Black Friday Report for CyberMonday

I have expected retail this season to be late and sales-driven. Early reports from Black Friday bear this out. The investment implication is not to draw too many inferences from early data, and not to apply historical trends to this ahistorical moment.

The media reported that sales were up slightly from last year; but Barry Ritzholz properly cautions that “Every year, various groups — NPD, Retail Federation, Shopper Track, and others — release this weak ass data that is almost never correct. And each year, the press laps it up like manna from heaven.” Karl Denninger goes on to show how far off some prior flash estimates have been.

The chart from the Natl Retail Federation shows that while foot traffic was up, sales per shopper was down. Overall sales are estimated as essentially flat – the tail on the green line. The report goes on to comment that “Shoppers … were willing to open their wallets for a bargain … .” Other reports agree.

What is most interesting is that CyberMonday – the hunt for bargains online after Black Friday – seems to have started early. In the past this might have come from a dearth of home broadband – in other words, fake working on Monday and get on the office broadband to shop. Now home broadband is fairly ubiquitous. Instead, it may be due to relatively low inventories in retail. Much of the CyberFriday traffic was late in the afternoon into the evening. Hunt for bargains during the morning, go check online in the afternoon. Still, the cyber traffic report also concluded that the web sites were able to handle the increase, which suggests it wasn’t that large.

We shall see if the real CyberMonday spikes higher, or not. I suspect not, as this season will be late as shoppers wait for bargains.

About Duncan Davidson 228 Articles

Affiliation: NetService Ventures

Duncan is an advisor to NetService Ventures, where he focuses on digital media and the mobile Internet.

Previously he was at four start-ups: Xumii, a mobile social service based on a Social Addressbook; SkyPilot Networks, the performance leader of wireless mesh systems for last-mile access, where he was the founding CEO; Covad Communications (Amex: DVW, $9B market cap at the peak), the leading independent DSL access provider, where he was the founding Chairman; InterTrust Technologies ($9B market cap at the peak), the pioneer in digital rights management technologies, now owned by Sony and Philips, where he was SVP Business Development and the pitchman for the IPO.

Before these ventures, Duncan was a partner at Cambridge Venture Partners, an early-stage venture firm, and managing partner of Gemini McKenna, a joint venture between Regis McKenna's marketing firm and Gemini Consulting, the global management consulting arm of Cap Gemini.

He serves on the board or is an adviser to Aggregate Knowledge (content discovery), Livescribe (digital pen), AllVoices (citizen journalism), Xumii (mobile social addressbook), Verismo (Internet settop box), and Widevine (DRM for IPTV).

Visit: Duncan Davidson's Blogs

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