Is Hype Around Black Friday and Cyber Monday Blinding You to the Bigger Seasonal Spending Picture?

As everyone within the industry is painfully aware, two days matter substantially more than most when it comes to online apparel sales. Even a brief glance at the average annual sales chart shows that Black Friday and Cyber Monday are genuine outliers in terms of total consumer spend, and have the potential to make or break your retail year.

With the annual media and marketing frenzy surrounding these twin spending peaks, it’s no surprise that they tend to dominate the thoughts of consumers, retailers, and industry analysts alike. There is, however, a wider seasonal spending picture hiding behind them – one that we’ve been exploring by digging a little deeper into average daily sales volume throughout the year.

Daily Sales Volume Segmentation Reveals the 4 (Hidden) Stages of Holiday Spending

We recently pulled figures for three leading US brands in 2015 to get more of a feel for the momentum of consumer spend throughout the year, and how it manifests itself over the holiday season in particular. As expected, we saw major spending peaks around Black Friday and Cyber Monday, with high volumes continuing on up to Christmas. Segmenting the year by average daily sales, however, revealed a more distinct set of holiday spending stages.

Average daily sales segmented by volume.
Source: Fit Analytics sales data from 3 major US brands, 2014–2015.

Based on the three brands studied, we saw a clear four-stage sequence emerging:

  1. Approach: Average daily sales pick up noticeably from as early as the beginning of November.
  2. Take-off: Consumer spend soars in the week around Thanksgiving, Black Friday, and Cyber Monday.
  3. Flight: Once those wallets are fully open, significantly elevated spend continues throughout the bulk of December.
  4. Landing: Things finally come back down to earth between Christmas Day and New Year’s Eve.

Interestingly, a quick breakdown of average order value and returns during those periods suggests that it’s not just a sales volume story we’re looking at here – quite different consumer psychology and purchasing patterns are also potentially at play.

Share of annual revenue by holiday shopping stage.

As we can see above, the Approach stage for the three brands studied was marked by a noticeable uptick in both average order value and rate of return. The Landing period, by contrast, stood out for both its lower average order values and a significantly lower return rate.

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Naturally, we should be wary about reading particular root causes into those figures, but there’s plenty there for e-commerce managers, marketers, and operations people to ponder in the context of their own setups. One of the most immediate questions, for example, would be – how well are you actually tracking sales and returns data throughout the most crucial part of the retail year?

With that potentially awkward question hanging in the air, let’s focus in a little more on the pre-Thanksgiving side of things.

Shoppers Are Ready to Splurge Well in Advance of Thanksgiving

One of the most intriguing e-commerce opportunities opened up by our analysis is the length of what we’re calling the Approach period. With a near tripling of average daily sales observable post-Halloween, it’s clear that shoppers are more than ready to crack open their wallets well in advance of Black Friday.

As Salon recently noted, this phenomenon largely tallies with the story around holiday spend that the National Retail Federation has been pushing for quite some time. Though the NRF has come in for fairly vocal criticism about the methodology behind some of its holiday season data in the past, they do seem to be ahead of the curve on this one.

From a retailer and brand perspective, two key questions about this Approach period instantly spring to mind:

  1. Are you leaving money on the table through excessive focus on the “traditional” start of the holiday season around Black Friday?
  2. Is there a way of maximizing value throughout November without the risk of antagonizing customers through “Christmas creep”?

Naturally, the answers to those questions will vary wildly from company to company but, as we’ll shortly see, they’re questions that are very much worth asking.

It’s a Shopping Marathon, Not a Sprint

When we looked at our four stages in terms of percentage of annual sales, we found this three month period accounting for over 50% of the yearly total. Zooming in a little more, we can see why the period around Black Friday reliably grabs the holiday spending headlines – nearly a quarter of that sub-total is accounted for in little less than a week during our Lift-off stage.

Average apparel order value and return rate by holiday spending stage.

Shops pinning all their hopes on that period are likely to be disappointed, however. As the relative breakdown of overall spend above shows, they’ll need to be on their toes both well before Black Friday and, to an ever greater degree, in the three weeks after Cyber Monday. Drop the ball in either department and a potentially terrifying amount of annual revenue could be walking out the door.

We’ll be diving into holiday spend data in considerably more detail over upcoming months as it’s an area where the true bottom line value delivered by our sizing solution comes into particularly sharp focus. In particular, stay tuned for more analysis of the crucial role returns play throughout this period.

If you’d like to share our findings around e-commerce holiday spending stages, we encourage you to download and share our report. If you’d like more detail about how our size advisor can help you move the needle through each one of the four stages and beyond, get in touch with us directly or sign up to our newsletter today!