Is Black Friday’s Importance Waning for Brick-and-Mortar Retailers?

Black Friday sales have traditionally been used as a success metric to track the strength of the retail industry, but as consumers do more of their holiday shopping online, sales trends have started to shift. Small Business Saturday and Cyber Monday are increasing in popularity, expanding the peak shopping period for both online and offline stores, and brick-and-mortar retailers are working harder than ever to capitalize on evolving foot traffic patterns.

To better understand how these changes in foot traffic might influence holiday sales this year, data scientists at Foursquare analyzed foot traffic trails from U.S. users of its Foursquare City Guide and Foursquare Swarm apps and websites. Foursquare’s team looked at patterns of activity leading up to Black Friday in 2015, when brick-and-mortar retailers saw a decrease in foot traffic compared to the year before, and found that Black Friday sales at physical retailers this year may not be as dire as some have predicted.

“Foursquare’s proprietary stop detection technology has helped us to create our robust map of the world and allows us to understand how people have moved through cities and places all year long,” says Steven Rosenblatt, president at Foursquare. “By combining signals like GPS, bluetooth, wifi and more, we can understand — anonymously and in the aggregate — that people are shopping at department stores or at big-box stores more this year than last.”

Because retailers haven’t suffered the same losses in the weeks leading up to Black Friday in 2016 as they did in 2015, Foursquare is predicting that U.S. retailers will only see a small drop in foot traffic (down 3.5%) compared to last year. Certain retail categories, such as big box and discount stores, are expected to see increases in foot traffic compared to last year.

Foursquare’s data shows that this year’s Black Friday may be the beginning of an upward trend for department stores, with foot traffic increasing year-over-year. According to Foursquare’s analysis, Marshalls, Dillard’s, Macy’s, Lord & Taylor, Saks Fifth Avenue, and Neiman Marcus have all seen stronger foot traffic patterns than industry competitors in the most recent two months, and they can expect better-than-average lifts in year-over-year foot traffic. Like discount stores, department stores are likely to see larger gains later in the holiday shopping season.

These late season gains are expected to become even more pronounced as more retailers integrate “reserve in store” and “ship to store” features on their e-commerce sites, according to Oscar Sachs, CEO of Salesfloor, a platform that allows consumers to shop at local stores online.

“When shoppers do eventually visit the retailer’s brick-and-mortar location, it won’t look like the typical visit and will likely be the last part of their path to purchase journey,” Sachs says. “Instead of shoppers coming in to browse and then make a purchase, many will visit stores to pick up items they already purchased online or to touch and feel products they’ve already researched or have been recommended by sales associates online.”

Even if they don’t adopt any new in-store marketing technologies before the holidays, Foursquare’s Rosenblatt says he hopes his company’s foot traffic analysis will give brick-and-mortar retailers a better understanding of the overall trends within the industry, as well as how specific retail categories are performing this year.

“Individual retailers can benchmark themselves against their category or competitors and use the trends to better plan their holiday promotions,” Rosenblatt says. “Are you in a category that sees spikes in foot traffic later in the season? Perhaps that’s an opportunity to ramp up advertising and promotions early in the season when there’s a lag in store visits.”

Stephanie Miles is a senior editor at Street Fight.