Vancouver-based think tank DIG360 partnered with Leger this year to produce the latest, definitive insight on Canadian reactions to retail Black Friday promotions. These reports have been conducted immediately after Black Friday weekend annually since 2010, filling critical gaps in understanding of this major shopping event, while debunking myths arising from anecdote and speculation. The latest study finds that Black Friday has grown substantially in popularity since its meager beginning in 2009 in Canada, and is now being one of the biggest shopping events of the year in this country.
The study specifically notes that Black Friday is now ubiquitous in Canada, with 30% of 1,578 Canadian adults surveyed between November 28 and December 1 having bought at least one Black Friday bargain in 2016. The remaining 18% browsed without purchasing (compared to 24% in 2015). Notably, 25‐44 year olds have caught up to 18‐24 year olds in Black Friday participation, including online.
Retailers have been sharing mixed results. The study notes that for those retailers who think Black Friday weekend traffic was up over 2015, the following variables should be considered:
- Are retailers looking at a day, a weekend, a week or a month of promotions? The study tracks shopper reaction to any perceived Black Friday promotion at any time and shopping was spread over a longer period in 2015.
- Is the number of transactions up? The dollars spent? Both? If so, the study would then conclude a smaller group than last year is transacting more and/or spending on higher priced items.
- Are all stores and channels up in transactions? The study notes differences by region (BC traditionally trends lower in participation, and Alberta has rebounded this year).
- Is web traffic up, but online sales less so? The study captures both sales and browsing/research in its data.
Since 2015, Black Friday is starting early and blending into December
The study notes that retailers have actually been offering Black Friday deals much earlier, beginning in 2015. Over half (54%) of respondents reported first seeing Black Friday deals on or before the second week in November. Of those who bought deals, 43% began buying before the Black Friday Weekend. This finding supported the DIG360 prediction that Black Friday would continue to diffuse into an ongoing cycle of deals from late October through to Boxing Week.
“A rise from 25% to 44% of Canadians purchasing deals in 2015 coincided with the first time there was an extended season; we see 30% in 2016 as a settling in overall participation in Canadian Black Friday", says DIG360 Principal David Ian Gray, “and make no mistake, with 17% of us waiting until November 25 to begin to buy the deals combining with those ongoing shoppers, this is a significant weekend for Canadian retail and a major indicator of prospects for individual retailers this Holiday Season.”
Avid Bargain Hounds drive shopping, while others disconnect as deals underwhelm
The study notes that this year saw the highest level of Canadians (51%) ignoring Black Friday entirely since 2012, due to a reduction of ‘window shoppers’ who are only browsing. Mr. Gray’s theory is “many of these are not the avid bargain hounds, and they believe through past experience they will get better deals later on in December.We expect that a significant number are simply averse to the promotion-‐driven hype and not browsing; this shopper is likely to sit out Boxing Day as well," he said.
The data complements anecdotal reports that shoppers are not seeing the deals expected given the pre‐Black Friday ‘hype’ of past years, and whispers that some vendors are refusing to offer promotional discounts for both Black Friday and Boxing Day. Canadians who made purchases rated Black Friday deals 7.1 out of 10 (17% rated it less than 6.0) while those who browsed without buying rated only 5.8 (38% rated less than 6.0). This is the first time that DIG360 has utilized this metric, and will continue to track it in future.
Online Black Friday gaining momentum, especially for browsing
Mr. Gray notes that online Black Friday activity has caught up to in‐store purchasing, “of those buying promotions, 40% bought or browsed in-‐store only, 39% online only and the rest did both," says Mr. Gray.
Of the browsers who did not end up buying on Black Friday, 71% still perused websites, supporting the Canadian trend of researching products before making purchases. That said, only 4% of consumers bought deals via 3rd party Black Friday deal websites in 2016, with a further 10% of non‐buyers browsing those sites. This was the first year that the study tracked this behaviour, as well.
“Stepping back from 2016, one of the more interesting long-‐term trends in our data is the shift in Canadians browsing or buying from stores to online Canadian websites for Black Friday sales”, notes Mr. Gray. In 2013, 38% of Canadians shopped (browsed or bought) at a Canadian website for Black Friday deals, and this proportion has grown steadily to 56% this year. This has come at the expense of physical stores, which has seen a shift in activity from 73% in 2013 to 48% in 2016. Mr. Gray said that he believes this could be a sound proxy for overall trends in online shopping in Canada, at least for Holiday promotions where many shoppers are averse to the crowds.
Canadians shopping Black Friday from US is flat online and down cross‐border
The study found that while the percentage of Canadians browsing or buying deals doing so from US websites peaked in 2015 at 21%, it's still fairly constant at 19% this year, despite the poor Canada/US exchange rate. And cross‐border store shopping, while always a small minority of Canadian shoppers, has expectedly declined from its peak in 2014.
Cyber Monday becoming less relevant to Canadian shoppers
Black Friday has blended into Cyber Monday -- the latter was created in the Unites States in 2005 to draw attention to emerging internet retailers, while providing an alternative shopping day to physical store Black Friday.
The study notes that Cyber Monday is becoming less relevant to Canadians given the breadth of Black Friday deals offered online -- 13% of Canadians bought Cyber Monday promotions, while 21% browsed those deals without buying. Two‐thirds of Black Friday buyers were finished by Cyber Monday; they either didn't participate, or browsed without buying. Leger’s Sandie Sparkman added, “Canadians are still less aware of Cyber Monday (at 94%) than Black Friday at 99%; notably in French Canada with 10% unaware”.
Black Friday Buyers rated Cyber Monday deals lower at 6.6 out of 10.0 (28% rated them less than 6.0). And interestingly, a full 76% of Canadians do not recognize a difference between Cyber Monday and Black Friday deals.
Black Friday disrupts traditional timing of Seasonal shopping, does not increase buying
The study notes that many of the sales made on Black Friday are simply a shift in when shoppers are buying, as opposed to an overall “lift” in sales across the Holidays. The study found that 28% of Canadians who bought deals had postponed purchases this fall until they could see what Black Friday offered, for example.
Black Friday is also the time for self‐gifting, noted the study, with 41% of Canadians browsing or buying on Black Friday weekend doing so mostly for themselves -- which is more likely to impact Boxing Day than gift buying for others in December. Only 37% of 2016 Black Friday buyers, largely a bargain‐hunting crowd, reported buying items on Boxing Day last year (10% could not recall), suggesting a shift in spending.
Finally, the study mentions that in 2015, retailers noticed an unusual drop in store traffic in the full week following Black Friday weekend. Mr. Gray said, “we called this “Black Friday Shadow,” and we're concerned that it may be an ongoing pattern resulting from some momentary bargain-‐hunting fatigue; however, our research suggests this will not occur in 2016”. Almost 2/3 of Black Friday buyers and half of Canadians overall expected to be Holiday shopping the following week, according to the 2016 DIG360‐Leger Canadian Black Friday Study.