In my retail blog post a couple of weeks ago, I explained why we should expect another disappointing holiday season at the mall. As mentioned before, retail sales are at new peak levels, but it’s primarily the sales leakage to online shopping that contributes to the numbers. In fact, online shopping continues to accelerate despite industry expectations (or wishful thinking) to the contrary.
Well, the early holiday numbers are in, and they did not surprise. Just ten years after online retailers banded together to create Cyber Monday, this new shopping event is starting to challenge Black Friday for sales supremacy. ShopperTrak estimates that sales in stores on Black Friday fell more than 11% from $11.6 billion in 2014 to $10.4 billion this year. Sales fell on Thanksgiving as well, probably due in part to the growing backlash against commercial encroachment onto the holiday.
Meanwhile, online shopping soared. Adobe Digital Index reported that Cyber Monday shopping this year reached $3 billion, up 16% over 2014, in addition to another $2.7 billion in online sales on Black Friday. But perhaps the most interesting and telling statistic of the Thanksgiving weekend is that slightly more people shopped online on Black Friday instead of going to stores, according to the National Retail Federation.
Putting it all together: though sales gains overall this holiday season will remain moderate, expect most of the growth to be skewed sharply towards e-commerce—as predicted.
Andrew J. Nelson is Chief Economist for Colliers International in the United States. Based in San Francisco, he covers a mix of general economic topics as well as related issues that bear on the performance of property markets.