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Online shopping detracts from Black Friday sales

Shoppers’ sitting down at their computers long before Cyber Monday is likely a major factor in the 11 per cent drop in Black Friday sales across the U.S., experts says.

American consumer spending between Thursday and Sunday dropped from $ 57.4 billion in 2013 to $ 50.9 billion over the same four-day period this year, the Washington-based National Retail Federation reported. It is the second consecutive year Black Friday sales have declined in the U.S.

And while the NRF had predicted a slight decline in shoppers – from 140.3 million last year to 140.1 million this year – only 133.7 million showed up. That’s a difference of more than 6 million shoppers.

Local retail experts say that while the drop can be attributed to many factors, the most prominent is online shopping.

“Online retailers are trying to defend themselves from brick and mortar retailers’ aggressive sales,” said David Soberman, a marketing professor at the University of Toronto and the Canadian National Chair in Strategic Marketing.

Traditional retailers opened earlier than ever this year. Best Buy locations were the first to welcome customers at 5 p.m. on Thursday, followed by Walmart, Target and Sears stores, as well as many malls, at 6 p.m.

Sales in-store and online started before the retail-heavy weekend; some launched as early as Halloween.

Over time, Soberman said, Black Friday’s effect – deep discounts for one day only – is being diluted. Retailers have to offer customers’ something else. Online shopping is one-stop for the intelligent consumer uninterested in going door-to-door to compare prices.

People are actually becoming better informed about prices because the Internet provides such a wealth of information,” Soberman said.

Consumers are tired of watching the news and seeing the stampeding, the aggression, and, in some cases, more serious violence, said Steve Tissenbaum, an instructor at Ryerson’s Ted Roger’s School of Management.

At some stores there is incentive for the most dedicated shoppers — the first 100 people to show up at Yorkdale Mall Friday morning received $ 50 gift cards — but most of the in-store deals can be found online, Tissenbaum said.

Still, he said he was surprised to learn sales were down. He said he doesn’t think that will be the case for the holiday season as a whole.

“Overall spending on holiday shopping, I think, will remain about where it was; maybe it will go up a little bit.”

The NRF agrees; they predicted a 4.1 per cent sales gain for November and December in the U.S., the best performance since 2011.

Online sales are increasing in the U.S., a phenomenon that has occurred throughout the year, said retail expert George Minakakis.

“I am certain that once someone gets to the data it will show consumers have been out a lot earlier shopping for the holiday and conducting their shopping online,” he said in an email to the Star Monday.

American research firm comScore reported some of those numbers Sunday. More than $ 22 billion has been spent online in the U.S. during the holiday season to date, a 15 per cent increase on the same days last year.

The company also reported Thanksgiving Day saw a 32 per cent gain to $ 1.01 billion in spending, surpassing the billion dollar threshold for the first time in its history. A day later, Black Friday beat that number, raking in $ 1.51 billion in desktop online sales, up 26 per cent from Black Friday 2013.

Black Friday weekend sales in Canada were not recorded by either the Retail Council of Canada or Statistics Canada.

Local malls could not yet provide the Star with their weekend sale amounts. Meredith Vlitas, Senior Marketing Director at the Eaton Centre, said about 1,900 fewer people visited Toronto’s largest mall this Black Friday than last Black Friday, despite projections that they would surpass the 270,401 customers who shopped in 2013.

Traffic on the weekend was “flat,” she said. In total, the three days saw about 2,085 fewer customers come through the door compared to last year, but Vlitas said feedback from retailers has been very positive.

The slow weekend in Toronto could have something to do with consumer confidence. For a third consecutive month, The Conference Board of Canada’s Index of Consumer Confidence fell, this time by 1.4 points. Ontario and the Prairies were the only regions to register a decline in November.

Canadians continue to be worried about future job prospects, according to a release from The Conference Board.

“About 21 per cent of the respondents said they expect fewer jobs six months from now — up 1.2 percentage points from October.”

In terms of the retail holiday, a decline in sales doesn’t mean Black Friday is drying up, said Soberman from the University of Toronto. It is possible retailers have simply plateaued and can’t increase their volume, making online shopping look more attractive to potential customers.

“How do you increase the volume that a store sells? More volume either means people face a longer waiting time or stores would have to add extra cash registers for one day. Stores aren’t going to do that,” Soberman said.

“So people will have to wait in longer lines for longer periods of time. Why do that when you can shop online?”


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