Black Friday loses some luster as shoppers turn out to hunt scarce deals

Department stores are getting some love from shoppers this Black Friday, after getting pummeled by the pandemic from lengthy closures and bankruptcies.

Retail analyst Deborah Weinswig noticed the stores had surprisingly strong amounts of foot traffic when she visited malls in the Providence, Rhode Island and Boston area. Weinswig, the CEO and founder of Coresight Research, said she overheard some shoppers commenting on bargains at JCPenney, a department store that was pushed to file for bankruptcy during the global health crisis.

She had a few other observations, too: Traffic seemed stronger at malls versus off-mall locations. Out-of-stocks were common among hard home goods and basic apparel items, such as denim and underwear. And customers appeared to be nearing the end of their gift lists — in some cases, focusing instead on buying items for themselves.

Across the board, she said, deals seemed hard to come by due to low inventory levels and inflation.

Other indicators point toward a good day for department stores. Macy's CEO Jeff Gennette said early Friday that more people shopped at its stores on the shopping holiday than a year ago, after a wave of online shopping on Thanksgiving day.

Another source of data, Mastercard SpendingPulse, said early indicators Friday morning suggested "a solid start" for department stores, too. The company tracks all forms of payment, including cash and check.

—Melissa Repko

Promotions at Bed Bath & Beyond are up, but most retailers' levels of discounting are down this Black Friday compared with a year ago, according to a research note by Jefferies.

The equity research firm analyzed Black Friday deals at more than 20 different retailers in the home category. It found a noticeable difference with the sales of years' past, as many retailers have leaner inventory or more pricing power due to supply chain challenges and strong consumer demand for goods.

Bed Bath is offering 25% off this year versus last year when it offered 25% off in-store & curbside pickup and 20% off online last year.

At Wayfair, on the other hand, promotions are mostly down, according to Jefferies' analysis. Of the 15 categories that it advertised last Black Friday and this Black Friday, 60% had less discounting, 33% were flat, and one was up. Some of the categories with fewer discounts are holiday decor, lighting, outdoor furniture and kitchen upgrades. It found that the only category with more promotions was major appliances, with prices that start at $300 versus $399 last year.

At Home Depot and Williams-Sonoma, discounts were also reeled in. Home Depot has 25% off select appliances this Black Friday versus 40% during the shopping holiday a year ago — which may reflect inventory shortages in the category, Jefferies said. Williams-Sonoma promotions dropped across all categories, with Philips electrics up to 30% off versus up to 50% a year ago, Vitamix up to $75 off versus up to $175 a year ago and Williams Sonoma cookware 20% off versus 25% a year ago.

Last week, Williams-Sonoma raised its revenue outlook for this fiscal year.

—Melissa Repko

Small businesses that source materials locally are feeling like they have an advantage amid the numerous supply chain issues this holiday season.

Etsy CEO Josh Silverman told CNBC's Kate Rogers that the company is optimistic that it will have another big holiday season this year. He said many Etsy sellers began stocking up in August and September to get ready.

"Over 90% of Etsy sellers say they source from within their own country. And in fact, U.S. sellers, about half of them say they get all of their own raw materials from within their state," Silverman said. "So their supply chain is really simple."

—Christina Cheddar Berk

It was a sea of red for retail stocks on Black Friday, as concerns around the new coronavirus variant — labeled omicron by the World Health Organization — sent investors fleeing from some names.

Mall staples Express and Calvin Klein owner PVH ended the day down 7%. Department store chain Dillard's was down 6%, and Macy's fell 5%. Coach owner Tapestry and U.S. mall owner Simon Property Group were also down 5% by the end of trading. While American Eagle, Ralph Lauren and Under Armour all closed Friday down around 4%.

Around the country, though, consumers appeared to forge ahead with their holiday shopping, and many of them in-person. Malls might not have been as busy as Black Fridays of the past, but people were out and about.

"No one in the mall felt like the variant was here ... people were out," BMO Capital Markets analyst Simeon Siegel said on CNBC's "Power Lunch." "We are going to see winners and losers, rather than clusters."

—Lauren Thomas

Retailers are not only coping with a tight labor market and fears of a new Covid variant. They're also facing a rise in smash-and-grab crimes and thefts.

Best Buy, Nordstrom, CVS Health and Walgreens Boots Alliance are among the companies that have been hit by the crimes. Earlier this week, suspects smashed a Nordstrom store window with a sledgehammer at a Los Angeles mall, according to an NBC Los Angeles report. Walgreens said it is closing some San Francisco stores because of shoplifting.

Best Buy CEO Corie Barry said some of its consumer electronics stores have been targeted multiple times. In some cases, she said thieves are bringing guns or crowbars.

She said the crimes not only hurt profits, but also scare employees and could cause them to quit. She said the retailer is looking for solutions with trade groups and taking other steps, such as hiring security guards and locking up some merchandise.

"These are traumatic experiences, and they are happening more and more across the country," she said Tuesday on CNBC's "Squawk on the Street."

—Melissa Repko

The social media landscape looks a lot different this holiday than last. Between Apple's privacy changes and the ongoing controversy over Facebook's practices, more and more consumers are steering clear of Facebook's apps, which include Instagram and WhatsApp. Or they're turning to new ones, like TikTok.

The shift has made retail companies more anxious that their online marketing blitzes won't reach the right customers. Some, such as Patagonia, even fret that they could alienate consumers by being on certain social media sites.

According to Belardi Wong, a marketing strategy firm that helps direct-to-consumer brands, more retailers are testing out direct mail catalogs, podcasts and large-scale television campaigns to diversify their marketing mix over the holidays. CPMs, a marketing term used to denote the price of 1,000 advertisement impressions, are still rising and will likely keep rising into 2022, Belardi Wong said.

"When you first launch [a brand], it might be cheaper to acquire a customer via social advertising or via paid search," said Vuori founder and CEO Joe Kudla. "But then when you've acquired your millionth customer, it actually might be much more cost effective ... through a store."

—Lauren Thomas

Black Friday sales are off to a strong start, according to early data from Mastercard SpendingPulse. The company measures overall retail sales across all payment types, including cash and check.

Early estimates show spending is up 12.1% versus 2020 as of 10 a.m. ET, according to the company's data. That is driven by the East Coast, where malls and stores have been open longer.

Sales are high both online and in stores so far. Online sales are up about 5% year over year and in-store sales are up nearly 40% year over year compared with the same time a year ago, according to the early data. That online growth is notable, since it's on top of more than 85% online sales growth on Black Friday in 2020, according to Mastercard.

Apparel and electronics have been two of the fast-growing categories. Apparel sales rose 48.4% and electronics sales rose 15.8% versus the same morning period in 2020, according to Mastercard.

 —Melissa Repko

Online shopping totaled $5.1 billion on Thanksgiving day — matching a year ago, according to data from Adobe Analytics.

So far, e-commerce spending is on track to hit $207 billion in November and December, which would be a 10% year over year increase, the company said. That would crack the $200 billion level for the first time.

Adobe tracks consumer transactions across retailers' websites. It had predicted between $5.1 billion and $5.4 billion of online spend on Turkey Day.

Black Friday online spending is expected to range from $8.8 billion and $9.6 billion — compared with $9.03 billion in 2020 and $7.43 billion in 2019, according to Adobe.

—Melissa Repko

Splashy deals. Surprise guests. And a livestreaming event hosted by musician Jason Derulo.

Walmart is thinking outside of its big-box stores this holiday season and trying to draw more interest to its website with shoppable events. It will kick off Cyber Week with an approximately 30-minute show that starts at 7 p.m. ET on Sunday. It's just one of more than 30 livestreaming events that Walmart will have this holiday season.

Livestreaming has caught on as a fun and easy way to shop in China, thanks to a boost from retailer Alibaba. In the U.S., however, it is still in its early days.

Walmart's Chief Marketing Officer William White said Walmart wants to be a pioneer in the space. That's why, he said, it has been the first retailer to do the shoppable events on different platforms. The event with Derulo will be Twitter's first shoppable livestream.

He said the events "shorten the distance between inspiration and purchase" by making it easier for customers to discover new items and toss them into a virtual cart.

—Melissa Repko