‘Black Friday’ becoming a shadow of its former self in US

The U.S. holiday shopping season officially opened with a deluge of “Black Friday” promotions but the frenzied crowds of the past have thinned out with the rise of e-commerce.

Companies in the retail, entertainment and tourism industries once again tried to entice shoppers after Thanksgiving with a bevy of offers on a day synonymous with American consumer culture and notorious “doorbuster” sales that start at the crack of dawn.


But U.S. consumers aren’t buying Black Friday the way they once did.

Only 36% of U.S. consumers plan to shop this year on Black Friday, down one percent from last year and a decline of 23% from 2015, according to a PricewaterhouseCoopers survey.

“Just a few years ago, Black Friday had the aura of a FOMO (fear of missing out) event,” PWC said. “Now it seems more symbolic than significant in the pantheon of retail holidays.”

Black Friday will be followed in three days by “Cyber Monday,” a second highpoint of spending early in the season.

Friday’s sales have prompted copycat versions throughout Europe, an effort that has generated no small amount of friction.

This year’s events prompted protest in parts of France, Germany and the Netherlands that included environmentalist rallies outside Amazon distribution centers and human chains blocking malls.

There has been little sign of that sort of subversiveness in the United States. Rather, the bigger emerging challenge for Black Friday has been shifting consumer patterns.

The PWC survey said that for the first time in 2019 more consumers (54%) said they’ll do more of their shopping online than in stores.


Higher sales expected

Economists and retail industry insiders are broadly confident about the outlook for the 2019 season, owing to a strong labor market.

Consumer spending accounts for about 70% of US economic growth and has stayed strong throughout 2019 even as manufacturing has stagnated and business investment has been lackluster.

“Consumers are in good financial shape and willing to spend a little more on gifts for the special people in their lives this holiday season,” said Matthew Shay, Chief Executive of the National Retail Federation.

The NRF has projected that US consumers will spend an average of $1,048 this year, up about 4% they said they would spend last year.

But increasingly more of those sales are migrating online.

This trend includes Amazon of course, but also traditional brick-and-mortar chains like Walmart and Macy’s that have evolved into “multichannel” retailers, as well as companies and organizations hawking everything from pet food to hotel stays to political merchandise.

President Donald Trump’s “Make America Great Again” merchandise was being once again discounted on the U.S. president’s political website at 35% off.

Democratic presidential candidate Elizabeth Warren of Massachusetts was offering 25% off merchandise orders of $75 or more.

Due to the lateness of Thanksgiving, this year’s holiday shopping season is about six days shorter than last year, prompting more retailers to push up promotions even earlier in the season than usual, according to analysts.

Online consumer spending on Thanksgiving day came in this year at $4.2 billion, up 14.5% from a year ago and the first time above $4 billion, according to Adobe Analytics.


Jason Woosley, a vice president with Adobe, said preliminary data showed Black Friday was also on track to top its performance from last year by almost 19%, with promotions for sporting goods and appliances especially popular.

The data suggested the Thanksgiving day shopping spree hasn’t “stolen any traffic from Black Friday,” he said, adding that about 20% of the overall online sales for the season are expected between Thanksgiving and Cyber Monday. NVG

source: business.inquirer.net

Change or die: American malls confront Amazon era

As the retail industry churns in the Amazon era, American shopping malls are turning to a new generation of stores, food and entertainment offerings to make up for an exodus of department stores.

Prime mall real estate is increasingly going to players who began online and are graduating to brick-and-mortar, such as plus-size clothing label Eloquii, or stores selling niche items like candy and conflict-free diamonds.

In some cases, these retailers are taking space, literally, from exiting chains like Macy’s.

Other additions include the trendy burger restaurant Shake Shack, and Dave & Buster’s, whose video game and pro-sports viewing restaurants are emblematic of the “experiences, not stuff” mantra now resonant among consumers.

The changes to malls — climate-controlled beacons to American consumerism that grew rapidly in the latter part of the 20th century — are part of a fundamental industry rethink as e-commerce, led by gargantuan purveyors like Amazon, takes market share and alters consumer expectations.

“This isn’t the same culture as 30 years ago,” said retail industry analyst Dana Telsey, who sees today’s moves as the “early innings” of a multi-year evolution.

Malls will endure because they offer “the excitement of being able to see what’s new,” she told AFP. “It’s a meeting place. It’s an entertainment center.”

“You’re always going to have shopping centers that engage,” said Telsey, chief executive of Telsey Advisory Group.

The changing times are a period of reckoning for hundreds of second-tier shopping centers in a country that experts say has long been “overmalled.”

A January review of 1,070 malls in the US by Green Street Advisors, a real estate research and advisory firm, classified more than 330 malls as “at risk to close” due to declining occupancy, low sales, weak socioeconomic demographics and anchor store vacancies.

“These malls only account for roughly five percent of mall value in the US,” the report said. “Most won’t be missed.”

Survival of the fittest

Many of the most vulnerable malls were built in the 1960s and 1970s with department stores as anchors that attracted enough customers to also support secondary stores.

But stores in malls were often pricier than free-standing shops because of the heavy rents for common costs such as heating, maintenance and security, said Fred Hurvitz, professor in retail studies at Penn State University’s Smeal College of Business.

The arrival of e-commerce and greater price transparency means malls must compete not only with Amazon for more cost-conscious customers, but with discount chains.

“You’re seeing a whole movement towards any way you can save the customer money, that’s going to make you more viable with the customer,” Hurvitz said. “Without high traffic levels, the malls die.”

The exodus of retailers means shopping centers that were once hives of activity are hollowed-out shells with a few well-stocked shops surrounded by empty storefronts. Parking lots that were jammed with cars a few decades ago are now mostly empty seas of asphalt.

“It’s a very depressing place,” Nakul Kumar, an economics professor at Bloomsburg University, said of the Columbia Mall in Bloomsburg, Pennsylvania, which just lost its J.C. Penney store.

Kumar joined a Planet Fitness gym that opened earlier this year at Columbia Mall in a space formerly occupied by Sears, and he says he hopes that increased traffic from gym members will spur more activity.

But it was not, perhaps, a good sign when Columbia Mall was profiled earlier this year by filmmaker Dan Bell as part of his YouTube “Dead Mall Series.” The Baltimore documentarian has also featured visits to seen-better-days malls in North Carolina, Tennessee and Maryland.

Bell’s portfolio was spotlighted in a July New York Times Style story that rued the passing of an era.

New investments

Yet mall developers dismiss talk of their demise despite today’s retail industry travails.

“I will tell you, it’s not a very fun environment,” David Simon, chief executive of the real estate investment trust Simon Property Group, said recently about finding new takers for vacated real estate.

“We’re pounding the pavement more than ever,” he said in a conference call.

Simon said he has been encouraged, however, by a trend of e-commerce chains like apparel maker Eloquii or eyeglasses seller Warby Parker raising capital to open brick-and-mortar stores. Some of these newer brands could ultimately have as many as 400 stores, he said.

“In this cluttered world of trying to get people focused, we are seeing more and more brands that want to gravitate to where the traffic is,” Simon said. “By and large, in communities throughout the country, that’s the mall. And that has not changed.”

GGP, another real estate investment trust, plans $1.5 billion in mall investment, including a greenfield mall in Norwalk, Connecticut and a major expansion to the Staten Island Mall in New York City that it bills as a “shopping center of the future.”

Staten Island will add the German supermarket chain Lidl, as well as Dave & Buster’s, a new AMC movie theater and a few new apparel stores.

GGP has also budgeted “refresh capital” for existing malls — sometimes stretching into the millions of dollars. The company recently removed an old fountain and spiffed up the dining area at its Wayne, New Jersey mall.

“You’ve turned your old, very tired looking food area into something very modern,” Kevin Berry, a vice president at GGP, said of the Wayne upgrade.

source: business.inquirer.net

Google launches new shopping tool ‘Style Ideas’

Google has just announced an update to its Image Search app which enables you to see what a fashion item you’re interested in would look like worn on a model or blogger.

The new Style Ideas feature could seem quite basic at first. But haven’t we all all asked ourselves how a jacket or dress would sit on the waist or shoulders in real life, or wondered which pants would go with a pair of shoes we’re eyeing?

The idea is simple: in addition to the standard retail photo of a fashion product, Google will show you other photos of the same item worn by one of the brand’s official models or a blogger, who has teamed it with other things.

“With Style Ideas, you can see real-life options of what bag and jeans [would] look stellar with those red high heels you’ve been eyeing,” Google explained in a blog post.

“Style Ideas” is currently only available in Image Search on mobile web and in the Google app for Android. JB

source: lifestyle.inquirer.net