Black Friday Draws Traffic

Discussion
Nov 30, 2009
Tom Ryan

By Tom Ryan

Black Friday incentives ranged from blockbuster deals on limited
items, 20% to 33% off coupons, and “Buy 1, Get 1 Half Off”‘ promotions
on select merchandise to sweepstakes and cash cards for spending over a
certain amount.

NRF’s
Black Friday shopping survey showed 195 million shoppers visited stores
and websites over Black Friday weekend, up from 172 million last year although
the average spend for the three days dropped to $343.31 per person from
$372.57 a year ago.

“Shoppers proved this weekend that they were willing
to open their wallets for a bargain,” said Tracy Mullin, NRF President
and CEO.

Here are a few of the Black Friday retail strategies:

Wal-Mart ran its early bird special
from 5:00 a.m. to 11:00 a.m. on a number of consumer electronic items and
prominently guaranteed to match any local competitor’s printed ad for an
identical product.

Toys “R” Us opened at midnight with doorbusters running
until Friday at 1:00 p.m. Extra door busters ran from 5:00 a.m. until 1
p.m.

Macy’s ran “extra 20% off” specials from 5 a.m. to 1 p.m. on Friday
and again from 8 a.m. to 1 p.m. on Saturday. It also offered a $10-off
coupon all day Friday and Saturday with certain brands and categories excluded.

Lord & Taylor handed out a Doorbuster Card worth $20 off
a $40 purchase to the first 500 shoppers on Friday to
use between 5 a.m. and 1 p.m.

JC Penney ran a doorbuster sale from 4 a.m. to 1 p.m.
From 3 p.m. to 11 p.m. on Friday, it offered a coupon for $15 off any purchase
totaling $75 or more and $10 off any purchase of $50 or more. Certain items
and brands were exempt.

Old Navy ran Friday-only as well as Saturday-only
deals and also offered a $10-off coupon any purchase of $50 or more on
Thanksgiving. It also offered a chance to win a $200 shopping spree and
a free Rock Band guitar with a purchase of Rock Band 2 software.

The Sports
Authority
opened at 5:00 a.m. with the first 80 people at each store
receiving a Bonus Bucks Card worth $10 to $500. Early bird deals at each
store from 5:00 a.m. to 3 p.m. included “Buy 1, Get 1 50% Off” its
entire footwear and socks assortments.

Dick’s Sporting Goods offered a
$25 cash card with any North Face purchase of $150 or more in its early
bird deal. A $20 gift card came with any purchase of $100 or more all day.

Modell’s offered a coupon worth 33 percent off any one regular
priced team apparel item, one regular priced footwear item, or one regular
priced sporting goods item. The coupon excluded certain brands and items.

Pier 1 Imports offered a chance to win a Disney Parks Celebration
vacation.

Bed Bath & Beyond offered a straight 20 percent off any
purchase between 6:00 a.m. and 10 a.m. Certain brands were excluded.

Discussion Questions: What package of promotions
do you think works best for Black Friday? Which promotions best maximize
spending over the holiday season? Do you have any personal observations
of successful Black Friday promotions in your area?

Please practice The RetailWire Golden Rule when submitting your comments.

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29 Comments on "Black Friday Draws Traffic"


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David Livingston
Guest
11 years 5 months ago

I was very impressed with Menards, as I am every year. First of all, they don’t use misleading ads with fine print that says minimum 3 per store. When they have a door-buster special, they make sure there are more than enough items by the time 11 a.m. rolls around. They make sure the store is well staffed to direct traffic to where the specials are located. The checkout lines were long, but moved quickly because they staffed all the lanes.

Bottom line is, to impress me a store needs to have an unlimited inventory of the door-buster specials. I’m most likely going to spend more time in the store knowing there is no hurry to find everything.

Bob Phibbs
Guest
11 years 5 months ago

For all the hype of Black Friday, the breathless anticipation and the cottage industry of tracking every off-price “deal” of let’s face it–mostly lower-end junk, the return is grossly less than the efforts expended. What ever happened to “I scored the ideal gift for my loved one!”

Shame on NRF for perpetuating the same mindless “they’ll show up for a bargain” we are on the downward spiral of retail if we can’t change the tone and message soon.

Ron Margulis
Guest
11 years 5 months ago

There seems to be a real shortage of creativity here. I’m beginning to think the best Black Friday strategy is to start the sale the previous week or delay any sales until Saturday after Thanksgiving. Or perhaps have the specials start Friday afternoon rather than the morning. “You need those extra hours of rest Friday morning to get ready for the sale at our stores in the afternoon.” Anything to create some differentiation out in the marketplace.

Laura Davis-Taylor
Guest
Laura Davis-Taylor
11 years 5 months ago

There were some amazing deals going on over the weekend, many of them very much worth taking the time to take advantage of. Having leafed through every single sale in the 4 inch pile of circulars, I think the doorbusters were built to bring it home and it was almost too much to process! I was personally amazed by some of the traffic drivers!

That said, I took full advantage of them online rather than brave the stores and would love to see how the redemption of some of these offers shook out online versus in the brick and mortar. Does anyone have any fresh data on this?

Len Lewis
Guest
Len Lewis
11 years 5 months ago

Lots of deals around…lots of confusion and lots of [aggravated] customers who found they couldn’t use all those special coupons and offers on a lot of items they wanted.

In the end, what works best is the straight percentage off or dollar off sales. The less confusing it is for customers, the less frustrated they get and the less likely they will leave the store.

Dick Seesel
Guest
11 years 5 months ago

We don’t know who “won” or “lost” Black Friday just yet, but the evidence suggests that it was flat at best: More traffic and transactions, smaller average purchases. The “top ten” list published with this discussion also suggests that electronics rules the roost again in 2009. Black Friday is dominated by wanted items at hot price points, perhaps more than at any other time, because shoppers are focused on how many of these items fit into their predetermined budgets. Layering on extra percentage savings, etc may work at other times during the holiday season but tends to muddy the message on Black Friday. That being said, some extra incentives (such as a bounceback coupon with a minimum purchase) are good ways to drive at least one more hot item into the shopping basket.

Joel Warady
Guest
Joel Warady
11 years 5 months ago
Black Friday has become a sport for many shoppers. They wait for this day to see how many bargains they can find during the day, and in many cases they purchase items that they might not need, but feel they can’t pass up a great bargain. I spent Black Friday in New York city, visiting various stores to get a pulse on the retail environment. The offers that seem to work best are the free merchandise offers; Buy One, Get a Second One Free! Couple this with the whole store being put on “sale” and you have a winning strategy. That being said, this type of sale tends to significantly erode profits. The other thing that Black Friday can indicate is how much trouble a particular chain might be experiencing. For example, Ann Taylor, which has been struggling of late, originally had their whole store at a 40% discount, and was due to last only until noon. As noon approached, they sent out an email extending the offer to the rest of the day. This… Read more »
Doug Stephens
Guest
Doug Stephens
11 years 5 months ago

I think it all comes down to the definition of success. What is the retailer hoping to accomplish? What are the marketing objectives?

Is the objective to simply to steal customers from competitors and build line-ups? Or is the goal to participate while maintaining brand and overall price integrity?

Two very different objectives that would yield two very different promotional strategies.

Marge Laney
Guest
11 years 5 months ago

Black Friday shoppers are looking for bargains. Why else do you get up at the crack of dawn (or earlier), and wait in long lines for sometimes nothing more than the possibility of scoring a big discount? The bigger the discount the bigger the crowd! Will they buy anything else? I think the answer to that is, yes, if it’s compelling.

I was alarmed by the lack of product, compelling or otherwise, on Black Friday. The reduction of inventory and the safeness of the offerings were obvious. Most customers reacted by buying (if they were lucky enough to get there before stock ran out) what they got out of bed for and nothing else.

Bill Emerson
Guest
Bill Emerson
11 years 5 months ago

The reality is that all of these deals are defensive in nature–done simply as a way to maintain market share. As the terrific article last week pointed out, the basic premise–give a below-cost deal and they will buy additional full-price items–is specious. They wait, they buy the deal, they leave. As we used to say–there’s not much nutrition in a bowl of markdowns. Add the incremental expenses for marketing, payroll, etc, and it’s hard to see the point.

Here’s a novel idea. Be in deep stock position with the top ten items in your channel and spend the Black Friday promotional costs on more store payroll and enhanced service. My guess is you won’t get much press coverage, but you’ll make a lot more money.

Doron Levy
Guest
Doron Levy
11 years 5 months ago

I give a collective meh to this year’s Black Friday and I’m more concerned how this will impact spending from now until the 24th of December. Shoppertrak says we are half a percentage point above last year and in retail that is a death number. Merchants can sell their products below cost all they want but what are they doing to build the basket (which it is the whole point of a massive sale)? Many of the promotions listed had small allocations with no real strategy to recoup those losses. I’m waiting to see what happens this week to make any calls about this season.

Ryan Mathews
Guest
11 years 5 months ago

So…after all the hype, here’s what we know–more people showed up and spent significantly less. Increasing foot traffic by 33% and having flat sales isn’t a formula for success. All it demonstrates is the media’s ability to force behavior and the public’s willingness to go along with the con.

John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
11 years 5 months ago
I skipped early morning Black Friday this year because unfortunately, none of the deals were enticing enough to get me out of bed at 4:00 a.m. I did visit our local mall around 3 p.m. to review the traffic and I was impressed with several stores. Macy’s and The Apple Store had the most traffic. The mall’s general walkways were busy but shoppers were not carrying as many bags as I would have thought. I also visited The Loft that ran door busters until noon and then handed out a very generous coupon for a future date in December. This approach was used last year and it absolutely worked. Some stores that ran door busters in the early hours were missing shoppers later in the day. I visited a Staples store at 11:30 a.m. and it was close to empty. I asked about the morning promotion and they said it was good, but their inventory was low on the key promotional items meaning that several shoppers left unhappy and empty handed. My hat goes off… Read more »
Chuck Chadwick
Guest
Chuck Chadwick
11 years 5 months ago

Traffic up – Sales down…all important metrics. However, are the units of inventory sold tracked?

Cathy Hotka
Guest
11 years 5 months ago

Retailers should pay some attention to Paco Underhill. He had an outstanding column in Sunday’s Washington Post urging retailers to adjust to consumers’ new buying habits. Lavish blowout spending is a thing of the past, and that’s obvious, he notes, in the shuttered storefronts in every city.

The associations might want to conduct a practical dialogue on how to create a more sustainable business model.

Zel Bianco
Guest
11 years 5 months ago

I was impressed with the Target in my area. People were lined up in an orderly fashion at roughly 4:30 in the morning. Target employees walked up and down the line answering questions and giving out flyers and maps of the store and even disclosing how many of certain items would be on hand, etc.

I was there for a flat screen TV whose price was too good to pass up. Plus, my wife and mother in law needed help loading them into the car, so I had no choice but to get up very early on Black Friday. Target even came through the line with hot chocolate with whipped cream on it for all who were on line. Maybe next year, they will have bacon and eggs as well. Good job Target!

Mark Burr
Guest
11 years 5 months ago
All we know at this point is that about a little over 13% more came out for the follies and spent just about 8% less per person than last year. They are numbers. Dice them any way you like to fit your particular perspective. From my view, traffic is good. It means that consumers are looking. Spending less? Maybe. There’s lots of time left. After all, they have been trained to wait. Retailers offering a straight percentage off or a dollar amount off on a total purchase will likely have done better. Those offering a crazy item to a few customers will continue to alienate the masses that couldn’t get the item. Those that offered broadly available savings on their entire selection for a limited time will have offered savings to every customer who chose them over others. Retailers need every customer they can get. Giving each one something is a much more broadly appealing approach. You can see the results in the increases shown by department stores over discount stores. They let the customer… Read more »
Camille P. Schuster, PhD.
Guest
11 years 5 months ago

With all the hype and sales before Thanksgiving, people had time to think and decide what they wanted to purchase. If a retailer happened to have a great deal on the item they wanted to purchase, they showed up to buy it. For those people who now have a tradition of shopping early on Black Friday, they showed up to see if there were good deals on things they wanted. As a result, many people came out. As a result of all the hype the week before, people had decided what they wanted and purchased what they had planned to buy.

Gene Hoffman
Guest
Gene Hoffman
11 years 5 months ago

Retailers should constantly strive to develop a strong, reliable customer base in the changing marketing paradigm, but Black Friday illustrates that there are expanding degrees of desperation in the current retail model.

John Young
Guest
John Young
11 years 5 months ago
Black Friday should be gravy for the savvy retailer who has developed a following throughout the year and offers those customers some real door buster specials on hot merchandise or other incentives, such as 3 days and 2 nights at one of 35 resorts around the country for as little as $3.00 per customer. The savvy retailer knows they will pick up extra business on Friday but they should also know that this is the perfect platform to build a stronger customer data base so that they can do creative marketing to those customers during and after the Christmas season. Yes, the Christmas season is a great venue to get rid of your dogs and I mean really get rid of them at 1/2 off or more, but don’t let them be your main attraction. In other words, you wouldn’t go into a Lexus dealership with $3,500.00, 15 year old Lexus products on the showroom floor with all the new hot stuff in the back lot. Your business should be geared to influence regular customers… Read more »
Tim Henderson
Guest
Tim Henderson
11 years 5 months ago

None of the promos strike me as standouts–including the many Thanksgiving, Black Friday and Black Friday Weekend promos not listed here, as well as the plentiful Cyber Monday promos still littering my in-box. Which one works really depends on the consumer, the brands they prefer, and which gifts they seek to buy for themselves or others.

While Black Friday shopper traffic actually appeared light in my neck of the woods, what strikes me most about this holiday season overall is the vast number of promos. It’s great for savvy shoppers. But in the long run, it’s going to be very problematic for merchants who hope consumers will once again pay full price without receiving some form of discount.

Tony Orlando
Guest
11 years 5 months ago

I know I’m beating a dead horse, but Black Friday is not going to add any profits to anyone’s bottom line, except for Walmart. The lines here in town were ridiculous at Walmart. The mall next door, which is half empty, cannot compete. Matching everyone else’s ad prices makes it very difficult to get traction, and who is going to stop them from doing and saying whatever they want?

The retail landscape ten years from now will be littered with empty storefronts, as online continues to improve in selling almost everything you need. Customer service still matters, but as we condition customers to wait for below cost giveaways, than the profits will keep sliding south.

I don’t have any answers for department stores or other retail formats, but I wish them all well.

angiretlwire dixon
Guest
angiretlwire dixon
11 years 5 months ago

From a retailer’s perspective, the most important goal is to increase the average retail per transaction, and to “not give away too much margin”.

The best consumer response usually comes from BUY ONE-GET ONE HALF OFF. The customer does not seem to equate this with “25% OFF IF YOU BUY TWO.”

In the case of Dick’s Sporting Goods’ promo of “$20 gift card with any purchase of $100 or more,” this sounds a lot more impressive than “16.7% off a purchase of $120 or more.”

As a retail buyer that has been asked by management to submit items for a Black Friday ad that “offer an incredible value” (read way below average retail for the category), I become concerned that this takes the focus away from the rest of the assortment, (that needs to be sold by Christmas).

Kai Clarke
Guest
11 years 5 months ago

BF is all about the lowest prices on the hottest items. The problem is that there are many stores which do not offer enough product (i.e. they only have 5-10 pieces) which is simply an unlabeled bait and switch tactic. If you are going to offer a Black Friday promotion, at least have enough product for people to purchase! How many “incidents” do we have to survive at Walmart and other retailers before this becomes SOP?

Li McClelland
Guest
Li McClelland
11 years 5 months ago

Agree with Bob Phibbs’ observation. I was stunned to see the quote from the National Retail Federation. NRF needs a much stronger and better message (and possibly a new messenger too, depending who came up with, and approved the message.)

Since I stayed cozy inside the house on BF I have no anecdotes or observations to share. The only thing that would have excited me enough to enter the shopping fray that day would have been a coupon (without any tiny print restrictions other than the date) from a favorite store, which offered 40% off any single item of my choice CURRENTLY IN STOCK within a total purchase range or basket of $100 or more. That way, the customer can be the one to decide what the door buster item is personally for them and will possibly pick up some other items along the way.

Craig Sundstrom
Guest
11 years 5 months ago

“In other words, you wouldn’t go into a Lexus dealership with $3,500.00, 15 year old Lexus products on the showroom floor with all the new hot stuff in the back lot.”

I don’t know about John, but having spent Friday at an auto show, I know I would eagerly go into any dealership that was offering thirty-five hundred dollar Lexuses–Lexi?–even if they are 15 years old!

Anyway, for those who might have been too exhausted from their shopping adventures on Friday to read the paper on Saturday, there was an interesting article in the WSJ on the disconnect between (Black Friday) predictions and reality; savvy RW readers might want to set it aside for later reading …like when they’re waiting in the return line.

Phil Rubin
Guest
11 years 5 months ago

Black Friday and Cyber Monday have tumbled to the depths of media and email clutter to the point where little of it sticks. The traffic numbers were good but at a price: the average spend was down and so, I’d be willing to bet, were margins.

The more straightforward offers, particularly those with fewer strings attached (and thus more utility value) were undoubtedly the winners. Of course the media needed to fan the Black Friday flames, particularly because real news was rather slow. The proof will be 60-90 days from now when public retailers report results. Assuming the NRF is remotely close with their forecast, there will be a few “haves” and many more that missed out.