People wait in line to buy televisions as they shop during an early Black Friday sale at a Best Buy store on Thanksgiving Day Thursday, Nov. 22, 2018, in Overland Park, Kan. (AP Photo/Charlie Riedel)ASSOCIATED PRESS
Flexing my Nostradamus-like prophetic muscles I’m going to make a bold prediction. Turn on a news channel right now and you are likely to find a reporter standing outside a big-box retailer or inside a suburban mall opining about how Black Friday sales are going. Now I know facts and science have fallen out of favor in the current US administration, but I can only laugh when the length of the line outside a Best Buy–or the number of shopping bags people are carrying through the Short Hills Mall are supposed indicators of holiday retail trends.
I will admit that I have been more than a little Grinch-like about both Black Friday and its unfortunately named cousin “Cyber Monday” for some time. While it’s an exaggeration to say it’s all much ado about nothing, there are a few inconvenient truths about Black Friday that are worth remembering.
It’s not the biggest shopping day of the year. That will be December 22nd. I promise.
The deals are rarely all that good. Certainly many of the so-called “door busters” offer real savings, but bear in mind the best promotions usually have limited quantities and represent a minute percentage of any given brand’s offering. For the rest of the store discounts are typically better as we approach Christmas or, even more so, in the week after.
It’s less and less important every year. As online shopping continues to grow (my guess is an increase of ~ 16% this holiday season) the brick and mortar contribution piece is contracting. More importantly, in the last several years, many retailers offer discounts in advance of the actual day, and then extend those discounts over the weekend. And of course a lot of retailers are now open on Thanksgiving. This all serves to spread out consumer spending over the days before and after the actual Black Friday.
A great Black Friday (or Cyber Monday) is largely meaningless. Despite all the attention and craziness, for most retailers, less than 5% of total November/December sales occur on Black Friday. Given the heavy discounts the contribution to seasonal gross profits is even less. Studies over the past decade have also shown that Black Friday success has little correlation with overall holiday performance. So move along, nothing to see here.
It’s far more cultural phenomenon, than useful shopping event. Does it make sense for retailers to extend their shopping hours, incur greater hassle and take a margin hit just to drive sales to this one day? Is it rational for so many consumers to get up super early, wait in massive lines and deal with throngs of people to get the exact same stuff you can get ordering from the comfort of your home only to have it show up hassle free at your home or office a couple of days later? No, we do it because we’ve always done it and because of the self-reinforcing media trap.
Isn’t it ironic? On Thursday, in the US at least, most of us are all grateful and thankful and reflective. On Friday, we push through the tryptophan and carb loading hangover and turn into weapons of massive consumption.
Please don’t tell anybody but one of my dirty little secrets is that despite my alleged “retail influencer” status I haven’t stepped inside a retail store or mall on a Black Friday in many years. It’s caused more than a few people to say “what kind of retail analyst are you anyway?”
My answer is always the same: The sane and serene kind.