It Appears Black Friday Is Becoming More Irrelevant
The death of brick-and-mortar retailers, commonly referred to as the "retail apocalypse," has been a theme for the better part of this decade. A number of factors such as the rise of e-commerce, changing consumer behaviors and rising rents have caused countless retailers to close thousands of stores.
With the holidays quickly approaching, sales data from last week's Black Friday is the latest reminder that the "retail apocalypse" is likely to only get worse. While consumers are still spending, data from Adobe Analytics points to an increasing preference among consumers to shop online.
Black Friday shoppers spent $7.4 billion online, an increase of 19.6% from last year. While still short of the estimates of $7.6 billion, the total marks the second-largest online shopping day in history behind last year's Cyber Monday, which saw $7.9 billion in sales. Adobe expects spending for today's Cyber Monday to reach a new record of $9.4 billion, which would indicate an 18.9% increase from 2018.
Thanks to the internet and boredom on Thanksgiving, consumers are no longer waiting for Black Friday to begin shopping. Online sales on Thanksgiving reached $4.2 billion, marking the first time online sales on Thanksgiving surpassed $4 billion. The total marks a 14.5% increase from Thanksgiving of last year.
As for foot traffic in brick-and-mortar stores, ShopperTrak estimates that visits to stores fell a combined 3% during Thanksgiving and Black Friday compared with the same period last year. Foot traffic on Thanksgiving increased by 2.3% compared with last year, while Black Friday foot traffic fell 6.2% from a year ago.
"What all of this really boils down to is the customer journey has changed, now it can start anywhere online, in-store and end anywhere ... and it is about making sure the customer makes the purchase and stays loyal to the brands more than where it happens," said Brian Field, senior director of global retail consulting for ShopperTrak.
While many retailers are just as happy to have a sale online as they are in store, the data from this holiday season so far points to further trouble ahead for brick-and-mortar retailers. With costs such as rent and wages continuing to increase, the future of retail may very well end up being a smaller physical presence as consumers increasingly prefer to shop online.
With Black Friday becoming more irrelevant every year, the videos of people fighting to get into stores may one day become a thing of the past.
But they already "agreed in principle" to a phase one trade deal. According to China’s Global Times newspaper, China wants the removal of existing tariffs on Chinese goods as part of a phase one trade deal. "Sources with direct knowledge of the trade talks told the Global Times on Saturday that the U.S. must remove existing tariffs, not planned tariffs, as part of the deal," according to the report. A second source said U.S. officials have resisted the removal of existing tariffs because doing so meant "surrender" as it is the only leverage the U.S. has in the trade war.
At least they still have iBuybacks. Jony Ive, who designed popular Apple products such as the iPhone, iPod, iPad and just about everything else, has officially ended his tenure at Apple. Ive, who joined the company in 1992 and worked closely with founder Steve Jobs, has been removed from the leadership page of Apple’s website. Ive announced in June he would be leaving Apple "later this year." Now that Apple's only innovation is more phone cameras and share buybacks, Ive reportedly said Apple CEO Tim Cook "showed little interest in the product development process." Ive will now open an independent design company called LoveFrom, which will include Apple as a client.
Mercedes isn't immune. Just last week Market Crumbs wrote about the global auto industry's struggles as it faces a slowdown and transition to electric vehicles. Now, Daimler, the owner of Mercedes-Benz, said it will eliminate at least 10,000 jobs worldwide over the next three years. The layoffs amount to around 3% of Mercedes' global workforce, as it had 304,680 employees at the end of the third quarter. "The automotive industry is in the middle of the biggest transformation in its history," Daimler said in a statement.
Hopefully they'll transition to furniture that's easier to build. IKEA, the world's largest furniture retailer, plans to invest €100 million, or $110 million, to support suppliers as they transition to renewable energy use. The move is part of the company's goal of becoming climate positive, which is cutting more greenhouse gas emissions than emitted, by 2030. "This is a way for us to add capital that will be available to speed up these transformations," said IKEA CEO Torbjorn Loof.
It was a lot smoother than with GM. Following deals with General Motors and Ford, Fiat Chrysler Automobiles NV and the United Auto Workers (UAW) union have tentatively agreed on a four-year labor contract. The deal with FCA, which is working on a merger with France's PSA to create the world's fourth-largest automaker, includes a commitment from FCA to invest $9 billion over the course of the contract, creating 7,900 jobs. "FCA has been a great American success story thanks to the hard work of our members," UAW acting President Rory Gamble said in a statement. "We have achieved substantial gains and job security provisions for the fastest growing auto company in the United States."