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The Four Winners (and One Loser) of Black Friday 2020
Black Friday. One of the most frustrating days of the year. Waiting in line at the crack of dawn hoping to score a big blowout deal on some of the newest techs at Best Buy, maybe land new outfits at Macy’s, or snag the sleekest appliances at Target. Why not all of the above? If 2020 taught us anything, it’s YOLO.
But Black Friday in 2020 was a different experience. I don’t know if you’ve heard, but there’s been this global pandemic going on for the better part of a year, and being in close contact with strangers is frowned upon. It’s hard to do Black Friday safely considering the Best Buys and Walmarts of the world usually look like a mosh pit at a grunge concert circa 1998.
Black Friday and Cyber Monday during a pandemic looked very different. But just how different did those shopping days look?
- Far fewer people swarmed stores the night of Thanksgiving, as traffic decreased 49% to brick-and-mortar stores compared with 2019.
- Black Friday became far more digital-driven, as ecommerce channels sold about 22% more compared with Black Friday 2019.
- Cyber Monday didn’t receive the same love, as sales only increased by about 9% compared with last year.
- And all of this is likely caused by the surge of ecommerce sales experienced in the entirety of November, which was just shy of a 70% increase from last year.
This isn’t totally unexpected though—plenty of brands launched digital-only sales for the entire month instead of just the period between Black Friday and Cyber Monday. As consumers have grown accustomed to online shopping since early 2020 and digital promotions were aplenty leading up to BFCM, a single day of online sales may not have been as attractive as it’s been in years past.
The Winners and Losers of Black Friday 2020
In a world where we want to believe that everyone is a winner, sometimes that’s not always true. After taking this month for the holiday shopping dust to settle, it’s now pretty clear which strategies and industries thrived in 2020, and which were barely treading water.
Winner: Online Shopping
If it’s not yet obvious, any semblance of shopping success was driven by ecommerce. With the pretty much unanimous switch to digital shopping over a longer period of time in lieu of cramming it into One Big Day, this ecommerce surge proved its staying power.
Consumers had been flocking to digital channels since the beginning of the pandemic and that didn’t slow down with the biggest in-store shopping day of 2020. Ecommerce thrived while, unfortunately, brick-and-mortar suffered. There is hope for in-person shopping, though, and we don’t anticipate its extinction anytime soon. It could even see a big lift post-pandemic when people will want to get “back to normal” as fast as possible, which means lingering in a crowded store with no mask and a coffee in hand. While a return to shopping shoulder-to-shoulder is expected during (a vaccinated) Black Friday 2021, expect to see the success of online shopping persist.
Winner: Omnichannel Shopping
There were plenty of options if you hit the buy button on a digital channel. You could buy online and pick it up in-store, request contactless curbside pickup, or have the goods sent straight to your door. You could buy on Instagram and Facebook marketplace or directly on Google. You get the picture — consumers aren’t just buying on large retail sites and marketplaces like Amazon or Target. The buy button exists everywhere.
Along with more ways to get your purchase, 2020 also saw more ways to pay. “Buy Now, Pay Later,” the (typically) interest-free way to pay for a purchase over several installments, became more popular this year. Many consumers have experienced financial difficulties due to the pandemic and the subsequent economic decline, but a lot of brands have made an easier path to purchase for those consumers by offering multiple ways to pay.
This move was especially critical during the holidays when a lot of purchases carry a hefty price tag. A good rule of thumb is to try and make it easier for people to buy your stuff, always, and BNPL is a smart solution for reducing friction.
Winner: Connection and New Hobbies
Smartphones did exceptionally well, increasing 25% year over year. Electronics in general typically do well on Black Friday and Cyber Monday, but 2020 showed an even greater demand for electronics and technology.
Toys also flourished at the end of the year, especially with hot-ticket items like LEGO and Hot Wheels. And if you thought you were going to get a Playstation 5 anytime soon, think again. The gaming console has been selling out in seconds on every inventory restock and its launch was the biggest gaming console launch ever. We’re a month deep into 2021 and it’s still largely out of stock everywhere. (Maybe it’ll also be the winner of Black Friday 2021?)
The fact that these verticals thrived during BFCM 2020 is no surprise. With more time spent inside and the increased need to connect with people by way of phone, tablet, or computer, many shoppers were looking to upgrade their tech and indoor hobbies. When we need connection within and between families now more than ever, modern games and tech made it possible.
Winner: Small and Local Businesses
Small and local businesses performed quite well during Black Friday and Cyber Monday. It’s worth noting that many consumers, businesses, and governments have encouraged shopping local and shopping with small businesses — both in general and for holiday shopping. Shop Small isn’t a new CTA for consumers, but it definitely hit a more personal and dire note this year with so many small businesses depending on any purchase they could render.
The ability to stay nimble and quickly adjust strategies was a benefit for smaller companies. Small businesses that pivoted to online sales excelled during the 2020 holiday season and experienced a 110% increase in online sales, which means consumers are showing up (and paying up) at their local businesses.
Loser: Profit Margins
People just weren’t going inside stores nearly as much this year. According to Sensormatic Solutions, 65% of consumers expressed concern about shopping in stores this holiday season. The numbers showed and in-store retail suffered. With so much of the buying action happening online, brick-and-mortar brands’ profit margins suffered this year.
With higher shipping and handling costs, more expensive returns, and lower margins online, profits took a hit—especially if you’re a merchant still paying high rent on a brick-and-mortar location that’s not pulling its weight. Many retailers were concerned that the Black Friday weekend would fail at actually getting them into the black at the end of the year, which was—as it was for all of us—an already incredibly tough slog pre-holiday season.
Resetting for Success in 2021
With a vaccine being distributed globally, there finally seems to be a light we can all see at the end of the coronavirus tunnel. Soon (fingers crossed) stores will be buzzing with shoppers again—all taking their time wandering up and down aisles, browsing through entire departments, and waltzing around as mask-free as the day they were born. Even when all brick-and-mortar doors are thrown open, though, the prevalence of ecommerce in our “new normal” isn’t likely to die down.
The strategies and tactics adopted throughout 2020, and culminating in the holiday shopping season, need to stick around and be improved upon in 2021. When in-person shopping resumes, that is definitely not the time for merchants to throw out the structures and processes that were propped up thanks to the pandemic.
No one was quite sure how Black Friday and Cyber Monday of 2020 was going to pan out; was economic uncertainty going to keep wallets closed, or were people going to spend in order to keep traditions going, spread very necessary holiday joy, and keep small brands afloat? We’re lucky that the latter happened for ecommerce. And if the same resilience, agility, and digital-first processes persevere in 2021, odds are good the holidays will be bigger than ever.