Black Friday vs. Online Shopping Savvy
Online Shopping Savvy vs. Black Friday Online Shopping Savvy among the States
Online Shopping Savvy
As November starts, Black Friday frenzy is hitting a fever pitch. Black Friday is the day after Thanksgiving, when most stores have their biggest deals of the year. These days deals from the biggest merchants are released and posted online ahead of time at sites like BlackFriday.Become.com. Here at Become, we are always researching consumer behavior to find ways to help shoppers find the best deals. With Black Friday around the corner, we have done a study on our online shopping traffic for Black Friday season (November 1-30), which compares state by state our most savvy Black Friday deal hunters against the online shopping pros who regularly use Become.com.
We started by scrutinizing the top and bottom three states in terms of their visits to Become.com, and we found that some states are just more online shopping savvy than others.
Weather: The weather in the northeast is a lot colder than it is in the south and southwest, especially in November. In colder weather people are less likely to head outside and wait in line at 5 AM at a store, when they can buy that same product from the comfort of their own warm and toasty home.
Amazon and Walmart: Walmart is one of the largest retailers in the country, but it is very unpopular in certain areas, like the northeast. People who don’t want to go to a giant superstore that has low prices on every product somehow are happy to shop online at Amazon, another giant superstore with low prices on every product. People in the northeast prefer to shop online on Amazon and other online shopping sites, rather than be seen in public shopping at Walmart. People’s preferences for Walmart vs Amazon can easily be tracked by looking at the number of Walmarts per person in each state.
We found that
- Our Online Shopping Savvy states averaged 1.18 Walmarts per million people
- Our least Online Shopping Savvy states averaged 18.44 Walmarts per million people
Note: For every Walmart per capita in our northeastern states, there are more than 15 per capita in south/southwestern states.
Internet Usage: The most online shopping savvy states bring the greatest number of visits per person (in the U.S.). They show some of the highest reported internet usage by state where a greater percentage of individuals with internet access. The Northeast, as defined by the US Census Bureau, has an average internet access rate of 79.3%, compared to 72.6% for the rest of the country. Due to high adoption of internet usage and access, they earn bragging rights for the greatest online shopping savvy. In fact, those states bring in 88% more visits per person than do the bottom states! Mississippi, Arkansas, and New Mexico, states with the least online shopping savviness, are among the bottom five states with the lowest internet usage.
Personality: While internet usage explains online shopping savviness, so does personality. The most online shopping savvy states, Connecticut, Massachusetts, and New York, tend to:
- Be the least extraverted and conscientious
- Be the most neurotic and open, which characterize the Northeast
- Have less social involvement
- Display more antisocial behavior
To them, shopping is more of a solitary than social experience, and they are more receptive to the idea of shopping online. By comparison, Mississippi, Arkansas, and New Mexico tend to:
- Be more extraverted, a trait that is positively correlated with social involvement and going out in groups
- Be less likely to shop online
- Be more likely to treat shopping as a social experience
Fun Fact about the average Joe: Become.com received an average of .0240 visits per person across the United States last November.
Black Friday Online Savvy
In 2009 we realized that there were special savings and discounts we could find and pass on to consumers for Black Friday, so we created a special Black Friday Deals site to cater to shoppers’ needs, BlackFriday.Become.com. We were surprised to find that the states that contained our most seasoned deal hunters, in the Northeast, were not among the states with the most visits per person to our Black Friday site last November. Instead, the South and the Midwest were the areas with the greatest Black Friday savviness, while the western states apparently missed the boat on online Thanksgiving weekend sales.
The Walmart Effect: Big chain retailers, especially Walmart, are famous for having really low prices. If people live near a chain store, (likely in the south, and Midwest, much less likely in the southwest or the pacific region), then there is less incentive to find the lowest deals online when they can find good deals in person at their local Best Buy. People who don’t normally shop online but are still web savvy know that Black Friday is the time to check discount prices against online merchants. Thus, shoppers in Kentucky, Missouri and Illinois who would normally automatically buy something at Walmart are more likely to look for deals online the day after Thanksgiving through a special Black Friday site, because these shoppers know Black Friday is the primary time of year that big chain stores slash their prices below normal. However, thrifty shoppers in the west who are used to shopping online will probably continue to use their preferred price comparison search engine (like Become.com) all year round, even during Black Friday.(Source: http://blogs.imediaconnection.com/blog/2008/10/07/online-advertising-in-2009-will-the-wal-mart-effect-boost-digital/)
Death: In 2008, Black Friday crowds at a Walmart in Long Island had grown so big a worker was crushed to death when the store opened. This dramatic event, which was covered in the media nationwide, created a lot of negative publicity for Walmart, especially in connection to Black Friday Shopping. States with a lot of Walmarts, like the South and Midwest, were more likely to shift to online shopping for their Black Friday deals than states where Black Friday shopping is associated with other retail outlets.(Source: http://www.nydailynews.com/ny_local/2008/11/28/2008-11-28_worker_dies_at_long_island_walmart_after.html)
Personality: Let’s see how personality factors into online shopping behavior for Black Friday. Kentucky, Missouri, and Illinois are some of the most conscientious states – they are more thrifty and practice more self-control, which explains why these states have the self-discipline to scour Black Friday online sites for the best available deals and discounts before they purchase a product.
Shipping Costs: Alaska and Hawaii have extremely high shipping costs – if consumers buy products online, their purchases have to be flown in, but when they buy products from big box retailers, those products will be shipped in cheaply in large container ships. Since the cost of shipping is always passed on to the consumer, thrifty customers do their Black Friday shopping in a brick-and-mortar store. In New Mexico, shipping is cheap. However, part of the reason people like to shop online is that they can often avoid paying a sales tax on their purchases. New Mexico has no sales tax, so there is less of an inducement to shop online. Consumers with these cost incentives are naturally less likely to go to an online Black Friday shopping site. In contrast, Illinois and Missouri have exceptionally high sales taxes, which is why savvy Black Friday shoppers in those states like to look for online sales tax-free deals.(Source: http://www.amazon.com/gp/help/customer/display.html?ie=UTF8&nodeId=200495550, http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States)
Fun fact about the Average Joe: BlackFriday.Become.com received an average of .0039 visits per person across the United States last November.
While there are many different possible causes for the variations we observed between people of different states in terms of the disparity of visits per person to Become.com and to BlackFriday.Become.com, clearly some factors are more influential than others:
- Differences in internet access correlate strongly with the discrepancy in online shopper savviness between states
- Difference in shipping costs and taxes between various states -e.g., it costs $57.78 to ship a 55-inch Samsung HDTV to Alaska or Hawaii! The average sales tax in the U.S. is 5.52%, which means the sales tax for the $2099 HDTV is $116
- Other, smaller factors with significant impact include weather differences of different parts of the U.S. and different levels of retail chain store penetration
Overall, we are looking at a country with significant differences in online shopping habits, but those differences are shrinking over time as more and more of the country becomes savvy online consumers as the internet becomes more accessible to the rest of America and as Black Friday becomes more of an online phenomenon.