Black Friday Still Matters, But How Much?

Discussion
Oct 28, 2009
George Anderson

By George Anderson

With retailers basically setting up holiday displays and running Christmas
sales in July, it is easy to come to the conclusion Black Friday isn’t quite
as important as it once was. While there may be a certain amount of truth
to that, holiday sales scorekeeping still suggests that the day after Thanksgiving
is far from a retail anachronism.

Phil Rist, EVP of BIGresearch, told Marketing Daily, “It’s always
going to be the day for the super deals and the way stores try to get the
money early in the season.”

A study by Accenture suggests consumers may be starting – and finishing
– their holiday shopping earlier this year than in the past. Perhaps that
is because of fewer funds or maybe it is just a desire to have it done with.
Nearly 70 percent of consumers expect to have most of their holiday shopping
completed by Dec. 7. A greater number of consumers also plan to shop on Black
Friday this year with 52 percent ready to brave the crowds versus 42 percent
in 2008.

While consumers may be turning up earlier in stores for the holidays, they
won’t be purchasing unless they get a deal on the products they want. That,
some believe, could be an issue as tightly edited inventories have reduced
choices this year and heavy discounting on an everyday basis leaves little
room for retailers to go much lower and still make money.

Leon Nicholas, director of retail insight at Management Ventures, told Marketing
Daily
, “You may see them buying heavily at discounters, where they
believe inventory will be limited. But while you may see a lot of people
walking through stores like Macy’s, they won’t be buying yet. Retailers
have trained them to wait longer.”

Discussion Questions: Does Black Friday still matter? Do gift card sales
necessitate a new scorecard (timeframe) for judging retailers’ success or
failure during the winter holiday selling season?

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24 Comments on "Black Friday Still Matters, But How Much?"


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David Biernbaum
Guest
11 years 6 months ago

Black Friday, which I anticipate this year might be more of a “break even” Friday, will still be a big deal for consumers because of the day off work for some, and the overall tradition of the event itself. It’s kind of like Halloween for shoppers. It will happen.

Susan Rider
Guest
Susan Rider
11 years 6 months ago

Absolutely! Look at the economy and the average consumer budget. Consumers are looking to spend and to avoid the cost of credit card debt as long as possible. We are about to hit another wave of foreclosures and layoffs; probably the last but the fear factor is still there. The average consumer is delaying purchases to balance their spend. Christmas in July was not as popular because people just don’t have the money. Never fear though, Christmas will happen, although not as extravagantly as past years.

Paula Rosenblum
Guest
11 years 6 months ago

I think Black Friday weekend sales have an emotional impact on retailers. Poor sales will drive many to kick-start promotions early.

I also think that’s unfortunate–but in the game of “Markdown Chicken” the retailer always blinks before the consumer.

Ron Margulis
Guest
11 years 6 months ago

If nothing else, the positive or negative news from Black Friday will have a psychological impact on the economy for the rest of the year and into 2010. The stock market will look very closely at the numbers, as will the government. Retailers and manufacturers look at the numbers to determine inventory adjustments, promotions and markdowns. Real estate companies use the information to negotiate leases. It remains a leading indicator for the economy, both here and abroad.

Doron Levy
Guest
Doron Levy
11 years 6 months ago

The seasonal push did come early this year and I believe it will be reality for some time to come in our industry. Black Friday still has some value as the Ultimate One-Day Sale day. What I would like to see is a gradual buildup to Black Friday. As the weeks progress, the sales get bigger and bigger making the consumer worried about allocation. Strategically, it would be great to capture sales during the build up to BF. That day now becomes a clear-out day and you can easily get rid of your ones and twos.

I think retailers love having those gc sales pushed back into January and February. I mean those are your typical retail dead zones for the year but now you have all this activity because of gc’s. It keeps the bean counters happy.

Dick Seesel
Guest
11 years 6 months ago

Black Friday is no longer the biggest shopping day of the year; it lost that title several years ago. In the depths of last Fall’s slowdown, it may have even lost its crown as the highest-traffic day, too. Nevertheless, it is still an enormous volume day for most retailers and a bellwether for the holiday season.

What should retailers and observers look for this year? Here’s a short list:

1. Who are this year’s winners and losers in terms of foot traffic and “share of shopping bags”? This will give a good sense of overall 4th quarter winners.
2. What’s selling? Is it the traditional Black Friday assortment of doorbuster electronics and toys, or is there any visible shift toward discretionary goods like apparel?
3. How’s the mood? Is the shopper visibly relieved that we all avoided the precipice last fall, or does high unemployment still weigh heavily on consumer behavior?

Charlie Moro
Guest
Charlie Moro
11 years 6 months ago
I think retailers may want to look at Black Friday as an event rather than a destination. With Christmas product already in full swing in many retailers, and the internet so convenient, the object of sales does not need to be Black Friday sales-driven chaos. One of the best parts of the Thanksgiving Day parade in NYC is not the parade, but the blowing up of the balloons the night before. Black Friday for a lot of consumers is an event. A bonding of friends to go out and have a treasure hunt of activities and a conclusion to Thanksgiving. Families are in town and a great way to spend time together is to plan that shopping event. But, what if retailers looked to make their stores destination-based to build their brand and offering on a longer-term basis? Why not have Macy’s offer a Buy-One-Get One-Free lunch in their foodservice areas, free massages at Target, or valet parking at Toys “R” Us? Make the experience that of creating an identification of a ‘why I like… Read more »
Ian Percy
Guest
11 years 6 months ago

All of our problems come from self-inflicted wounds. The moment we start thinking about what we DO want instead of what we DON’T want, our world will change for the better. “We perform according to our fears” said Rochefoucauld back in the 1600s. In other words, we ourselves make happen what we don’t want to happen. Will we ever take responsibility for that? Heck no! That’s what governments are for–to take the blame for our self-defeating mind-sets.

Chuck Palmer
Guest
11 years 6 months ago

Black Friday matters for both rational and emotional reasons for consumers, retailers, and all of us watchers. While it is not the single make-or-break day, it has become the psychological focus and catalyst that drives discussions, understanding, strategy, and ultimately, decisions.

While we all may be nervous about what happens and what it means, for consumers, it offers permission to have some fun and get into the the spirit of giving. That REALLY matters.

Al McClain
Guest
Al McClain
11 years 6 months ago

Black Friday still matters, a lot, but many high-end retailers have wised up over the past year and made major cuts to inventory. Sales may be off or flat, but margins will be better.

Steve Montgomery
Guest
11 years 6 months ago

Black Friday has both real and perceived implications for holiday season sales. The real implications include the items mentioned in the article–super low prices to draw people in, the first large infusion of holiday spending, etc. The perceived implications have more to do with the reporting of the sales–did they meet expectations; higher; lower? This impacts both retailers’ and the customers’ mind set for overall holiday shopping. This may be as or more important that the actual impact of the sales for the day.

Given the discussion yesterday about the sustaining trend towards value and all the news reports regarding reduced inventories, I expect that many consumers will be out that day to be sure that they access those super Black Friday deals. Other than those specific items, and other heavily promoted deals, I would expect many people will begin their spending cautiously. They will wait a while to see if that sweater for Aunt May will go on sale.

Doug Fleener
Guest
11 years 6 months ago

Black Friday will continue to be extremely important for big box retailers to position themselves as the discounter for the holidays.

I do believe it is becoming less important for specialty retailers, and even less for independents. For these retailers, Black Friday is usually low or no margin with no carryover into the holidays. I would emphasize it less and focus more on maximizing the post Black Friday traffic.

Janet Dorenkott
Guest
Janet Dorenkott
11 years 6 months ago

Black Friday will still happen. People will still want deals and many people have shopping traditions with family, based on this day. Retailers will see traffic but I also expect more online shopping on Black Friday.

Mark Burr
Guest
11 years 6 months ago
Black Friday is still it. It sets the tone for the market. It’s a tone that is read by the consumer and the dreaded analysts. This year, it will be extremely interesting. Fuel price is rising. Prior to Black Friday hitting, there will be enough of a spike in gas prices to cause a slight concern. Unemployment is still rising and hasn’t peaked. Regionally, unemployment is a huge factor for this season. Retailers and analysts alike have not found a consistent measurement of the impact of gift card sales, not only for Black Friday, but also for the entire season. There are also a number of retailers tying gift cards into the promotion of Black Friday. This includes retailers like Costco and the like. Let’s also not forget the complexity of internet sales intertwined with promotions toward Black Friday as well. Measuring the results the old way by the tick of the tape at the register in the brick and motor locations just isn’t possible any longer. It’s become much more complex. Many consumers may… Read more »
Tom McGoldrick
Guest
Tom McGoldrick
11 years 6 months ago

Black Friday clearly still matters, however, Morpace released study results on Monday showing that 1 in 5 shoppers indicate that fear of H1N1 may cause them to avoid the busiest shopping days of the year. The following is a link to the MSN money site and which includes a more detailed discussion of our findings.

I wonder if shopping will be more spread out this season. Also, if the flu gets bad, I would look to a great deal of online shopping. There are probably many people home sick right now shopping online.

W. Frank Dell II
Guest
11 years 6 months ago

Black Friday is folklore or a myth, at best. It was based on retailers losing money for 11 months and then making all their profits from Christmas sales. All the retailers using this financial model are no longer in business. It never was a good measure of how good Christmas sales were going to be as the weather can significantly change the numbers.

With the continued increase in online sales, brick and mortar sales represent only a subset of holiday sales. Black Friday makes a great news story but simply means nothing.

Roger Saunders
Guest
11 years 6 months ago
Broadway producers and Hollywood have the formula–“When you open, open BIG.” Black Friday is still a bit of a watershed day for consumers, as they not only react themselves, but they also watch their compatriots in the bazaar. Excitement builds momentum. The consumer is more cautious than normal, however, for all the various reasons that we read about daily. They are going to start their shopping earlier, and they are going to be looking for value. In the September, 2009 Consumer Intentions & Actions (CIA) Survey of 8,500+ Adults, respondents clearly telegraph their plans: — In the next 90 days, 31.5% will “Decrease spending” vs. 25.8% who stated the same position in September, 2007— Fully 34.5% said that they will pay down debt in the next 90 days, vs. 32% taking that action in September, 2007— Of 18 Retail Categories monitored for spend over the next 90 days, the Consumer spending plans are down for all of them vs. September, 2008; on a positive note for four categories — Toys/Games, CDs/DVDs/Videos/Books, Electronics, and Groceries, the… Read more »
Gary Dispensa
Guest
Gary Dispensa
11 years 6 months ago

Black Friday is the most important shopping day of the year. For those who do not believe it, look at the results from several independent purveyors of data. Would it surprise retailers to know that by 9:00 AM on Black Friday 2008, almost 25% of the day’s traffic had already come through mall doors? Savvy retailers be ready for this onslaught of early morning shoppers.

While the retail industry wants more measurement of the day, retailers are loath to put in the necessary equipment to determine the number of shoppers actually coming through their doors. They would rather rely on their POS systems to determine if they are gaining or losing “traffic.” Unfortunately, POS systems do not measure the number of customers who walked without buying. This statistic would be especially useful to retailers this year as many have kept inventories down and may experience stock-outs and thus, lost sales.

Mike Romano
Guest
Mike Romano
11 years 6 months ago

As a mobile marketing services provider to over 100 retailers, I hope Black Friday continues with its historically strong patterns.

As a consumer, I’m not impressed with Xmas trees and light-up Santas at Costco in August. Irrelevant use of shelf space to me, but at least it’s a good laugh for the kids.

Michael Tesler
Guest
Michael Tesler
11 years 6 months ago

Do you really think that great stores like Apple, Target, Lululemon, and the thousands of smaller successful specialty shops live or die by one day or three hours before 9 am on one Friday? Of course not. To them, focusing on every day and every customer is what makes them work so well – not artificially contrived media events and spouting spin and lies to clueless reporters.

Craig Sundstrom
Guest
11 years 6 months ago

Did it ever really matter? Can any one day really matter? To be sure, it always mattered to the media, with the usual suspects trotted out for their once-a-year reading of the retail tea leaves. After year-in-and-year-out of started well/finished poorly or started poorly/finished well holiday seasons, I would hope that people wouldn’t listen any more, but they will. So no, it doesn’t matter, but (many) people still think it does.

Tim Henderson
Guest
Tim Henderson
11 years 6 months ago
Yes, Black Friday still matters–but in a different way than decades past. As noted, BF is still THE day to get super deals, and it’s a day off for many workers, so shopping is likely to enter the picture. And I expect BF will be very important to this year’s savvy shoppers, given their desire to pocket the best deal possible. That said, BF shopping behaviors were gradually changing long before the recession. One difference is that more consumers shop online, allowing them easy access to shopping deals on Thanksgiving, BF and/or Saturday and Sunday. Store hours on Thanksgiving and BF continue to evolve as some chains open earlier and earlier and close later and later–at least for that weekend. And consumers have learned that they can still bag a good bargain during the late morning, afternoon and evening dayparts on BF, meaning there’s no need to camp out at 4 am. Probably the most significant, gradual change has been the actual extension of the holiday shopping season. Long gone are the days whey one… Read more »
William Passodelis
Guest
11 years 6 months ago
I do think Black Friday still matters somewhat for two reasons: 1) Customers have been trained over the last two decades to expect and find super deals early in the morning of the Friday after Thanksgiving and I believe that customers WILL continue to expect those super savings for the hours from “5AM to 9AM” or “as long as supplies last,” ect. 2) I think that these super deals offered by the retailers–while probably not beloved by them by any means–do guarantee them foot traffic and a certain amount of guaranteed, incoming cash. Some cash is better than no cash. I DO hope that the bad times and the expected consumer lack of spending this year helps to stop openings of retail establishments ON Thanksgiving day. I KNOW–I am too old fashioned and too narrow thinking–but do people REALLY NEED to go to Kmart ON THURSDAY? I think NOT and I think another day, of very few, where the emphasis is on family and friends might be a good thing and might even make expectations… Read more »
PJ Walker
Guest
11 years 6 months ago

For those of you who don’t believe that Black Friday is no longer a ‘big deal’ for the consumer, just look at the number of websites and YouTube videos dedicated to listing Black Friday deals, or the 55 page Sears ad in 2008 (that was ‘leaked’ on October 26, 2008–a full month before the date) or the legal threats from some retailers to bloggers who reveal their Black Friday specials in advance. And if you’re still not convinced, then remember the tragic death of a Walmart security guard last year who was trampled as he tried to assist a pregnant woman.

For retailers, I agree with Charlie Moro that retailers should view Black Friday as an “event rather than a destination.”

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