Tuesday, 2 December 2014

Why Black Friday Sales Drop Might Be a Sign of Digital Transformation

The National Retail Federation (NRF) reported that US retailers showed a reduction in "Black Friday" spending, with sales falling 11% from the same period last year ($50.9bn down from $57bn). In the same report US consumers spent on average $380.95 per person, down 6.4% from a year ago. On Monday reduced sales actually impacted Apple shares with a drop of 6.4% to $111.27 in the first 30 minutes of trading Monday.

So what's actually happened? Well, the figures are not all in, especially for the whole season, but what we might be seeing is a shift from a domination by physical retail outlets to online as part of the digital transformation of holiday season retail. As digital matures this is accompanied by a shift from surge shopping to an expectation that products will be available and delivered on demand and that online shoppers can wait later in the season . The idea that prospective shoppers might camp out over the Thanksgiving holiday in an effort to secure a place in front of the line and thus a better chance at getting desired items is falling back into history in much the same way that similar lines for luxuries behind the iron curtain has.

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