Has Black Friday lost its significance as a singular shopping day, or is it evolving into something more strategically beneficial for both consumers and retailers?
Today, we’re thrilled to welcome Joe Shasteen, Global Manager of Advanced Analytics at RetailNext. Joe is here to share insights into the 2024 holiday shopping season based on early Black Friday weekend data and what these trends tell us about the shifting consumer behavior landscape. From the rise of intentional spending to the evolving importance of integrating online and offline strategies, Joe will help give us a clearer picture of the holiday retail outlook.
About Joe Shasteen
Joe Shasteen is the Global Manager of Advanced Analytics at RetailNext, where he’s been for over seven years. Using Retail Labs, Joe and the Advanced Analytics team at RetailNext help retailers understand in-store shopper behavior. This leads to the testing and design of the impact of in-store changes, ultimately improving the shopper’s experience.
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Transcript
Greg Kihlstrom:
Has Black Friday lost its significance as a singular shopping day, or is it evolving into something more strategically beneficial for both consumers and retailers? Today, I’m thrilled to welcome Joe Shasteen, Global Manager of Advanced Analytics at RetailNext. Joe’s here to share insights into the 2024 holiday shopping season based on some Black Friday weekend data and what these trends tell us about the shifting consumer behavior landscape. From the rise of intentional spending to the evolving importance of integrating online and offline strategies, we’re going to talk about getting a clearer picture of the holiday retail outlook. Welcome to the show, Joe. Thank you for having me. Yeah, looking forward to talking about this with you. Before we dive in, though, why don’t you start by telling us a little bit about your background and your role at retail next.
Joe Shasteen: Yeah, so I’m Joe Shasteen, Global Manager, Advanced Analytics at RetailNext. Primarily focusing more specifically on what we will analyze with in-store shopper behavior. But as a part of my role, my team will also analyze macro level traffic trends for how, you know, traffic has changed year over year, week over week, all those different trends for how traffic performance is changing, you know, as we get into the holiday season and, you know, as we kind of go throughout the year.
Greg Kihlstrom: Great, great. So yeah, let’s dive in here and talk about 2024 holiday trends and some of the Black Friday weekend insights. So early data showed a 3.2% year over year decline in Black Friday in-store traffic, but final numbers for the whole weekend came in with just a 1.6% dip. What does this tell us about consumer behavior and their approach to Black Friday?
Joe Shasteen: Yeah, so as you mentioned, Black Friday itself was down about 3% year-over-year compared to 2023. And then actually the rest of the weekend, Saturday and Sunday, still showed minor declines, but helped to improve that overall number, still declining by less than 1% year-over-year. And I think that data combined with some of the data we were seeing from earlier in the week, especially the weekend prior, to Thanksgiving and Black Friday, where we did see a lot more positive traffic trend growth. I think that really does show just kind of the more the spread out time period for Black Friday shopping, you know, especially this year, as I was looking at some of the deals and some of the trends that we were seeing leading into Black Friday, we did really start to see you know, it’s probably been for a few years like this, but especially this year, a lot more retailers starting their sales more earlier in the year, in the year, in November, and also actually even starting to do more staggered deals. So potentially just releasing a few of their deals, you know, three weeks out from Black Friday, then in few more deals, two weeks out from Black Friday. So turning it into a little bit more of a game in some situations and really trying to provide more reasons for customers to enter physical brick and mortar stores earlier than just on Black Friday itself.
Greg Kihlstrom: Yeah. Yeah. And so despite lower foot traffic, conversion rates actually increased slightly by about 0.7%. How do you interpret this trend and what does it reveal about shopper intent?
Joe Shasteen: Yeah, so I think one thing that kind of the overall Black Friday trend showed, you know, that declining traffic was a bit more of a return to kind of what we were seeing throughout the year. So year to date traffic was also declining at about that 3%. But what was definitely interesting is that over the course of 2024 so far, traffic is down about 3% and conversion is also slightly down. What we saw on Black Friday was that that trend, while traffic trends were very similar, that conversion rate trend actually flipped and started to increase a bit more, showing a little bit more about how maybe in past Black Fridays, when we were seeing a little bit more dynamic growth in increases of traffic, that potentially some of those consumers who were making it out to stores in prior years were a little bit more willing to browse or, you know, a little bit less with that you know, incentivization to purchase or kind of feeling that immediate need to make a purchase. And I think this year, you know, whether it being maybe the think the deals were a little bit better, maybe really trying to use deals to kind of combat the increased costs of inflation that’s really been down to consumers over the past year or two. We really saw that more consumers were willing to make those purchase really kind of. Banking their holiday purchases earlier on in the year than maybe they were in the past where they were waiting for. Maybe potentially some deals closer to Christmas and we’re just kind of browsing more. This year we really saw that increase a lot more- and I think that just goes to show that maybe the deals this year were enticing them a little bit more quickly. Or also were just. Some of the guarantees that we were seeing in that. You know price match guarantees and other things that retailers were offering. We’re really driving consumers to make that purchase now and maybe not wait until they get to that week before Christmas, when typically is when we see our largest amounts of conversion kind of come in. So Black Friday is typically a pretty good week for conversion. And it was really good to see it go up this time around, especially with traffic declines. But we’re still going to be coming up on our biggest time for conversion, which is in that last week or two before Christmas.
Greg Kihlstrom: Yeah, yeah. So another thing I wanted to touch on is this concept of intentional spending and high value purchases. So it seems to reflect some of what you were just saying as well, but shoppers seem to be opting for potentially fewer but higher priced items as reflected by the decrease in units per transaction and the rise in average unit retail. How is this trend shaping retailer strategies?
Joe Shasteen: Yeah, I actually think there’s kind of two factors there. I think it depends on maybe potentially what socioeconomic group you’re looking at. I think, you know, maybe in kind of the lower end or the, you know, the mid to kind of lower socioeconomic level, I think a lot of that might actually just be driven by retailer strategies of, you know, some increases in cost due to inflation. So the costs are kind of being pushed down to consumers and based on, you know, the budget that consumers in those buckets have, they’re going to be able to buy the same products that they purchased in the past, but now it’s going to be more expensive. So therefore, that’s going to be one factor that if they only have $100 to spend, now that $100 is going to be more expensive for the units that they are purchasing, so they’re going to have to purchase fewer. So I think that’s one factor that we see that’s really driving that trend that is a little bit more probably pushed down to the consumer from you know, what we’ve seen from, you know, retailers increasing some of their costs in some cases. But then on the higher end side, right in the higher end socioeconomic statuses, we have seen that there has been some trading down, maybe from some of the really kind of supreme luxury brands into maybe more of the kind of moderate luxury brands or some, you know, outside luxury, but still kind of higher costs there. And in that, when we see that trade down, typically what we’ll see is that those consumers, because they’re typically used to purchasing, you know, very expensive individual items, are then also willing to do that same thing, but trading down a little bit more. So maybe purchasing a more premium item, but purchasing fewer of them, you know, in their kind of, you know, trade down brand that they’re purchasing from. And in that case, right, we’re seeing both of those kind of factors are really helping to drive that UPT decline and increase that AUR. So I think there’s a little bit of a factor there that’s been more so on what’s been pushed to the consumer that’s driving that. from some of the inflationary costs. And that’s really what’s been driving the consumer behavior that we’ve been seeing there, especially over the last year or two, because it’s been very consistent since we’ve really had a lot of inflation being cited as a major concern for consumers, that this UPT decline and that increase in AUR has been extremely consistent over the last year or two.
Greg Kihlstrom: Yeah, yeah. And, you know, given the concern of amidst inflation, to your point there, you know, there have been some winners in this as well. Jewelry traffic, for instance, stood out as a consistent winner this year. Why do you think that, you know, shoppers are gravitating towards some of these luxury gifts and self-indulgence amidst those inflation concerns?
Joe Shasteen: Yeah, and I would say I think this is just kind of that time of the year. I think when we look at jewelry trends around this time, I think we’ve seen really strong growth in 2023 and 2022, just looking at the numbers that we had. Jewelry was up 7% in 2023 and up 10% in 2022 as well. So seeing a little bit more kind of moderate increase this year as well. But I think that just kind of goes down to this time of the year, right? People are purchasing gifts, whether that be jewelry gifts, whether that be kind of health and beauty gifts. but also in some cases, right, purchasing for themselves as some of the deals are a little bit better. So I think we’ve just seen this trend be consistent over the last couple of years that this is when there’s a bit more of a shift into those categories. And I think we saw that to some degree this year. But I’d also like to kind of call out a little bit more on our top performing, if you look at kind of the whole weekend, apparel and footwear segments were actually also really strong. And that’s confirmed by our data, but also MasterCard released some spending data as well. And apparel was one of their top categories. Jewelry was also in there as well. But apparel was one of their top categories. And it really just might go to show that in this year, compared to maybe some prior years, and I know inflation, especially in 2023, was a big factor, but this year as well, maybe there’s a bit more of a shift towards the more kind of essential goods like clothing and apparel, a little bit more essential than maybe the luxury items such as jewelry and some health and beauty products. And I think we did see a bit of a shift as apparel and footwear was really kind of leading our category trends over the course of the entire weekend. compared to the jewelry space, which also did fairly well. And then I think the health and beauty category was a bit of a surprise to me. One thing I would like to call out with health and beauty that we saw was we had seen extremely strong growth in the health and beauty segment for the last two years. And I think what we just saw for this Black Friday was a bit of a return to maybe a little bit more normalcy. We’re still seeing very strong growth compared to 2022, even including some of the declines that we saw this year in health and beauty. But I guess overall, I wouldn’t say that there was maybe a change in the gravitating towards, you know, self-indulgence in those luxury gifts. But I think we did see maybe a little bit more importance placed on those more staple goods, you know, in the apparel and footwear segments in particular, with those really being strong over the holiday period. And I think some of that also has to do with maybe some of the shifting weather trends, right? fairly warm fall and I think as we kind of get into some of the colder trends around, you know, winter and, you know, I think we saw some severe cold weather in the Midwest on Black Friday, right, that’s always going to drive some kind of, you know, more impulse purchases, right, as people are looking to make Black Friday purchases and it’s much colder than it was, you know, a few weeks ago. So I think all those factors kind of come in, but I would say that the main thing is just that this time of the year is really a strong driver for those jewelry and typically health and beauty, even though we didn’t quite see it as much this Black Friday than we have in the past.
Greg Kihlstrom: I do want to talk about the weather impact here, because I love getting to talk through the numbers here with someone close to the research. Because as you mentioned, for those that remember, the Midwest experienced a really cold weekend. So there was a sharp decline early in Black Friday weekend. And yet they ended up seeing a 9% traffic increase on Sunday as things warmed up a bit. So can you talk a little bit more about, you know, how do these external factors like weather influence regional retail performance? And, you know, how can or should retailers prepare for these types of shifts?
Joe Shasteen: Yeah, you know, I think in this case, you know, I think we were we were lucky in that we did see it kind of just shift and maybe a little bit of a pent up demand on that Sunday where we saw people getting back out. You know, I think in some cases, you know, it might be a little bit tougher to identify when that actually, you know, when those people who weren’t able to get out and shop due to the weather are actually able to get out. But I think it was nice to see that take place on Sunday of Black Friday, especially in the Midwest. But I think for trying to handle weather, I think there’s a few things there. I think some of it is a little bit more long-term, right? And kind of understanding what the weather trends are going to be and if that’s going to have any impact on product lines that are available, right? Shifting out the seasons, making sure that there’s potentially more warm weather options rather than sorry, cold weather options rather than warm weather options in certain times, right? And being kind of on top of that and what those trends are going to look like. But then from an operational standpoint, too, just being as agile as possible with staffing, right? So understanding what your traffic trends are looking like over that time period, right? If there’s a lot of rain and you’re in a market where rain is really a a big declining driver of traffic, making sure that you’re agile while staffing, letting people know that maybe we don’t need that extra shift towards the end of the day. People can go home early, maybe shift it to later in the week when maybe that weather is going to improve and now you’re going to get some more of that pent-up demand. So I think when there’s not those selling opportunities, really doing what you can to be as agile as possible with your staffing model and trying to be as efficient there if there’s not going to be selling opportunities within the store. And then I think the other thing is leveraging online as much as possible. And if people aren’t able to come into the store to make purchases on a special day like Black Friday, making sure as much as possible that those deals are also available online. Maybe there’s an incentivized BOPIS pickup so that they can make that purchase. online right now and come pick it up in the store when the weather’s a little bit better. But I think, you know, those are kind of things that can be looked at, right? And just making sure that, again, we’ll probably talk about this a little bit later, but as well as getting into that offline and online experience and trying to make them as seamless as possible, I think, you know, weather, you can also do that as well to kind of combat the effects of weather and try to get people to shop online as much as possible when it’s impossible to get into the store, and then get them into the store and provide incentives to get them into the store when the weather has turned and you’re able to make that connection and get them back in the store to connect with the brand.
Greg Kihlstrom: Yeah, yeah. And I do want to talk about that online offline integration as well. But before we do that, I did want to circle back on something you touched on very briefly at the beginning, but when I get back to this is promotions are evolving over time. And certainly there’s trends and ebbs and flows, but it seems that extended promotions are decreasing the singular importance of a day, in this case, Black Friday. How is a trend of extended promotions benefiting both customers as well as retailers?
Joe Shasteen: Yeah, I think from the customer side, you know, it really goes back to the convenience and allowing customers more flexibility to shop when they want to, right? If you’re in a store two weeks out from Black Friday and you’re looking to make a purchase of an item, right, and you know it’s going to be on discount, letting them make that purchase right then when they’re there is a lot better than potentially making them come back in two weeks when you’re not sure that they’re going to come back in two weeks to make that purchase. The customer might be a little frustrated in certain cases that they have to come back to get that deal. So both from the convenience standpoint of the customer, it’s a benefit, but also allowing the retailer to bank that Black Friday sale a little bit earlier And ultimately, by doing so, that customer doesn’t need to be back in the store on Black Friday when crowds are already, you know, kind of at their peak. It’s going to enable a better overall shopping experience, both for that customer who can make that purchase early, but also then those customers who are back in store on Black Friday itself. It’s going to reduce, hopefully, some of the out-of-stocks because inventory will be able to plan for inventory better based on what we’re seeing that’s selling earlier on from the Black Friday discounts, but then also reducing the lines of customers, allowing employees to be more focused on the customers that are in-store and provide them with a better experience. Because that’s still, ultimately, one of the main reasons that consumers come into-store, especially as we’ve been seeing over the you know, last few weeks, there’s been a lot of articles about how online sales did, you know, extremely well for both Black Friday and Cyber Monday in 2024. So, you know, what is the reason they can come into the store? And if they’re going to be able to be able to interact and work with a knowledgeable associate, and it’s not going to be crowded, those associates aren’t going to be extremely stressed out by all the people that are in the store. It’s going to provide that better experience for customers who who are in the store on Black Friday. And ultimately, that’s going to be a value add in the long run and increase the loyalty that that consumer is going to feel for the brand. But yeah, just based on not having quite as many people in there, it really frees up a lot more time for associates to have more meaningful engagement with consumers as well. And I think that’s really one of the big benefits to both consumers and the retailers themselves.
Greg Kihlstrom: Yeah, definitely. And so I do want to talk about the offline and online integration as well that you had highlighted earlier. This definitely seems to be growing in importance. I know from marketers are very focused on this omni-channel approach as well, but how can retailers effectively connect physical stores with digital platforms to meet these expectations that you know, a customer consumer may want to, you know, show up at a at a retail store, but not be able to whether it’s for weather or other reasons, you know, how, how can retailers effectively, you know, manage these expectations?
Joe Shasteen: Yeah, I mean, I think there’s, you know, a few ways that they could do that, at least, you know, from their own kind of programs too, right? If there’s like loyalty programs or certain things like that that they will have. But I think, you know, the main thing is kind of, you know, what I was discussing previously around, you know, providing the right deals and the right experience that’s going to give the consumer, you know, what they’re expecting, right? At this point, consumers are still looking for the right deal, right? The right discount. We saw conversion was up this year over Black Friday. We know there is pretty important for consumers to make sure that they were spending their money properly and being able to get the right discounts over the time period that they were looking for. So I think making sure that there are multiple options for them to pick up, right? So if they want to come in store and make the purchase that way, making sure those deals are also online, but also providing options for, you know, Bopas and what’s the incentive, again, to get them into the store so they can hopefully, you know, pick up more quickly. If there’s any last minute purchases that maybe they forgot about, you know, a new family member coming to, you know, the holiday that they weren’t expecting, so they need to go get a gift for them. Making it as convenient as possible for consumers to shop, whether that be building their cart online, getting recommendations online, right? If there is that loyalty program or they have purchased from you online in the past, you know, just allowing those carts or those sorts of recommendations to be built out so that the consumer is able to make better choices and more efficient choices is ultimately going to help to drive that loyalty and then going to have them continue to shop with the retailer in, you know, in the future, right? If they’ve had that good experience, they’re going to continue to want to have that experience. So that’s really, you know, where it’s important to drive Make sure those discounts are right. So you’re reaching your target audience. But then once they’re there, what are those other factors that are going to give them make customers feel loyal to the brand and want to come back in store and experience it again and make a repeat purchase? And those are the ways you’re going to be able to do that through the convenience factor and also providing those more personalized recommendations as well.
Greg Kihlstrom: Yeah, yeah. And then I guess layering the the, what we were talking about at the, at the beginning, be consumers being a little more deliberate, being more value conscious, you know, that’s not necessarily going away, even if, uh, you know, even if economy, you know, changes a bit or whatever, in addition to what you were just saying about the, the omni-channel approach, you know, what, what are some strategies that retailers can adopt to meet those expectations as well, you know, just being more deliberate and value conscious.
Joe Shasteen: Yeah, I think, you know, where possible, it’s kind of having those different options too, right? Like if there’s, you know, the different product lines or the different brands, you know, not all retailers will have multiple, you know, options like that, but where it’s possible to kind of provide a few choices, you know, you don’t want to have too much choice where it’s kind of choice overload and customers can’t make a decision, but having a few different options kind of in, you know, maybe the more premium and the more middle and the more low price is really going to allow you to have, you know, different customer bases and allow you to target as many people as possible, but then also allow you to create separate brands and not maybe dilute certain brands by having to discount heavily that’s going to have other sort of second-order effects on how people perceive that brand in the future. So that’s one thing that can really help is having those different options that’s going to allow consumers to have a choice, but then they can make more value conscious choices if they want to, But then also if someone wants to be spending more, being a little bit more of a luxury price point, you know, having those options too will also be really valuable. And again, appeal to as many consumers as possible without diluting the brand or diluting any of the discounts that might be coming in on Black Friday as well.
Greg Kihlstrom: Yeah. Yeah. So the show’s going to run on December 16th. So we’ve got a little, little time left in the year. I’ve wanted to get your predictions for the remainder of the holiday season, you know, based on what we’ve seen so far, what would you predict? And, you know, any, any categories, trends or other, other predictions for the remainder of the, of the year?
Joe Shasteen: Yeah. So I think based on last year’s trends, I think, you know, for Black Friday, I think we were predicting a little bit more positive trends. I think, you know, our range of expectation was kind of with what we ended up seeing about negative three. But, you know, we were thinking we could also see some slight growth just based on the holiday event shopping period and people wanting to get out and shop. So I think, you know, based on that and kind of what we’re seeing, I would expect the holiday as we get into Christmas, We’re going to start to see it ramp up at pretty much now as we get into the last two weeks before Christmas and Christmas Eve. So we’re starting to see traffic start to increase up beyond what we were seeing the last couple of years at this time. So I think what I will probably expect to see, though, more flat kind of trends of what we’ve seen. Not expecting any dramatic changes compared to what we saw last year. You know, Black Friday this year was negative three. I wouldn’t be surprised to see something in that range to maybe slightly positive as well. So, you know, not really going out too much on a limb there, but expecting year to date trends to kind of hold up. And then from a category perspective, I am expecting that health and beauty will bounce back a bit. I know for Black Friday, its trends looked a little bit more negative than expected, but I think that has to do with comping very positively over the last two years. So I do expect that health and beauty, at least compared to last year, over hopefully the course of the rest of the year, will continue to show some more positive trends. And then I’m just also really interested to see how the apparel and footwear trends do after their strong Black Friday, Cyber Monday weekend performance. I wasn’t quite expecting them to be kind of our top categories for the weekend, And then they kind of came through and really showed maybe that shift in the preference a little bit more to some of those staple goods. So I’ll be interested in seeing how that holds up as we get into the last two weeks before Christmas when those purchases are really being made and conversion really starts to increase for those consumers. But we’ll be fascinated to see how that segment does as well.
Greg Kihlstrom: Yeah, yeah. Well, always great to talk through the data here and love to hear your insights. One last question before we wrap up, something I like to ask all my guests here, what do you do to stay agile in your role and how do you find a way to do it consistently?
Joe Shasteen: Well, I’m very, very lucky that I have a great team of analysts who are very flexible in what they work. So we’re always trying to build out our tools and our processes to be as flexible as possible, be able to adjust on the fly as our customers need different analysis. So for me, it’s really relying on my team members who are great at kind of working working in our processes and, you know, working with our customers to analyze the data as quickly as possible for them as it’s, you know, very urgent right now, especially around the holiday season. So it’s really just trying to, you know, stay like you said, stay agile, stay flexible, not get too locked down to what you think your day is going to look like. And, you know, just be willing to prioritize on the move and, you know, working in a collaborative teams to identify what’s going to be the most value add and try to knock that out first and go from there.
