Black Friday Gives Retail Early Gift Yet No Bellwether for Season – WWD

Macy’s Inc. had a good start to Black Friday, reporting robust selling on a spectrum of products packing in value, though industry-wide caution for the weekend and holiday season prevails.

Confronting slowing consumer spending this fall, Macy’s did manage to pull off a “solid” start to Black Friday gift shopping, Macy’s outgoing chairman and chief executive officer Jeff Gennette told WWD just after his walk-through of the retailer’s Herald Square flagship Black Friday morning. As he’s done each year during his tenure running the company, Gennette stationed himself with his team right by the entrance at 6 a.m. when the store opened to greet early shoppers.

At 8:50 a.m., Gennette told WWD: “It’s been a better start here compared to last year at this time. For the first two hours, there was more traffic in Herald Square and at key stores than last year. Before we opened the doors at Herald Square, there was a longer line outside than last year.”

With Macy’s discontinuing doorbusters since the pandemic but still promotional, there wasn’t the frenzy to grab deals as in years past. Asked about the mood of shoppers, Gennette replied, “Hard to tell. The customer is under pressure. It’s a very competitive environment. Everyone recognizes customers are looking for great value.” He said Macy’s determined that doorbusters became a “hassle” for shoppers and the store.

Between the transactions online Thanksgiving Day when Macy’s stores were closed, and the opening hours of Black Friday shopping, “It was a solid start to the holiday season,” Gennette said. “But as you know, the first couple of hours don’t predict what we’ll do for the weekend or for the season.”

Craig Johnson, president of Customer Growth Partners, gave the retail industry a “good not great, B-minus” rating in both traffic and sales, based on observations from his team covering 12 major shopping venues across the country as of 2 p.m. Friday, so CGP’s conclusions would be considered preliminary on the day. “If people are going to hassle with the crowds and parking on Black Friday, they don’t want to go away empty-handed. Conversion rates typically on Black Friday are high,” he said.

Significantly different levels of promotions were observed, Johnson said, “which correlates with how well the stores are doing. Three retailers that were full-price dominated — Aerie, Anthropologie and Lululemon — all had strong traffic and strong sales.”

For certain other stores, including J. Jill, White House|Black Market and Chico’s, offering 30 percent off, “It wasn’t enough to move the needle. To clear the inventory through the season they’re going to have to ramp that up unless they really ordered down. They did not seem to have a lot of momentum. For those at 50 percent off the entire assortment — J.Crew and Madewell, for example — it was clearly enough to move the needle. There was a very clear response. Kohl’s and Macy’s were very promotional. They were heavy at it and were getting decent traffic, while there were very strong results at Best Buy, Home Depot, Lowe’s and Tractor Supply, without heavy promotions,” according to Johnson.

Michael Brown, partner and America’s retail leader at Kearney, the management consulting firm, said on Black Friday at the Garden State Plaza in Paramus, N.J., “Traffic was strong but it was not the ‘kick down the doors’ traffic we’ve seen years ago. It was light on shopping bags. People were looking over the bargains, casually shopping and where they felt they were getting value they were making purchase decisions. There was a lot of activity centered around apparel.”

Cowen & Co. on Friday lowered its outlook on holiday spending to an increase of 2 to 3 percent, down from its prior forecast for a 4 to 5 percent gain, putting retail’s growth this holiday season below the rate of inflation, which stood at 3.2 percent October. Other retail experts and industry organizations have also projected modest holiday sales gains in the low-single-digit range.

Oliver Chen, managing director and senior equity research analyst at Cowen, wrote in a report: “Flat traffic trends this Black Friday as a budget-conscious consumer pulls back and prioritizes gifts for others versus self. There’s a tug of war between joys and necessities as a choice-full consumer is looking and waiting for promotions and value as well as buying closer to need. We like retailers such as Walmart and BJ’s, which are both retaining lower- and middle-income households while attracting higher-income consumers, and Ulta’s combination of mass and prestige beauty offerings.”

Chen described beauty as a “standout” given the category’s “giftability, access price points, innovation across cosmetics and skin care, and essential-like and replenishment-oriented status among consumers.

“We believe consumers will be shopping later this year for big-ticket items and we are planning that in our Black Friday and Cyber Monday strategy,” said Jamie Singleton, Signet Group president and chief consumer officer. “It’s important that our deals cover a variety of categories across our retailers, such as Kay, Sales, Jared, Banter by Piercing Pagoda and Rocksbox. We see many consumers use Black Friday deals to shop for higher-priced items such as gold and diamond pieces and watches that they have been eyeing year-round but are leveraging the holiday deals to purchase for themselves or as a gifts. Many couples purchase engagement rings during Black Friday sales.…For those already married, consumers use this time to upgrade their ring or wedding band.”

Aside from the favorable weather — sunny and in the 40- to 50-degree range in New York City on Black Friday — Gennette said the Macy’s, Bloomingdale’s and Bluemercury divisions of Macy’s Inc. were prepared with the right items and the right level of liquidity to respond to how customers are shopping.

Among the categories and items Macy’s shoppers were gravitating toward were certain coats, offered at 60 to 65 percent off; the private Hotel brand in home textiles, also at 60 percent off; some small electronics at $20; exclusive Disney kids’ merchandise, including the Princess dress, and “well-priced” cashmere, Gennette noted.

He also said Ugg was a bestselling brand, as was Nike, which was “back in the fold, both online and selling at 75 Macy stores.” Nike Inc. stopped selling third parties in 2021 but was back wholesaling this fall. Other bestsellers in the early hours of Friday in stores and online were customized engraved fragrance bottles and fragrance gift sets.

Gennette said Macy’s, through its online marketplace, has become “very competitive in electronics. Though we don’t own any of that inventory, we are are able to attract new customers.” Dyson appliances and Sony Playstation 5 have been selling well, he noted.

Other bestsellers so far, as cited by Gennette, were All-Clad seven-piece cookware sets, Estée Lauder lipstick sets, as well as diamond stud earrings.

Black Friday, at least for Macy’s Inc., is no longer the biggest volume day of the year. “It’s a top five day,” Gennette said.

A bigger day will the 21st of December because it’s the last day of guaranteed shipping in time for Christmas, Gennette said.

This year’s calendar “sets up really well” for retailers since there is an extra day of shopping — 32 between Thanksgiving and Christmas versus 31 in 2022 — and a full weekend before Christmas Day, which falls on a Monday, he said.

Gennette also said he expects a post-Cyber Monday shopping lull potentially longer and deeper than last year to occur, but that the last 10 days before the holiday should be robust, particularly in stores as deadlines loom for getting orders shipped in time for Christmas.

Macy’s Thanksgiving Day Parade was a big success and had a “souped up” production this year with several A-listers performing including Jon Batiste, who kicked off the pageantry, and Cher, and an extra half-hour on television.

There was a brief interruption in the parade when pro-Palestinian protesters jumped the barricades on Sixth Avenue, glued themselves to the street and had a couple of small skirmishes with police, who quickly made arrests and cleared the way for the parade. Asked how big the interruption was, Gennette said, “Macy’s supports peaceful protesting, but talking about the parade, if you don’t have credentials you are not supposed to be on the parade route. We are quite thankful for the depth and talent of the NYPD. It’s one of the finest police forces in the country.” When asked how much the protest delayed the parade, Gennette said, “It wasn’t really a disruption at all. We dealt with it. I would not call it a disruption.”

The parade wasn’t the only thing to face disruption during Thanksgiving weekend. Even as shoppers headed to American Dream in New Jersey, the mall faced a bomb scare shortly after it opened at 7 a.m., that forced an evacuation at around 8:20 but was able to reopen by 9:15.

“American Dream was evacuated this morning following what was later deemed a non-credible threat,” the company stated. “This was done out of an abundance of caution, as the safety of our employees and guests is and will always be our priority. The center has already reopened. We look forward to a joyous and safe holiday season.” A spokesman said the mall reopened a bit after 9 a.m. and had crowds throughout the day.

Some positive news on holiday business came from Adobe Analytics data, which covers more than 1 trillion visits to U.S. retail sites, 100 million stock keeping units, and 18 product categories. Adobe reported that Black Friday is expected to bring in $9.6 billion in online sales in the U.S. The giant software firm also reported that online sales were up 5.5 percent  on Thanksgiving Day, to $5.6 billion.

“This is nearly double what consumers spent just a few years ago — $2.87 billion in 2017 — highlighting the continued shift to more spending online In the holiday season so far,” Adobe said.

The online gains Thursday reflect that most brick-and-mortar stores were closed Thanksgiving, pushing consumers to shop online that day, the increasing usage of websites to shop, increasing usage of mobile devices for shopping, and price promotions, which grew more attractive as each day passed this week.

Adobe also reported consumers spent $76.7 billion online, up 6.8 percent, in the first 23 days of November.

Toys, clothing and gift cards have been the biggest sellers so far this season.

Adobe reported: “Shoppers saw big discounts for toys yesterday (up to 28 percent), as well as electronics (27 percent) and computers (22 percent). Strong bargains across the board enticed consumers to hit the ‘buy’ button: Online sales of toys were up 182 percent (compared to average daily sales in October 2023). Other categories showing strong demand include jewelry (up 126 percent), apparel (up 124 percent), electronics (up 113 percent) and personal care products (up 67 percent). 

According to Adobe’s shopping guide, the best bargains for toys (35 percent) and apparel (25 percent) will be on Sunday. Cyber Monday will have the best deals for electronics (30 percent) and furniture (19 percent). Those looking for the best deals in appliances (20 percent) will find them on Nov. 30. 

— With contributions from Evan Clark

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