The consumer shift to online shopping on Thanksgiving and the following Friday, known as Black Friday, continues to increase, now accounting for 29% of shopping on these two days compared with 25% a year ago, finds research from First Data Corp.
Based on data from transactions at 1.1 million brick-and-mortar stores and 200,000 e-commerce sites serviced by the Atlanta-based processor, the Thanksgiving Holiday Spend Analysis, released Tuesday, indicated 71% of these transactions happened in stores, compared with 75% in 2016. In 2013, the percentage of in-store transactions was 86%.
Overall, average ticket size increased approximately 3% for in-store purchases, but decreased approximately 5% for e-commerce ones. First Data speculates the decrease may be because more consumers are purchasing more everyday items online.
Black Friday continues to reign as the dominant retail day, though some merchants have opened on Thanksgiving Day to capture more sales. First Data’s report says that retail transactions accounted for 59% of spending on Black Friday, compared with 31% on Thanksgiving.
In related news, merchant processor Cayan released data about consumer payment choices in the same period.
There’s no retreat now from the increasing pervasiveness of EMV chip cards, at least on Black Friday. Cayan found that 73% of transactions made at its merchants that day were made with a chip card, up from 55% just a year ago. Also increasing were mobile payments, which accounted for 1% of Black Friday transactions, an increase from 0.6% last year.
The loser? Magnetic-stripe card payments fell from 34% of transactions to 18% this year.
Payment choice based on the size of the merchant barely differed. Both mobile payments at 1% and mag-stripe cards at 18% were the same for small merchants (with less than 100 locations) and larger ones. Chip card use, at 80%, was higher at larger merchants than at smaller ones, where the use was 70%. Larger merchants, with larger budgets and dedicated information-technology staffs, were among the first to offer EMV acceptance. The much more fragmented set of smaller merchants took longer to achieve widespread EMV acceptance.
“In the two years since the EMV mandate in the U.S., we’ve seen nearly 75% merchant adoption across our portfolio,” Dominic Lachowicz, Cayan senior vice president of engineering, says in an email to Digital Transactions News.
“We’ll definitely see that number approach 100% over the coming year, as merchants and their acquirers are responsible for chargebacks if they fail to deploy an EMV solution,” Lachowicz says. The liability for fraudulent transactions made with a chip-enabled credit or debit card falls to the entity not equipped to accept EMV transactions.
“It’s just economics – the cost of deploying an EMV solution is cheaper than the cost of a couple of chargebacks, so merchants have a financial incentive to deploy these systems, and acquirers are increasingly unwilling to take the risk to underwrite merchants who aren’t using EMV,” Lachowicz says. “This has been the case in retail, and it’s starting to become the new norm in restaurants. I expect that, over the coming two years, we’ll start seeing ‘pay-at-the-table’ applications become commonplace in restaurants, as restaurateurs start aggressively adopting EMV.”
As for the ultra-low mobile-payments percentage, part of the problem may be merchant acceptance. “Nearly every adult in the US has a smart phone capable of mobile payments, but retailer support for mobile payments is spotty at best,” Lachowicz says. “We’ve demonstrated that showing a customer a small ad/logo/splash screen can cause a dramatic increase in mobile-payments usage, but customers’ payments preferences quickly return to baselines once those ads are removed. Today’s customers have to carry both a smart phone and a wallet, and it’s likely that retailers’ patchy/inconsistent support for mobile payments is causing customers to fall back on muscle memory once those reminders are removed.”