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Historical Insights for the 2013 Holiday Shopping Season

For the past five years, since November 28, 2008, the fourth Friday in November (commonly known as “Black Friday”) has been arriving earlier and earlier. This has incrementally extended the traditional holiday shopping season, until this year when Black Friday “resets” to November 29th. This will effectively decrease the online shopping season from 28 days last year to 22 days this year (the two business day shipping deadline this year will be Friday, December 20th). Faced with a shorter holiday season, there has been some debate over whether retailers’ Q4 revenues will be materially affected or if shopping sprees will simply just be time-shifted. Looking at history for insights, Q4 revenues generally decreased between 2007 and 2008, but it is challenging to quantify precisely how much of that can be attributed to the shorter 2008 holiday season versus the 2008 financial crisis and the impending collapse of the global economy. Surprisingly, we may find more insights on this question if we look a bit further back in history... President Abraham Lincoln’s Thanksgiving Day Proclamation in 1863 originally established the last Thursday in November as a national day of “thanksgiving and praise.” And thus it was celebrated annually until 1939 when retailers successfully lobbied President Franklin D. Roosevelt to “change Thanksgiving” in the hopes of increasing revenues by extending the holiday shopping season. FDR proclaimed on October 31, 1939 that Thanksgiving that year would be moved up a week to November 23rd.

As you can imagine, the change caused much confusion and controversy, especially since some states honored the new date while others chose to observe the traditional date. As a consequence, one might argue that FDR inadvertently designed a national A/B test to assess the impact of a longer/shorter holiday shopping season. Congress eventually passed a bill in 1941 declaring Thanksgiving to be the fourth Thursday of November but not before the “experiment” had run its course. An article about How FDR Changed Thanksgiving summarized the results quite succinctly:
Businesses reported that the spending was approximately the same, but the distribution of the shopping was changed. For those states who celebrated the earlier Thanksgiving date, the shopping was evenly distributed throughout the season. For those states that kept the traditional date, businesses experienced a bulk of shopping in the last week before Christmas.
RKG’s historical holiday data seems to support this last observation as the peak in online sales occurred a week later in 2008 than in 2007 (the last time the holiday season was shortened YoY) and has steadily been shifting earlier as the holiday shopping season has gradually lengthened over the past few years.

The following graph highlights each years' peak for clarity:

For 2013, instead of online sales peaking a week before Christmas as it did in 2008, however, there are at least three factors fueling the trend of online sales peaking closer to Black Friday:
  1. The first night of Hanukkah will occur on November 27th, the night before Thanksgiving and 11 days earlier than last year. Interestingly, this has happened only once before in 1888 and will not happen again for a very long time.
  2. Christmas will fall on a Wednesday this year, providing customers with “only” three weekends to shop online. Shoppers will most likely prefer to shop in-store the final weekend before Christmas instead of splurging for one-day shipping.
  3. Retailers have “trained” customers over the past couple years to shop for the best deals during the Thanksgiving-Cyber Monday weekend by "front-loading" their promotional offers in an attempt to capture holiday dollars before they can be spent at their competitors' sites; customers will be ready to shop online as soon as Thanksgiving dinner is over.
To ensure YoY revenue growth, online retailers will need to be prepared to kick their holiday execution into full gear on November 1st and make the most out of every incremental opportunity. Look out for our upcoming annual RKGBlog post to ensure your Paid Search program is optimized for the 2013 holiday season and have a Happy Thanksgivukkah!
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