Black Friday sales were the best they have been in years - but companies lost millions of dollars because they weren't ready for success

Kate Taylor

Nov 27, 2018, 00:15 IST

Black Friday sales were the best they have been in years - but companies lost millions of dollars because they weren't ready for success

AP Photo/Nati Harnik

Black Friday shoppers wait in line to check out at the Nebraska Furniture Mart store in Omaha on Friday, November 23.

Black Friday sales reached record highs, with online sales growing 23.6% to $6.22 billion and total spend for the weekend (online and offline) expected to hit roughly $59.6 billion.
However, not every retailer was prepared for the explosive sales, with companies losing an estimated $177 million on Black Friday alone due to stock running out.
Companies also weren't ready for the rise in online traffic, with retailers including Walmart, Lowe's, and J.Crew dealing with technical difficulties and website crashes.

Black Friday sales set records this year. But, that doesn't mean the shopping bonanza was nothing but sunshine and daisies for retailers.

Black Friday's online sales hit $6.22 billion, according to Adobe Analytics data. That's up by 23.6% from 2017's $5.03 billion haul.

The surrounding days' online sales were equally impressive. Shoppers spent $2.4 billion online on Wednesday, up 31.8% from 2017. Thanksgiving Day online sales hit $3.7 billion, 28% growth year over year. Thanksgiving weekend was the biggest online shopping weekend in American history, as sales reached $6.4 billion.

While store foot traffic was slightly down, in-store sales are expected to grow as well, resulting in a record-breaking kickoff to the holiday shopping season.

Total spend for Black Friday weekend is predicted to reach roughly $59.6 billion, according to estimates by GlobalData Retail. That represents an increase of 5.7% over 2017 sales during the same period - Thanksgiving Day to the following Sunday - and the best growth rate in the United States since the post-recession Black Friday boom in 2011.

However, the sales explosion created some new problems for retailers.

Reuters/Toru Hanai

The Nintendo Switch sold out at many stores before Thanksgiving Day was over.

Sold-out goods proved to be a significant problem. Some deals, such as the Nintendo Switch and the Instant Pot, sold out before Thanksgiving Day was even over. According to Adobe, 3.26% of product pages saw out-of-stock messages on Thanksgiving, costing retailers an estimated $120 million in sales.

The out-of-stock messages continued, with retailers losing out on $177 million on Black Friday (2.85% out-of-stock) and $140 million over the weekend (2.18% out-of-stock).

Retailers' lack of preparation for the eruption of early online sales also resulted in a number of technical difficulties. Walmart, Lowe's, J.Crew, and more retailers dealt with technical difficulties on Wednesday, Thanksgiving Day, and Black Friday.

Walmart's technical issues affected an estimated 3.6 million shoppers, according to LovetheSales.com analysis. The retail aggregator estimates that the tech problems, which lasted about 150 minutes, cost the retailer an estimated $9 million in lost sales.

"It's easy to go to a different site and spend their holiday money elsewhere," Bob Buffone, chief technology officer at the web-optimization software company Yottaa, told Business Inside on Thursday.

"Depending on how long the site is down, it can cost retailers a lot of money and also result in damage to the brand as shoppers take to social media to express their frustration," Buffone continued.

As shoppers move online and begin looking for deals earlier, the kickoff of Black Friday sales were a test for retailers to see if they were ready for this year's holiday season. And, while many companies are celebrating the record-setting day, not every retailer passed the test.