In the Black
Oct 31, 2014 05:00AM
By Jason Huddle
By: Kimberly Cassell
While the above term typically refers to a business being in good financial health, it’s also come to represent the “black” days that signify the annual start of the Christmas holiday shopping season in the U.S.“Ever since the start of the modern Macy’s Thanksgiving Day Parade in 1924, the Friday after Thanksgiving has been known as the unofficial start to a bustling holiday shopping season,” blackfriday.com explains.
In 1960s Philadelphia, police negatively used the phrase Black Friday when they were forced to contend with congested traffic and hoards of pedestrians taking advantage of the holiday sales. Even though the day has never been given U.S. holiday status, many employed Americans get the day off as part of their Thanksgiving holiday.
For those hardy enough – and knowing they don’t have to go to work – typical Black Fridays have meant getting in line in front of a store (or camping overnight) in time for doors opening at 5:00 or 6:00am. The mad rush for a usually limited number of door-buster sale items has resulted in trampling, shopping cart crashes, pepper spraying and fighting. However, retailers wouldn’t go though the angst of making sure they had the necessary number of employees working, having to essentially pull an all-nighter to ready the store for the onslaught or deal with not-so-polite crowds unless the event was a money maker.
It’s as if merchants welcome the chaos, with blackfriday.com saying, “Most large retailers post their Black Friday ad scans, coupons and offers online beforehand to give consumers time to find out about sales and plan their purchases. Other companies take a different approach, waiting until the last possible moment to release their Black Friday ads, hoping to create a buzz and keep customers eagerly checking back for an announcement.”
Some retailers even offer loss leaders – pricing some items so low that the store may not make any money on their sale. They bring the shoppers in, though, who will, more often than not, spend their money on other items while there.
So, who makes up the largest age group of Black Friday shoppers? Not surprisingly, 72 percent of those between the ages of 18 and 34 – the Millennial Generation – shopped on Black Friday last year, according to the National Retail Federation (NRF). And 36 percent of millennials shopped on Thanksgiving Day.
Subsequent age groups showed similar figures until the 55 and above group. That’s where the numbers dropped.
What are these consumers buying? The NRF says nearly 60 percent of shoppers bought clothing and accessories in 2013 while about 38 percent purchased the ever-popular electronics and computer-related products. Books, CDs/DVDs and videos/video games ran neck-and-neck with toys – both categories at around 35 percent.
The NRF says, “The holiday season is generally responsible for 20 to 40 percent of a retail store’s overall sales, with Black Friday (along with the remainder of the weekend) accounting for 10 to 15 percent of those results. Black Friday has also become a leading indicator of the strength of consumer spending for the remainder of the year, and by extension, the overall health of the U.S. economy.”
That’s reflected in 2013’s figures. While total November/December holiday spending was up by 3.1 percent, it’s estimated that consumers spent $57.4 billion during Black Friday weekend with 141 million shoppers spending an average of $407.02 each. That’s down from $423.55 in 2012 when $59.1 billion was spent by fewer shoppers. That 2.9 percent decrease is the first since 2009, but new marketing initiatives have few retailers concerned.
That’s because, in 2011, brick-and-mortar stores like Walmart, Target, Kohl’s, Macy’s and Best Buy opened their doors at midnight on Black Friday; this was a first. While some consumers were shocked that the shopping extravaganza could intrude on their Thanksgiving holiday, others clearly saw it as an opportunity to snap up deals. And retailers have run with it.
Last year, these same stores – and more – announced they’d be opening when Americans were barely finished swallowing their last bite of turkey – usually between 5:00 and 8:00pm. Kmart ran the marathon and opened at 6am on Thanksgiving morning, staying open for 41 hours straight. This year pushes the envelope yet again, with stores opening earlier than last year. Case in point: Macy’s. Along with Walmart, and Best Buy (Target had yet to announce their intentions as of press time), they’ll open their doors at 6:00pm on Thanksgiving. Kmart will open at 8am.
Steve Osburn, a director at Kurt Salmon, a management consulting firm, says, “Consumers have started to accept that shopping on Thanksgiving is a growing habit. With consumer acceptance comes more people shopping.”
The tactic is viewed as a latch-ditch effort to end the year on a positive money-making note, but the idea of “Gray Thursday” continues to divide American households.
The commercialization of – and bombardment on – Thanksgiving Day doesn’t sit well with those who view it as a beloved American holiday. Instead of happily visiting with family members, store circulars are frantically being pored over to determine where the shopping will start in just a few short hours. And the holiday turns into another (very long) workday for retail employees.
Some 725,000 to 800,000 seasonal employees could potentially be hired in the U.S. this year, according to NRF.
On the other side of the coin – no pun intended – retailers see the increasing competition generated during this all-important financial weekend and want to be the “first” to grab the buying audience. Thus, they’ll open whenever and reduce prices to whatever it takes, even if it means hearing from the naysayers who don’t agree with them being open on Thanksgiving. They’re targeting the consumers that simply cannot miss out on the deals, even if it simply means waiting until the next morning.
Taking that into consideration – and the fact that “greater than 90 percent of all retail sales are still generated in brick-and-mortar stores,” according to ShopperTrak – it makes sense that Thanksgiving will capture some of Black Friday’s revenue.
There are those, however, who see no allure in waking up in the wee hours or bundling up to stand outside a store. Cyber Monday is the ticket for them. No getting into a store only to find out the item they wanted had sold out. Instead, with the press of a computer key, they can find that item in their virtual store and proceed to “check-out.”
“Many online retailers have pre-Black Friday or special Thanksgiving sales, so you may not even have to wait until the big day to save,” blackfriday.com adds. Others offer incentives, like coupon codes and free shipping.
Cyber Monday got its name in 2005 when shop.org witnessed the upswing in Internet sales and the number of people taking advantage of them online. “Between 2006 and 2011, online sales doubled to over $1.2 billion on Cyber Monday,” according to shopify.com. “Online retailers promote Cyber Monday using a variety of Internet marketing strategies, including smart phone advertisements. Comparison shoppers with smart phones connected to the Internet can easily find the hottest deals with the press of a button. Many online retailers have apps that allow smart phone users to look up products in their store. As a result, the buyer has an opportunity to explore other online stores for steeper bargains.”
In that respect, the Internet also serves as a research tool, allowing the consumer to bargain shop various stores before making a purchase. Even if the shopper prefers to see the item up close and personal and ultimately make the purchase in a brick-and-mortar store, they have the ability to narrow down – and single out – their choices.
The savvy retailer caters to both in-store and online customers. According to shopify.com, “Many retailers promote online sales in their brick-and-mortar stores, and in-store sales on their business websites. Retailers have sent email coupons to promote online and in-store deals through newsletters. Email coupons contain special codes redeemable at the time of purchase. Retailers may also use QR codes for online shoppers to use while shopping in their brick-and-mortar stores.”
In October, the National Retail Federation announced that it “expects sales in November and December (excluding auto, gas and restaurant sales) to increase a healthy 4.1 percent to $616.9 billion, higher than 2013’s actual 3.1 percent increase during that same timeframe.”
At the same time, shop.org expects online holiday shopping during the same period to increase by 8 to 11 percent over 2013, possibly reaching $105 billion.
It’s definitely a personal choice as to how we as Americans prefer to spend our Thanksgiving holiday. Black Friday, for some, has evolved into a tradition – getting up before daybreak even if they’re not on the prowl for a big-ticket item. It’s all about the experience. Others prefer to forgo that experience, kicking and screaming all the way to their laptop. Regardless, let’s remember the reason for the season.