Holidays so far: Lululemon, Costco see Black Friday records

More Black Friday records

Costco CFO Richard Galanti said Black Friday and Cyber Monday were the two largest ecommerce selling days in the wholesale company’s history. This, despite ecommerce sales of consumer electronics and appliances being down in the “high single digits” for Q3.

Holiday deals

With higher prices for gas and food amid inflation, consumers are on the lookout for deals. This was forecast to have an impact on the holidays, and observations from executives like Vera Bradley CEO Robert Wallstrom are baring it out.

“We saw weakness in October, and as we got towards Black Friday, we saw the consumer begin to pick up during Black Friday and that momentum has continued past Black Friday,” said Wallstrom. “What we have definitely seen, though, is the importance of promotional activity as part of that stimulation, that the consumer definitely is looking for the deal, is kind of returning to that historical Black Friday mentality.”

Many retailers are calling the holiday season highly promotional, but that’s not necessarily true across categories, said Sumit Singh, CEO of pet product ecommerce service Chewy.

“Compared to Q3, the promotional environment is elevated in Q4. This is the normal seasonal pattern we see every year heading into the holidays,” Singh said. “But within the context of Q4 itself, we believe the promotional environment remains rational and more or less in line with what we have seen in previous holiday periods.”

Impact of early holiday events

Larger retailers sought to get the holidays off to a big start with deal events in October. This also had the effect of introducing deals into the marketplace earlier in the season, which has impact on the specialty retailers in ecommerce that typically stick to full-price, said Elizabeth Spaulding, CEO of styling service Stitch Fix.

“In fiscal Q1, the retail industry experienced a meaningful pull forward of the holiday promotional environment, which continues to be more pronounced than expected due to weak consumer sentiment and excess inventories,” Spaulding said. “We believe this resulted in lower client spending and also had a large impact on our net active clients, which declined 11% year over year.”

Stitch Fix is experimenting with limited-time promotions as it seeks to move inventory and lift slumping sales. It is seeing a “halo effect” for full-price merchandise by taking this approach, Spaulding said. But it must weigh how making items available at a lower price impacts the brand.

“We had our first Black Friday-Cyber Monday event, which we saw good lift in terms of what we were able to offer our clients in that window,” Spaulding said. “But I think we really want to strike a good balance of being levant in those seasonal time periods, but ultimately do what we do best, which is differentiating based on style, discovery, fit.”

A late finish

While early deals and big cyber weekend events are shaping the season so far, there could still be a strong finish for the taking, as well. When people are stretching their wallets and holding out for deals, last-minute shopping could be even more active than usual. Signet Jewelers is seeing both sides, said CEO Gina Drosos.

On Black Friday-Cyber Monday, “We saw omni traffic up double digits, so a lot of people in stores but a lot of people online. And we saw our online revenue up mid single digits, so that was great that we see people buying at the time,” Drosos said. “But a lot of people, we see browsing, and they'll be waiting, we think, until later in the season, making sure they get the very best value that they can.”