Black Friday has come and gone, and another historic year of sales is in the books. Let’s use our financial fluency tools to take a closer look at the market impact of the one time during the holiday season when your wallet actually thanks you.
Transfer of Power
Retail store sales have continued to take a severe dip this year as e-commerce giants like Amazon (AMZN), Alibaba (BABA), and Shopify (SHOP) have threatened to put brick-and-mortar stores out of business. In 2016, foot traffic on Black Friday was at 99.1 million people, dropping from 2015’s number of 101 million.
This trend is expected to continue this year as the number of customers who deal with the long lines and late-night chaos of Black Friday’s in-person deals continues to decrease. Customers are taking the night off and looking towards the online world of savings to help out their holiday season budgets.
In 2016, Thanksgiving online sales amounted to $1.93 billion compared to Black Friday’s $3.34 billion. They are expected to jump to nearly $2.8 billion and $5 billion respectively in 2017.
Customers enjoy the ease of ordering from home, and it is reflected clearly in transfer of sales over the past several years.
But how are the market movers responding to these trends? Let’s take a deeper look as we inch closer towards understanding financial fluency.
The Ever-Changing Industry
Some retail giants, like Wal-Mart (WMT), are attempting to curb this trend by attacking it head-on. In August 2016, Wal-Mart purchased Jet.com for $3.3 billion in an attempt to compete with Amazon’s ever-growing customer base. The transition from brick-and-mortar shopping to online retail has forced historically-engrained companies in the industry to test out new tactics.
As technology continues to advance, the world of online retail has become increasingly more popular. Black Friday used to be symbolized by long lines and crowds of people waiting for the cheapest time to buy an X-Box all year. However, the holiday has quickly become overshadowed by its online, weekday successor, Cyber Monday.
Shares of Amazon, Shopify, and Alibaba all increased heavily during the holiday week of savings, but their biggest day comes today, when consumers are predicted to spend about $6.6 billion online, outspending their Black Friday counterparts by a cool $1.6 billion.
It seems the ease and scale of online shopping has transformed holiday season spending habits, turning what used to be a field day for retail stores into a battle between e-commerce titans.
By understanding the market trends of seasonal periods, we can step closer to achieving financial fluency and continue to invest smarter, together.