Black Friday 2018: No more early birds & retail credit applications on the rise

by Carmel Maher

Carmel Maher

Black Friday 2018 saw slower foot traffic in retail stores than in years past, but that didn’t mean merchandise wasn’t flying off the shelves—online sales hit a record high with shoppers spending $6.22 billion online, up 23.6% from last year.¹ Amazon reported that their customers in the U.S. were purchasing at record levels with more than one million toys and 700,000 fashion items ordered in the first nine hours of the shopping day.² And early birds pushing and shoving their way through crowds to grab the hottest deals weren’t the top newsmakers for a change; a survey by Reveal Mobile showed that this year’s Black Friday “rush hour” for shoppers occurred between 11 a.m. and 3 p.m.³

Did credit application volumes coincide with these shifts in Black Friday trends? What did we see from a retail perspective?

ID Analytics has been tracking Black Friday credit application volumes in our ID Network® over the past several years and in 2018 our data revealed a shift in the time of day for increased consumer applications. In 2017 credit applications peaked earlier in the day, however in 2018 we saw an increase in activity starting at 9 a.m. PT and continuing for the next several hours, lining up with the new Black Friday “rush hour” that didn’t begin at the crack of dawn.⁴

Figure 1. Credit application volume in ID Analytics’ ID Network on Black Friday by hour.

To demonstrate the significance of Black Friday volumes, ID Analytics compared Black Friday numbers to the volumes seen on a “normal” Friday (in the example shown in Figure 2 the comparison date was November 16, 2018). From Black Friday to the Friday before, we saw an overall increase of 1.4x applications opened.⁵

Figure 2. Black Friday total credit application volume compared to a “normal” Friday in 2018.

When we analyzed credit application volumes across industries, not surprisingly retail volumes saw the biggest increase overall. To demonstrate the significance of retail providers’ Black Friday volumes, ID Analytics compared Black Friday retail volumes to those seen on a “normal” Friday (in the example shown in Figure 3 the comparison date was November 16, 2018). The result was nearly 4x higher than a typical day, which matches up with the frenzied spending as the holiday shopping season kicked off.⁶ We can hypothesize that an increase in credit applications leads to more purchases.

Black Friday retail credit applications

Figure 3. Black Friday retail credit application volume compared to a “normal” Friday in 2018.

ID Analytics consistently sees retail credit applications spike by more than four times the volume of a typical Friday.⁷ During these high-volume credit application periods, it is important to have the right tools in place to create scalable strategies that perform well. Those strategies should improve identification of fraud risk using near real-time insights and reduce false positives which can lead to a poor customer experience. The last thing businesses want is to create a frustrating experience for happy shoppers with their wallets open.

Learn more about how ID Analytics’ fraud risk management solutions can help your business effectively minimize fraud losses at the point of account origination, especially during peak volumes.

 

Carmel Maher is the Product Marketing Manager for ID Analytics

 

1. CNBC.com, https://www.cnbc.com/2018/11/24/black-friday-thanksgiving-foot-traffic-drops-1-percent-shoppertrak.html (accessed November 26, 2018).

2. CBS News MoneyWatch, https://www.cbsnews.com/news/black-friday-2018-on-track-record-online-spending/ (accessed November 26, 2018).

3. Marketing Land, https://marketingland.com/165-million-people-shopped-online-and-in-stores-over-black-friday-weekend-252602 (accessed November 28, 2018).

4. Data based on credit and loan application information tracked by the ID Network, 2018.

5. Ibid.

6. Ibid.

7. Ibid.