Black Friday impacts changing shopping habits

When Harley Finkelstein of Shopify Inc. surveyed the retail landscape in November, she found it hard to understand where Black Friday ended and Cyber ​​Monday began.

Annual pre-holiday sales aimed at encouraging customers to drop cash on discounted merchandise have failed together in recent years. Online retailers are offering Cyber ​​Monday deals weekly or monthly.

“Black Friday/Cyber ​​Monday used to be a weekend, but now it’s a season,” said the president of the Ottawa e-commerce giant.

Many in the retail industry feel the sector will be even more blurred this Cyber ​​Monday as the COVID-19 health crisis continues to reshape shopping habits.

Online shopping has surged during the pandemic, when stores have temporarily closed and people are stuck at home.

As measures to contain the virus eased, many people continued to shop online, but not as much as some brands expected.

Lisa Hutchison, managing partner of JC Williams Group, a consulting firm, said, “The popularity of online shopping was clearly boosted by the pandemic, but it’s actually declined as people have returned to stores.

“In fact, e-commerce spending is down 11.5% year-to-date.”

The return of consumers to brick-and-mortar stores has caught Shopify off guard, relying on online shopping that continues to accelerate at the pace of the pandemic.

“Clearly the gamble has paid off,” Chief Executive Tobi Lutke said in a statement in July, announcing that the company would lay off 10% of its workforce as a result of the error of judgment.

The company’s stock has traded as high as $212 over the past year, but has recently averaged close to $50.

That’s why so many people are riding during Black Friday/Cyber ​​Monday weekend.

“Black Friday/Cyber ​​Monday is like our Super Bowl,” said Finkelstein. “Now the culture and energy of the company is very high.”

A survey of 24,000 consumers and 9,000 small businesses worldwide by his company found that 59% of Canadians plan to spend the same amount or more on Black Friday and Cyber ​​Monday weekend than they did last year. It turns out that Between the ages of 25 and when he was 34, this figure he rose to 74%.

Finkelstein finds it difficult to predict what the weekend will look like, but believes it will be very different from last year, when the country was consumed by product shortages and an omicron wave of COVID-19.

“This year’s Black Friday/Cyber ​​Monday seems to be a lot less enthusiastic than last year,” he said. “Fewer supply chain issues, more physical stores, more inventory. Better capacity planning for shipping companies.”

However, there is a new problem. Inflation remains high.

“Consumers have tightened their belts a bit” in recent months, said Michelle Wasylyshen of the Canadian Retail Council, but they still plan to spend about $790, the same as last holiday season.

“The difference this year is that they’re looking for more meaningful or practical gifts,” she wrote in an email. I may reduce the number of gifts per person, but I’m going to do some shopping.

Finkelstein also foresees a more cautious approach.

“They may not be able to buy five things they have a mediocre love for. They may buy two things they really want,” Finkelstein said.

“And they may also be thinking about how to buy… Will there be discounts? I’ll wait until Thursday night or Cyber ​​Monday.”

The term Cyber ​​Monday was coined by the National Retail Federation in 2005. This comes on Monday after Black Friday has brought a huge spike in online sales and traffic over the past two years.

“We won’t see the same spikes that we’ve seen in the past,” Hutcheson predicts.

Part of that prediction is from the expanded shopping windows, but also because some people will stick to their online shopping pandemic habits.

Following the trends set in 2019 and 2020, Moneris predicts that Cyber ​​Monday will be the busiest day for online shopping. However, Black Friday is still expected to be the busiest day in terms of total deals and spending across all media.

Hutcheson said it will roll out as an “omnichannel view” this week.

Omnichannel is an industry term for making shopping seamless not only in physical stores, but also online and on mobile platforms.

Finkelstein likes the term because the retail industry is “no longer online versus offline.”

“Saying that omnichannel is a strategy will soon be similar to color TV,” he said. “It’s the norm and consumers are shopping everywhere and everywhere.”

This report by the Canadian Press was first published on November 25, 2022.

Company in this story: (TSX:SHOP)