Issue #29: Did Cyber Monday Destroy Retail?

Last week, in Issue #28, we dove into the early results from Black Friday and previewed Cyber Monday. Black Friday was very strong, so one of the things I was worried about was the potential that consumers had already spent a lot of their funds, given that the deals started very early this year. However, that was not the case as Cyber Monday set records. Here are some of the highlights from the day:

Headline 1: Adobe Analytics Shows Record Spending Online Despite Strong Black Friday

Going into Cyber Monday, Adobe was predicting record sales of $13.2B, which would have been a 6.1% increase over last year and the year’s biggest shopping day of the year. However, their prediction was slightly understanding, and instead, Cyber Monday grew 7.7% to $13.3B. This growth was on top of record Black Friday sales, with eCommerce site, Shopify, setting a record in sales for them at $5B. This data clearly shows consumers were willing to spend more, and might even be willing to continue to spend if the deals continue to show value. Still, year over year data was stronger for Thanksgiving and Black Friday, as customers try to get these done earlier. It will be interesting to see how early this shopping tends to start. Will it go as early as October and Halloween?

My takeaway - despite the strong spending on Thanksgiving and Black Friday, consumers were willing to spend. Will this continue in years to follow? How early will the promotions start? Things to monitor in the coming years.

Headline 2: Customers Still Enjoy Retail Shopping Despite Cyber Monday Growth

While this stat is more connected to Black Friday than Cyber Monday, I think it is important to show in person attendance and eCommerce success does not have to be mutually exclusive. At Mall of America, the largest mall in the United States, over 200,000 people came to shop on Black Friday, with the earliest arriving at 2 PM on Thanksgiving day. In terms of performance, there was an improvement over previous years. Over half of stores experienced better sales than they did last year. This was on top of many stores opening up sales the weekend before Thanksgiving and seeing a rise in traffic of about 10%. Mall of America was very smart with giveaways and other fun draws to get people to come on Black Friday and Cyber Monday. According to the Mall, there were huge lines at Lego, Lululemon, Hollister, North Face, and American Eagle in particular.

My takeaway - with the right experiences, like at Mall of America, and giveaways consumers still want to shop in person, especially for clothing.

Headline 3: Despite Success Shopping Habits Still Shifting

With all this shopping growth, that also has come with changes in consumer behavior. The biggest shift has been the growth of mobile shopping. In 2019, 33% of Cyber Monday sales came through a mobile device. This year, it rose to 57% of online sales and represented $7.6B in spend, which was up 13% YoY. The efforts of companies to make the shopping experience on mobile more pleasant are clearly paying off. Additionally, shoppers are embracing AI chat bots to shop online. Traffic to retail sites from an AI chatbot was up 1950% YoY. It is clear that these shopping assistants will be part of the next wave and be very impactful to commerce as a whole. It will be interesting to see if these experiences make their way into retail.

My takeaway - consumers clearly love new ways of shopping, with mobile being the fastest rise recently. Next up? AI powered chat bots.

What are your favorite commerce trends from BFCM?

Movie Theaters See Recent Attendance Boost

In between all the shopping and holidays recently, people are finding time to do fun activities, like go to the movies. Propelled by some blockbusters, like Moana 2, Gladiator II, and Wicked, Thanksgiving Weekend drove a record $420 million in overall sales, according to Comscore. Moana is grossing ~$50M a weekend, Wicked is doing ~$30M, and Gladiator II is doing ~$15M from Hollywood data. All of these movies were also theatre first, which helps build hype. AMC, the biggest movie chain in the US, has seen its stock rise over 15% (albeit at a very low number) since the start of November due to the increased interest. Plus, don’t forget the Costco Guys bringing the boom and collaborating with AMC. Part of this is due to the excitement around the titles, but also people are wanting to get out and do things. With the weather cooling down over the past couple of weeks, enter Movie theaters. I also genuinely believe we have reached the floor for movie performance and are now going to see a slight increase. Boosted by the increase in quality of experience with food and bar, like at Alamo Drafthouse, the continued pumping out of blockbuster films, and the desire to get out and participate in experiences. Movie theaters, and other in person activities, are going to see a boost in 2025.

Wawa Closes Another Location in Center City Philly

For a long time, if you were a resident of Philly, seeking hoagies from the iconic gas station/convenience store/prepared food chain, you would have to head out to the suburbs to satisfy your cravings. Over the years, the demand continued to grow, and Wawa adapted its format for the city. No gas station, smaller footprint, pickup windows etc. Very different than the typical Wawa experience customers are used to. That difference had an effect on performance too. This week, Wawa announced they were closing another store in Philly, the ninth one they have closed in the past couple of years. Adapting your business to try and force growth is not always the best move. I applaud Wawa for trying to make it work and applaud them for realizing when it was time to cut losses. Instead of these city locations, Wawa is going to continue to focus on its bread and butter, large suburban stores with gas stations. A great lesson for all in retail, focus on what makes you special, don’t compromise, and make sure your value prop meets the occasion your customers are seeking.

Fun Commerce Strategies: Vending Machines and Distributor Trucks

In Issue #27, I covered two unique strategies, Kickstarter and Military Bases, as channels that have the opportunity to fuel growth. This week, I came across two more and wanted to share them:

• Vending Machines - Athletic Greens/AG1 launched its vending machine in the San Fransico airport to meet the occasion where customers are looking to boost nutrients during travel. The plan is to quickly expand to Atlanta, Houston, Oakland, and Chicago over the next few weeks. I am very bullish on this strategy because it is very differentiated and meets at the occasion the customers want.

• Distributor Trucks - Grocery stores are always getting deliveries in some pretty big trucks. These trucks are usually pretty bland white, but customers usually walk by them before their shopping. This week, better for you soda brand Olipop launched a partnership with Adgile (who wraps these trucks) in the DMV area to support their retailers in the area by advertising on their delivery trucks. Already, the campaign has seen double digit increase in sales as well as making sure their launch goes smoothly. Meeting customers right before the point of purchase is always helpful.

What are your favorite unique commerce strategies you have come across recently?

Toast Flip Flops On Delivery Provider

Toast, the restaurant software that powers restaurant websites, announced a new partnership with Uber Direct this week to deliver the orders, which caused a lot of confusion around delivery on the platform. Originally, the way it was told to operators was that the current option, DoorDash Drive, would be sunset in favor of Uber’s option. From a Toast point of view, DoorDash has been starting to create software for restaurants to sell their goods, which directly competes with Toast’s main offering. Plus, Uber is $0.50 cents cheaper, potentially due to Uber’s focus on building up its direct delivery business rather than competing with Toast. Based on these factors, it makes sense why DoorDash would get removed. However, once the announcement came to fruition, Doordash is still able to be used and DoorDash is now price matched to Uber, causing confusion among the operators who use Toast. Maybe Toast was able to leverage the new partnership to get a cheaper deal with DoorDash. Maybe Toast wanted to gradually phase out DoorDash to ensure there are no issues. Regardless, a confusing moment for the user of the software, which should always be avoided, as you don’t want to make it harder for your users. It will be interesting to see what happens going forward. If I were Toast, I would think for a while about removing DoorDash.

• Summary: Level99 is an entertainment center featuring challenge based rooms (similar to escape rooms), food, drinks, and a brewery. 

• My Take: I strongly believe in person experiences and events are on the rise. Part of what makes the event successful is that the space it is in is quality and engaging. What Level99 is creating is that opportunity at scale, so people can hang out, eat, drink, and more. It will be interesting to see how frequently the space needs to be refreshed so people keep coming back.

• Founder(s): Matthew DuPlessie

• Funding: Act III Holdings (Panera Founder)

• Number of Locations: 2 (Providence and Natick)

• Social Media Following: 72K on Instagram and 111K on TikTok

Additional Links:

1. A detailed breakdown from the CEO of Everytable, a fast-casual better for you restaurant, on how restaurant economics work (read more here)

2. Casey’s, the midwest based convenience store and gas station, made several leadership changes on the back of its $1B acquisition of Fikes Wholesale (read more here)

3. Feast & Fettle, the meal delivery service, announced it has acquired WECO, another meal delivery service (read more here)

   • My take: keep an eye out for next week’s issue with a deep dive on corporate gifting

4. Smackin Sunflower Seeds using strategies that win on social media to win in retail (read more here)

5. Corporate gifting is a great channel, and Feast & Fettle, the meal kit provider, is doubling down on this channel (read more here)

6. Olivia Rodgiro transformed an unused subway station as a destination for her fans and influencers (read more here)

7. TikTok has partnered with Fin Logistics to deliver TikTok Shop orders across London (read more here)

8. How the founder of Le Alfre, a menswear brand, thinks about the growth of his brand (read more here)

9. Etsy shuffles its C-suite as it tries to figure out the future of the platform (read more here)

10. Lululemon reports strong Q3 earnings (read more here)

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