For some, shopping on Black Friday is a rite of passage that kicks off the holiday shopping season. For others, it’s lunacy. And a growing number of consumers are changing the shopping season by asking why brave the stampedes at all when their mobile devices work just as well.
According to e-commerce giant PayPal, its Black Friday mobile payment volume increased 62% year-over-year in 2014. Mobile payments volume during Thanksgiving Day grew as well, by 47%, with the peak volume occurring between 4:00-5:00 p.m. What this uptick in mobile spending signifies, perhaps, is a new normal in the holiday shopping season. Consider the following:
Total U.S. retail sales increased 2.3% in November 2014 (SpendingPulse).
Total U.S. retail sales without auto or gasoline sales increased 3.6% in November 2014 (SpendingPulse).
From Nov. 27-Dec. 1, 2014, credit spending increased12.97% year-over-year (TMG)1.
From Nov 27-Dec. 1, 2014, electronic spending increased 24.7% year-over-year (TMG)1.
Black Friday accounted for 42.03% of all credit card transactions (TMG)1.
On average, the cardholders spent more on Black Friday, $147.63, compared to Cyber Monday, $131.45, and Thanksgiving, $111.54. (TMG)1.
Thanksgiving day debit card spending increased the most, 14%, compared to last year (CO-OP Financial Services; Saylent)2.
It might not be surprising that of all the holiday shopping days, the largest amount of consumer activity occurred during Black Friday.
But what about the last two points?
The average credit spend on Thanksgiving was $111, and debit card usage was way up over 2013. Looks like the holiday is no longer one of mere caloric overindulgence. People are also doing some serious shopping.
The early returns of the 2014 holiday shopping season highlight more than a few trends, including: more money being spent, more mobile transactions being conducted, and increased spending on non-traditional days like Thanksgiving.
With more money up for grabs and more purchasing platforms than ever before, the window into the holiday shopping season has been blown open. To stay competitive, retailers are offering deals earlier than ever before.
This past Thanksgiving, both Kmart and Radio Shack opened before 9 a.m. The two struggling businesses hoped to boost business by opening before competitors, but other retailers will follow its lead.
PayPal is seeing the volume of mobile payments start to increase as early as the end of September as retailers become better at attracting customers with push notifications, native advertisements, and other mobile features.
“Mobile is making it cyber month, not Cyber Monday,” Pablo Rodriguez, head of global consumer initiatives at PayPal, told Bank Systems & Technology. “We see a lot of merchants getting ahead of Black Friday and offering deals earlier. We put a stake in the ground saying that the holiday shopping season actually starts September 30.”
According to the USA Today, the best in-store deals peak on Thanksgiving while cyber deals start well before and end well beyond Cyber Monday. In fact, savings don’t officially end until Super Saturday, the Saturday before Christmas. The holiday shopping season has lengthened.
As mobile devices become more powerful and immersive, we will rely on them more than ever. A mechanism for calling, texting, and emailing has become a device for Internet usage, social communications, and in-store payments. In the near-term, mobile devices will offer more convenience than any other piece of technology. In the long-term ... who knows?
Application interconnectivity will continue to grow, and targeted advertisements are simply the tip of the iceberg. Facebook's new Buy button allows users to complete an entire purchase through Facebook. And Home Depot and Burberry offer the ability to purchase items through Twitter.
What will 2015 bring?
1Data based on users who carry credit cards issued by TMG’s financial institution clients.
2Data based on debit activity at 20 different merchant types nationwide by members of credit unions that use CO-OP for transaction processing.