This year, Black Friday in the United States marked a significant increase in online sales, reaching a record $9.8 billion, which is a 7.5% rise from the previous year. A notable shift was observed in consumer behavior, with over half of these sales, amounting to approximately $5.3 billion, coming from mobile purchases. This change underscores the growing influence of mobile shopping, fueled by social media advertising and influencers. Adobe's report, which primarily tracked online shopping, highlighted that while in-store purchases slightly increased by just over 1%, the surge in e-commerce sales by 8.5% illustrates a clear preference among consumers for online shopping. The trend of buying online has been accelerated by the pandemic and changing consumer habits, moving away from traditional in-store Black Friday experiences.
Contrastingly, according to the Chinese sellers, Amazon's Black Friday sales underperformed, particularly due to the competitive pressure from emerging e-commerce platforms like Temu and Shein. The extended duration of Black Friday promotions on Amazon, which was the longest ever this year, did not translate into increased sales. Many sellers, especially in categories like household supplies and small home appliances, reported their worst Black Friday performance, with orders and sales not meeting expectations and advertising costs soaring. Factors such as consumer fatigue following Amazon's Prime Day and longer promotion periods leading to less impulsive buying contributed to this slump. Additionally, aggressive discounting and promotions by competitors like Temu and Shein made Amazon's offerings less appealing price-wise, impacting the profitability of sellers on the platform.
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Retail sector companies conducting marketing campaigns for Black Friday historically tend to perform better than the rest of the market in the period leading up to Black Friday. However, this year, we observed a rebound across the broader market. As a result, the returns of retail sector companies are not significantly higher compared to the S&P 500 index. However, they are considerably higher than the historical returns of the last 20 years. The study included 26 of the largest companies operating in the retail sector.
A comparison of returns for companies before and after Black Friday, averaged over the last 20 years. The analysis took into account 26 companies and selected the top 10 with the highest rate of return in the period leading up to Black Friday (inclusive).
