Black Friday sales confirmed that, above all, discounts drive consumers to open their wallets. A new study by the National Retail Federation published in Fortune found that shoppers spent $289.19 on average over the four-day weekend compared to $299.60 over the same period last year. The NRF estimates that 108.5 million people in the U.S. shopped online and 99.1 million visited brick-and-mortar stores on Black Friday and the days that followed.
The article also points out that discounting for the Black Friday rush started earlier this year (right after Halloween). Market Track analysis the week before predicted that deals would be deeper to drive up traffic – likely because top retailers like Walmart said they would fight hard on price. Best Buy and Macy’s Black Friday deals were 5 percentage points greater this year versus last, while Walmart’s were 4 points higher. Even luxury retailer Neiman Marcus was uncharacteristically aggressive in marketing its promotions this year.
The NRF survey also found that 36.2% of consumers indicated all their purchases were on sale, and two-thirds confirmed what they bought was discounted. BTIG analysts suggested that Black Friday shoppers responded solely to promotions – especially at lower- and middle-tier retailers. This aligns with pre-holiday predictions that discount stores, in particular, would thrive this holiday season given how well they did the weeks leading up to Thanksgiving. Foursquare, a location tracking company, believes that the number of visits to dollar stores this year will exceed that last two holiday seasons for two reasons: for one, customers are less interested in traditional Black Friday sales, and secondly, Americans are increasingly shopping at deep-discount retailers year-round. This corresponds with the rise of dollar stores across the country, which have increased by 45% within the last 10 years, according to Nielson data. Additionally, research firm NPD Group found that discount shoppers account for two-thirds of all customers.
It’s a fact that deep-discount retailers are the clear 2016 Black Friday winners and are likely to garner the majority of all sales this holiday season. Contact us today to learn how JustEnough helps dollar stores, like the 99 Cents Only, navigate the season and beyond with best-in-class, full integrated and easy-to-use retail planning solutions – from accurate demand forecasts to optimize assortment planning to allocation and replenishment.