Black Friday Online Sales Officially Pass $5 Billion

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Software firm Adobe, which tracks online holiday sales by day, forecast Black Friday e-commerce sales would top $5 billion. They did. According to Adobe’s survey of 80 of the web’s largest online retailers, Black Friday revenue reached $5.03 billion, up 16.9% from the same day a year ago.

E-commerce sales have risen in double digits most years since The Great Recession. The Adobe figures do not tell much directly about bricks and mortar sales. However, if earnings forecasts from retailers like Macy’s (NYSE: M) and J.C. Penney (NYSE: JCP) are any indication, they are nowhere near the double digit range. As a matter of fact, their same store sales may have fallen.

The Adobe Analytics information showed, in specific:

…a record $5.03 billion was spent online by the end of Black Friday, an increase of 16.9% YoY (Black Friday 2016 totaled $4.3 billion in spend). Black Friday spend is in-line with Adobe’s forecast earlier this month – Adobe predicted $5 billion in spend for Black Friday. The holiday season to date (Nov 1 – Nov 24) shows $38.3 billion in online shopping revenue, 17.8% growth YoY. This is just over Adobe’s prediction by $0.7 billion. The early hours of Small Business Saturday have seen $0.32 billion in online spend (10.0% growth YoY) as of 10am ET. According to a survey Adobe conducted, 49% of shoppers somewhat agree or strongly agree that they will support small business this season; women are slightly more likely than men to agree.

In another blow to traditional retailers, a great deal of the Black Friday shopping was done on smartphones. Smartphones sales delivered 54.3% of visits and 36.9% of revenue for the day. Although Adobe does not track it, one of the most troublesome consumer habits of the last several years is called “showrooming”. Consumers go to stores, find the items they want, and then compare prices online. If the store they have visited to see an item does not have the lowest price, consumers are likely to buy it somewhere else online. Increasingly, that place has become Amazon (NASDAQ: AMZN)

Ironically, as e-commerce buying has moved away from computers to smartphones, computers are among the categories with the largest discounts for holiday shoppers. Adobe analytics reports:

As of Black Friday, highest discounts are in computers (discounted 15.9% on average), followed by TVs (down 21.6%) and toys (down 17.3%).

Adobe expects the steep discounts on toys to continue, which will make rough sledding for Toys “R” Us, which recently went bankrupt, and any other retailer which relies on toys for a large portion of its total revenue

As holiday online sales race toward another record year, the fate of bricks and mortar companies becomes more precarious by the day. It is a trend which has been expected. The Adobe research shows how likely the problem is to accelerate