and less about fashion, while online continues to become a bigger and bigger part of commodity goods acquisition and low price seeking. However, customers seeking deep values are still abundant, and to many of those consumers, brick-and-mortar Black Friday is a treasure hunt sort of activity, and thus certainly still relevant.
NAME: Adelaide Polsinelli
TITLE: Senior Managing Director
COMPANY: Eastern Consolidated
CITY: New York City
I think Black Friday is still a viable revenue producer. For many, shopping the day after Thanksgiving is a ritual. It’s a fun family tradition that combines shopping with a cultural or dining experience. In my family, my kids and I take advantage of the “door buster” specials in SoHo on Thursday evening after Thanksgiving dinner because we want to avoid the crowds on Friday. But whether you shop on Thanksgiving, Black Friday or Cyber Monday, it’s an integrated experience that still has legs.
NAME: James Chung
TITLE: Executive Managing Director, Managing Principal, West Region Retail
COMPANY: Cushman & Wakefield
CITY: San Jose
Of course [Black Friday is still relevant]. Shoppers have made Black Friday into its own holiday of sorts, and there's a real, experiential component and connection to showing up for doorbuster deals at 5 a.m. that cannot and should not be overstated. For the first time since 2012, there will be four Saturdays in December before Christmas. And with consumer confidence at its highest level in 17 years, it's a great time for retailers to capitalize.
In my opinion, it's a natural progression for e-commerce to grow incrementally year-over-year — but savvy retailers will continue to seek out and develop creative omnichannel strategies that leverage both digital innovations and physical space. Customers still crave an experience, and that involves tangible interactions with products.
NAME: Chris Talanian
TITLE: Director of Business Development
COMPANY: C. Talanian Realty Co.
For traditional retailers in this environment, it’s not just about one day. Many stores will spend the entire rest of the year in the red, and look to November through January to get back in the black. Stores are offering more incentives to bring people in the door, like in-store events, sales, promotions, etc. Retailers are also changing around product lines to be more “internet proof.” In many cases, they’re offering more in-store services, or customizable/personalized items that can only be found in-store. The general rule seems to be, “don’t carry anything that can be bought on Amazon for cheaper.” Staffing is also a problem. Extra help for the holidays used to run around $12-$13/hour. Now it’s difficult to find good staff that will work for under $18/hour. For the retailers, it’s a matter of preparedness and having to be more creative in a difficult environment.
NAME: Fred Bruning
COMPANY: CenterCal Properties
CITY: El Segundo, California
I do think that Black Friday will retain its place in brick-and-mortar's cultural lexicon, although it seems to be creeping toward Black Thursday, or even earlier in the holiday calendar. Shopping remains a social and communal activity, as it has for millennia, and while the internet may cause an eddy in the river of commerce, the flow of the river is so strong that its general course will remain unchanged, just as with catalogues in years past.
NAME: Rod Sides
TITLE: Vice Chairman and U.S. Retail, Wholesale and Distribution Leader
Black Friday is still relevant. While the timing of purchases continues to shift, it still signals that start of the holiday season. As a result, we still anticipate robust shopping in-store. While shoppers expect to spend 51% of their holiday budgets online versus 42% in-store, 43% of consumers plan to buy items online and pick them up in-store, due to savings on shipping charges and getting the item faster.
NAME: Diane Danielson
TITLE: Chief Operating Officer
Although we’re seeing retailers adjusting their Black Friday strategy through modified store hours or, in select cases, closures all together, Black Friday will continue to be a milestone day in the retail calendar for some brick-and-mortar locations in the foreseeable future. While e-commerce will continue to grow market share — with consumer surveys predicting stronger online sales this holiday season — brick-and-mortar locations will benefit from shoppers who value the immediate gratification and tradition of Black Friday shopping.
NAME: Marty Pupil
TITLE: President of U.S. Brokerage
COMPANY: Colliers International
CITY: Irvine, California
Black Friday remains an extremely relevant part of the brick-and-mortar retail experience. While online shopping does continue to play an increasing role in retail, data Colliers has published in partnership with GlobalData indicates that only 10% of retail sales are online. Today’s consumer values unique experiences, and Black Friday is the ultimate retail experience with many stores matching prices with competitors, providing consumers the rare opportunity to haggle. Last year, more than 100 million shoppers made purchases in stores on Black Friday, which was actually a substantial increase from 2015. In particular, the best deals for electronics, appliances and jewelry are presented by in-store deals and sales. While online sales are undeniably substantial, shoppers who value the experience of bargain hunting and competing for discounted products continue the tradition of in-store shopping experiences.
NAME: Patrick Owens
TITLE: Senior Vice President
While the internet continues to rise in percentage of overall retail sales, brick-and-mortar stores remain the preferred shopping experience, accounting for more than 90% of sales. A recent National Retail Federation survey showed that Black Friday remains the biggest shopping day of the year with over 115 million Americans hunting for deals. The most successful retailers will seamlessly deliver products and deals online, in-store, and blend the two with the ability to order online and pick up in store. Regardless, performance on Black Friday can make or break a year. Hopefully, current projections of an increase over last year prove correct.
NAME: Steven Gartner
TITLE: Managing Director, Retail
Most of the world has the day off, so shopping is a great way to burn off the turkey and pie. Family and friends are around, so it’s a great communal event to do with others. This year, it also seems that more retailers are honoring the Thursday holiday by being closed, so that brings Black Friday back to a special shopping day.
NAME: Ron Pfohl
TITLE: Partner and Director of leasing
COMPANY: Columbia Development
Black Friday is relevant because of its symbolic meaning. It marks the kick-off to the holiday shopping season — the most important time of the year for most retailers. However, holiday sales are no longer confined to a single day or location. And, the health of brick-and-mortar retail is not accurately measured by whether consumers decide to shop online or in store on Black Friday. Over the last 50-plus years, Black Friday has evolved along with retail. It reflects the evolution of today’s consumer shopping habits, and therefore, reflects a variety of buying channels (online, mobile, in-store pickup, in-store, etc.). The progression of multichannel retail provides a far better shopping experience. Shoppers no longer need to stand in line for hours to get the season’s hottest gadget for the best deal. Vibrant mixed-use communities that offer experiences like ice skating, music and other entertainment can expect an increase in foot traffic this Black Friday from families and friends looking to get out of the house and enjoy a holiday shopping experience. Retailers that provide easy, dependable online and mobile platforms coupled with great in-store experiences will have a clear advantage over their competitors and will likely see an increase in overall holiday sales.
NAME: Amy MacLaren
TITLE: Vice President
Yes, it will always be relevant, but it is evolving. There is a large segment of the population that is still, and will continue to be, very interested in the discounts offered on Black Friday. There are also those who use Black Friday shopping as a form of entertainment for the family members who visit over the Thanksgiving holiday. Though millennials may want to do everything on their phones, Black Friday will continue to appeal to those who like to find a good deal as well as the older generation that may not be comfortable shopping online.
NAME: Leo Wiener
TITLE: President, Ackerman Retail
COMPANY: Ackerman & Co.
The question is not whether Black Friday is still relevant to brick-and-mortar retail, but to what extent is it still relevant? Traditional thought is that it is and will continue to be relevant, but this is changing at a rapid pace. More and more, we’re finding that Black Friday sales are being pushed earlier and earlier to the end of October and November. The days of pent-up demand waiting for the once-in-a-lifetime sale on Black Friday has diminished. It’s also important to note the yearly increases in online retail sales and Cyber Monday — a trend that will also continue this year and into the future, taking a hard bite out of traditional Black Friday sales. As retailers continue to explore finding the right balance of online sales and more traditional purchases at brick-and-mortar locations, we will eventually find a new normal.
NAME: Mike Longmore
TITLE: Executive Vice President, Business Development – Retail
The window of time when consumers shop over the season has been expanded. Halloween was quickly replaced with Christmas decorations and sales promotions. This year, brick-and-mortar retailers can profit by creating a festive and enjoyable holiday atmosphere that brings in traffic and offers customers unique experiences they can only get in store. Low prices and exciting deals continue to be strong drivers for online shoppers, but nothing compares to an in-person buying experience when purchasing gifts, especially for personal and high-touch items.
NAME: Todd Norley
TITLE: Vice President of Leasing
COMPANY: WS Development
The rush of the deal will never die. That said, with longer promotional periods, “always on” channels and flash sale models, deal-driven retail goes far beyond Black Friday. What hasn’t changed is the spirit of giving that surrounds the holiday and our opportunity as placemakers to harness that inclination towards traffic and sales. At WS, that opportunity is realized through programming that reflects the way people live today — from morning coffee and yoga, to gift shopping and party prep, to ice skating alongside carolers. Physical retail continues to deliver on “insta”-gratification, the touch-and-feel of product, people connecting with people and a therapeutic high that you just don’t get from the internet. So while Black Friday is no longer “the event,” it’s an ideal time to translate intent into impact.
NAME: Angelo Carusi
COMPANY: Cooper Carry
Black Friday signifies the start of the holiday shopping season, a historically important time of the year for retailers when they go from operating at a loss — or being “in the red” — to making a profit and being in the black. However, retail has dramatically evolved to align with today’s experience economy, and so has Black Friday. The day has lost some of its importance in getting great deals (commodities), but it remains one of the most family-oriented holidays — the day after Thanksgiving — and it still carries great weight when it comes to the social importance (experiences). NRF recently reported holiday retail sales will increase between 3.6% and 4% this year compared to last year. We expect retailers that offer great in-store experiences paired with easy-to-navigate mobile and online platforms will see high sales volumes this holiday season.
NAME: John Sechser
TITLE: Senior Vice President and Director of Retail Operations
CITY: San Francisco Bay Area
Black Friday should now be called Black Thursday to Monday. Last year’s shopping season was overshadowed by pre-election uncertainty. The Black Friday weekend accounts for over 15% of retail sales for November and December. Therefore it remains extremely important to both brick-and-mortar as well as online retailers. The advantage for online retailers is in their slimmer profit margins. They also compete by offering free shipping and returns. However, over a quarter of online Black Friday sales result in returns which affects the retailer's ability to resell at full price. With Amazon and Walmart at the helm of online competition, it's even more important for brick-and-mortar to create the in-store experience. The National Retail Federation expects to see increased sales in the 2017 Black Friday holiday tradition. Overall, it's important and relevant, for brick and mortar. It is, in fact, the Super Bowl of retail!