Black Friday: Mobile Shopping Could Go Mainstream This Thanksgiving
There's been a loud clamor against retailers opening their doors on Thanksgiving -- we're looking at you, Target -- but backlash over the early openings might be the least of big box retailers' worries.
For a certain segment of shopper, the holiday buying rush is no longer a race to those stores' parking lots. Christmas shopping instead begins on the couch on Thanksgiving via an iPhone,Droid, iPad or other mobile device.
PayPal, the online payment company, saw a nearly 300 percent increase in mobile spending on Thanksgiving between 2009 and 2010. And this year could see an even bigger rise, the company says.
The PayPal numbers suggest that prime shopping hours are switching from Friday to Thursday, but some say mobile has expanded Black Friday into an entire month. "It is turning into a Black November," says Colin Sebastian, a senior research analyst with Baird Research & Insights. "A lot of the stores -- not just e-commerce, but big box stores too -- are offering [deals] through the month. This idea that sales come all in one day is outmoded."
The pressure to compete with mobile spending is one reason why the big box stores announced earlier hours and targeted online-shopping strategies this year. Toys "R" Us is opening at 9 p.m. in some areas, Walmart at 10 p.m. A slew of other big box stores, including Target and Best Buy, are aiming for the midnight shopping rush.
Meanwhile, web retailers are getting into the Black Friday game. High-end internet retailer Gilt Groupe is promoting sales starting at 6 a.m. on Friday and eBay, which owns PayPal, is setting up mobile hubs and food trucks in shopping districts in San Francisco and New York with free WiFi and downloadable shopping apps to engage smartphone consumers.
The mobile shopping rush is quickly shifting the way people are consuming goods and how retailers are lining up to capture that evolving business. The top mobile merchants, lead by Amazon.com, are expected to generate more than $5.3 billion in sales through mobile devices in 2011 -- double last year -- according to an estimate by Barclay's Capital in a report earlier this year.
And it's not just people shopping through mobile. Small businesses and retailers receiving electronic payments through mobile devices are increasing too. Vendors using Square, a year-old card-reading technology made for smartphones and tablets, can capture and process payments pretty much anywhere. And transactions using the service are growing quickly -- In August the company was processing $4 million a day; earlier this month, the company reported having its first $10 million day.
The thrust toward mobile shopping this year also underscores a growing information divide between different consumers. As many as 43 percent of people with mobile phones use smartphones, according to Nielson, and using their devices, those consumers can quickly compare prices, access product reviews and/or make a purchase.
However, for Black Friday, that advantage could be moot. Post-Thanksgiving deals are usually inked well before sales day, said Sucharita Mulpuru, a principal analyst for Forrester Research, and last-minute cost comparisons on popular products are unlikely to reveal much variation in price. Even as mobile edges in on brick-and-mortar territory, standing in line at 2 a.m. has at least one major upside to mobile shopping.
"The benefit is getting the product immediately," says Mulpuru. "There is also the sport of it and the tradition of it."