Real Estate Indicators by Eric Kathrein in HFF’s San Francisco office.
Thanksgiving Day and Black Friday this year were record breaking with retailers reporting $9.9 billion in sales across the two-day period, which is a 25 percent increase over 2017. Cyber Monday has also turned out a banner performance with $7.9 billion in sales, marking a 19.7 percent increase year over year. This year’s Cyber Monday was the largest online shopping day of all time in the U.S. Both figures are according to an Adobe Analytics report released this week.
However, the real story is that Black Friday and Cyber Monday are no longer competing events pitting online retailers against traditional brick and mortar. Instead, Black Friday marks the beginning of a four-day shopping marathon ending with Cyber Monday, and the real winners are omnichannel retailers.
As Aaron Johnson discussed in HFF’s Black Friday analysis, ICSC (International Council of Shopping Centers) estimates 80 percent of shoppers spent money with omnichannel retailers either in person or online. Additionally, Adobe Analytics reported that over the holiday weekend, “buy online, pick-up in-store” or “click and collect” saw an increase of 50 percent year over year.
The Adobe report also noted sales coming from people shopping on their smartphones hit an all-time high of $2 billion, which is an increase of 16 percent year over year. Overall, mobile “represented 51.4 percent of site visits (43.6 percent from smartphones, 7.8 percent tablets) and 34 percent of revenue (26.3 percent smartphones, 7.7 percent from tablets), making it the first Cyber Monday where more than half of visits came from mobile.”
The result for these retailers was high traffic at their physical locations during the holiday weekend, and then on Cyber Monday they received an additional boost. ICSC reported 96 million adults visited a mall or shopping center on Thanksgiving and 111 million did so on Black Friday. These visitor numbers represented an increase of about five percent from one year ago. According to ICSC, millennials were the biggest spenders over the four-day weekend, spending on average $547 each. They were followed by Generation Xers, who spent $488 each, and then baby boomers, who each spent $259. So, by embracing both a strong physical and online presence and providing multiple avenues for customers to spend, omnichannel retailers are reaping the rewards.
The sales and visitor figures from this holiday weekend serve to reinforce the importance and relationship of having an online and physical presence. ICSC released a report earlier this year titled “The Halo Effect: How Bricks Impact Clicks,” which took a deep dive into this relationship. In one notable case a retailer noticed a decrease of 77 percent in online traffic in a market where they closed a store. What this means for commercial owners is that as retailers evolve to meet consumer demands, physical stores will continue to play a major role in their success.
Mr. Kathrein joined the firm in December 2016. Mr. Kathrein is an active member of NAIOP and is on the ICSC Next Gen Planning Committee. Additionally, he is co-founder of the Cal Young Alumni Blue & Gold Bash, which created formal programming for young alumni engagement, and for which he received the UC Berkeley Alumni Association Bradford S. King Award for Excellence in Service in 2015. He previously served on Jill’s Legacy, an advisory board to the Bonnie J. Addario Lung Cancer Foundation.
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