Target CEO Brian Cornell helps kick off Black Friday 2016 – Photo: Target
Have retailers killed off Black Friday?
Black Friday is not the big deal it used to be. That’s according to new research, which finds a dwindling percentage of Americans plan to shop on the day that traditionally starts the Christmas selling season.
This year, only 35 percent of shoppers who plan to shop during Thanksgiving week will do so on Black Friday, according to research from PwC. That’s down considerably from 51 percent last year and 59 percent in 2015.
“Black Friday has lost its significance,” Steven Barr, consumer markets leader for PwC, told The Washington Post. “Retailers have conditioned the consumer to believe everything’s on sale every day, which means the deals on Black Friday are not significantly different from any other time.”
Promotional deals for Christmas, once reserved for Black Friday, have been pushed earlier in recent years with many merchants running sales to kick off Thanksgiving week. The decision by retailers to open store doors on Thanksgiving has led many consumers to head to the mall not long after the turkey is eaten, cutting into Black Friday traffic.
Instead of looking to drive customers into stores ahead of Black Friday, Burlington, Costco, Home Depot, IKEA and Office Depot and others will remain closed on Thanksgiving.
REI, one of over 50 retailers that will again close on Thanksgiving, according to BestBlackFriday.com, has created buzz around its business in recent years by also giving thousands of its workers Black Friday off with pay, as well.
The competition for consumer deals is likely to be as intense as ever this year with numerous firms and organizations projecting solid year-over-year retail sales growth for Christmas. Earlier this week, the National Retail Federation (NRF) projected retail sales to increase between 3.6 and four percent over last year’s total.
Retailers are expected to benefit from having 32 sales days leading up to Christmas this year, one more than in 2016. Christmas also falls on a Monday this year, giving last minute shoppers an extra weekend to complete their shopping.
“Although this year hasn’t been perfect, especially with the recent devastating hurricanes, we believe that a longer shopping season and strong consumer confidence will deliver retailers a strong holiday season,” said NRF president and CEO Matthew Shay in a statement.
- The era of holiday deals is dead, and so is Black Friday – The Washington Post
- NRF Forecasts Holiday Sales to Increase Between 3.6 and 4 Percent – National Retail Federation
- Here are the retailers opting to stay closed on Thanksgiving this year – CNBC
- Is it time for retailers to stop the Thanksgiving madness? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: How should retailers approach marketing for Black Friday when it has lost much of its significance for consumers? What do you see as the keys for retailers to differentiate themselves and drive sales for the upcoming Christmas selling season?
Poll
BrainTrust
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Richard J. George, Ph.D.
Professor of Food Marketing, Haub School of Business, Saint Joseph's University
The consumer today has learned that the best deals come a few days before Christmas. So each year the shopping season seems to get later and later. We also have the big week after Christmas with customers redeeming gift cards. Black Friday is no longer what it once was and will never be again. The only way Black Friday could be successful is if it were re-invented with something more than just great shopping discounts; preferably a Black Friday experience that entices customers to shop. That would require substantial creativity and significant promotion.
However the bigger question is, with all the sales retailers offer and the customer knowing that the longer they wait the better the prices will be, is Black Friday needed any longer?
Lastly, I think all stores should close on Thanksgiving and allow employees to spend the holiday with their families.
Great points, Art. It seems that it’s the retailers who don’t peddle Black Friday and Thanksgiving Day shopping as the cure — all are the ones getting the most attention and goodwill from consumers.
Agreed!
I am 100 percent in favor of your last thought about Thanksgiving.
I agree with your comments. Especially the one about closing on Thanksgiving to allow employees to share the holiday with their family.
“Killed” is too strong a word, because Black Friday still represents one of the biggest shopping days on the retail calendar. But the day has lost its punch for a number of reasons:
I could go on, and these are tough “macro” challenges for an individual retailer to overcome. Some of the potential solutions involve greater use of targeted social media and other messaging to reach younger customers … and this is true from early November all the way to the last crucial weekend before Christmas.
But the biggest challenge may be to make the sale offerings and merchandise content more compelling. Easier said than done (without months of advance planning), but the recent focus on putting entire assortments on sale — instead of key items at compelling price points — has drained Black Friday of its former sense of urgency.
While the frenzy around Black Friday is diminishing, there will be shoppers looking for bargains and I would advise retailers to continue to treat it as an important selling opportunity.
While there will very likely be a decline in store traffic, this may actually be good for retailers. Here’s why. When stores get so over-run with traffic, conversion rates tank because it’s very difficult to efficiently serve customers — mayhem is bad for conversion. To make the most of Black Friday, retailers should ensure they have strong inventory levels backed by compelling deals that encourage multiple purchases. Next, staff the stores adequately to facilitate conversion — have staff focused on processing transactions to enable customers to get in and out quickly and efficiently.
Good point Mark … turning the reality of fewer customers into an opportunity to improve the actual shopping experience. More inventory on more fixtures with deeper markdowns taken earlier in the season. How’s that working out? How about 5R inventory (right product, right price, right place, right time, right quantity) and a staff that knows their stuff. With that combo the retailer has a very good shot at converting and making money in the process.
Not being a marketing person, I think that Black Friday is hype. The answer to how good the holiday season is going to be is: “how much demand is there for available goods and how much disposable income do consumers have?” If consumers want it and can afford it, it doesn’t matter if they buy it the Thursday before, the Saturday after or on Friday. For individual retailers the important thing is from whom they buy it.
There is an old saying that it ain’t over until the fat lady sings. If predictions hold true that Cyber Monday will be bigger than Black Friday this year, the lady is about to sing.
The reality is that today’s customers shop any time and everywhere. They don’t think channels, they look for a seamless experience and promotions across both digital and physical. Increasingly customers look for choice, convenience and relevance as much as a good deal. And increasingly they are using their phones to shop even if they fight the crowds and go to stores.
The smart retailers will orchestrate an integrated online and store campaign, across the super shopping weekend of Black Friday through Cyber Monday.
If you’re a SMB, stay home and enjoy the holiday. You’ll get more traffic and generate more revenue in the days leading up to Black Friday than the day itself. Being experiential and looking out for your consumers leading up to the holiday is something that cannot be understated.
If you’re a big box — wow, what a pickle you’ve worked yourself into. It’s hard to beat 40 percent year-over-year. Having said that, there are still things to do. First, figure out what an acceptable volume loss might be, and what a realistic volume for Black Friday should be. Second, bring some excitement to the day. Having people line up for door-crashers isn’t exciting. Pulsing deals virtually or literally during the day would help to manage traffic and excitement, and work with vendors to find reasonable offers that vendors can afford.
Perhaps for some retailers it might be a reversal of what you sell — what happens if you create moments where the consumer saves on end-of-season items that also save you inventory costs?
A reinvention of the day is definitely required.
First, there will still continue to exist a small segment of consumers who shop Black Friday for the thrill of the hunt and being in a crowd environment. For this group some blockbuster offers would suffice. For the rest of the consumer market there is very little to be gained by shopping with the crush of people. Dialing back on Black Friday and closing on Thanksgiving may provide real cost savings as well as positive consumer preferences.
From our own consumer survey, the three biggest turn-offs of Black Friday are: promotions being available all year round, the experience being less fun than it used to be and the rise of online shopping on Thanksgiving Day itself.
The top reason signifies the need for retailers to offer better and more differentiated promotions. This doesn’t necessarily mean deeper discounts — it could be discounts on products not usually promoted, special purchases, unique deals for particular customers and so forth.
If they want to revive it, retailers need to inject more excitement into Black Friday.
If a particular retailer wants to bring back Black Friday, it needs to make it clear that there are no big sales before Friday and that in-store big sales occur on Friday. For all other retailers Black Friday is a thing of the past because they killed it.
Retailers should listen to their target audience and behave accordingly. Last year, REI proved there was a successful alternative to “stack ’em high and watch ’em fly” and they enjoy a unique clientele.
For middle-tier retailers, price remains the most compelling content. Therefore a bargain-rich Black Friday is important. Of course that message is within a mix of counterbalancing messages to ensure achievement of business objectives. Relevance is always key. Relevance in value, optimizing the balance between price and quality (product plus people plus place).
I think holiday equity is made in the 11 other months of the year. If a retailer hasn’t established itself as a gift-worthy outlet, then the outlet is not very high in her consideration set when she commences shopping. Retailers earn that spot under the tree.
Yep, Scrooge said it too, “retail ain’t for sissies!”
For myself, I never have gone on a Black Friday shopping spree and never will. With online deals at Macy’s and Kohl’s, etc. there is no longer, for me anyway, a reason to fight crowds. Also the Saturday after Thanksgiving is a religious holiday for me, which is Ohio State vs. Michigan, and that my friends is what I gear up for.
Holiday shoppers are always looking for the best deal. Just because other retailers may open on Thanksgiving and get a jump on the season, that doesn’t mean many of them won’t be coming out on Black Friday if there are good enough sales. Remember, most holiday shopping isn’t done in a day. Give them a reason to come into the store and then provide great service and they will come. For my 2 cents.
Black Friday relinquished its title as the busiest shopping day of the year in the U.S. in 2014 and went back further in 2015 and 2016 .
If it has a sustainable future, Black Friday has got to become an event that is healthier for retailers, rather than bigger for consumers. There is little or no incentive for retailers to make greater efforts if they are purely diluting margins without expanding sales. So value growth has to feature in the future of Black Friday. This means taking a more nuanced approach, looking to discount limited lines and targeted reductions while enticing customers to explore the fuller range. Amazon has signposted how it has learned from the ills of Black Friday and now presents an evolved approach to its “Prime Day” event: offering the best and most relevant deals to its Prime customers directly and personally. It aims to deliver everything that its customers cherish: offers that people engage with, didn’t know they needed and are tempted by, unrepeatable value and a pain-free shopping experience.
To survive, Black Friday must become a smooth and sophisticated showcase event that demonstrates the best of a retailer’s omnichannel capabilities. It must enrapture shoppers and provide well-founded reasons to spend in November without diminishing the gifting appetite over the rest of the holiday period. Perhaps that’s the means of differentiation — by making Black Friday the event targeted at spending on oneself, as opposed to the rest of the festive campaign when the spirit of shopping is directed at buying for others.
It was never the busiest shopping day of the year. The Saturday before Christmas is and remains the busiest shopping day of the year. people shop closer to the event, when they have the most open to spend.
Services, rather than prices, are the much more effective, long-term generator of brand loyalty. With more and more commerce being transacted online, the timing of Black Friday becomes more irrelevant. There is still the excitement of the impending holiday season shopping experience, so I’m not yet ready to completely abandon the idea of Black Friday. However I would support those merchants that are closed on the Thanksgiving holiday, because people can still shop their online sites with their families after stuffing their bellies, rather than embarking on an all-night trip to stores. That online holiday experience sounds a lot more attractive to me.
Black Friday might be toned-down this year due to changing promotional calendars. Retailers start promotions earlier than ever and have multiple sales leading up to Christmas, targeting different audiences. Black Friday sales must catch shopper attention to stand out from the noise. This typically has been done with low pricing, but Steven Barr is right, when shoppers are bombarded with offers, they no longer have an incentive to buy on any particular day. There will always be another sale if they miss the current one.
Since price is off the table, the points of differentiation I see for retailers are storytelling and experiences. If a company has a strong story, then they will be top of mind on a retail holiday like Black Friday. In addition, having an event, demonstration, or class could get shoppers in-store to experience (and hopefully buy) products in a new way.
Retailers are deeply committed to Black Friday, but savvy customers would rather find deals online, instead of camping out in the cold….
Black Friday is now a thing in Europe 😉 not so much in the US. It is more a “get your inventory and any end of year actions ready” thing than a large day of sales.