All good things come to an end. And so it is with Black Friday. Black Friday used to be the day that retailers, well, went into the ‘black’. Said differently, it was the day they crossed into profitability. So, by definition, it is, or now was, a big deal.
The last 2 years saw retailers run promotions prior to Thanksgiving and open their doors on Thanksgiving Day. Given this trend, it was expected that Black Friday 2014 would be less impactful. But the decline was quick and happened sooner than I expected.
Pre-Turkey Day promotions were the big driver of the Black Friday blues. The continued growth of online shopping contributed, but it is interesting to note only 2 in 5 shopped online. I expected this number to be closer to 75%. A healthier economy (friendly gas prices and decent consumer outlook) added to the woes of Black Friday, but I suspect customers will be looking for deals and bargains – online or in-store – all the way through Christmas.
According to the National Retail Federation (NRF), sales for the Thanksgiving to Sunday period online and in-store dropped 11% from 2013. I think this statistic underscores a few key points.
First, Black Friday is not what it used to be. Consumers can get bargains on, before or after Thanksgiving. Although I don’t have numbers to back this up, my sense is more folks shopped prior to Thanksgiving, taking advantage of deals and smaller crowds, compared to prior years. Likewise, if a customer misses a Black Friday special, they can visit online or go back to the store after Black Friday, as the deals will still be there.
Second, consumers no longer fight for the doorbuster deals on Black Friday. Remember the video clip of the woman who loses her wig running in a stampede (https://www.youtube.com/watch?v=aeSgBL7gpAk)? Those days are over. Why? Retailers opening on Thanksgiving, plus the deals on Black Friday, are no longer better than online. And why get run over when you can get the same deal online from the comfort of your own home?
Third, consumers are getting smarter and we will continue to watch for deals after Black Friday. We are becoming savvier shoppers and we will do more of our shopping later in the season. Some of us will look for bargains while others will just wait.
An 11% drop in sales is eye-opening, but when looked at in context, it is not alarming. If Black Friday were important as it was in years past, I would be more concerned. But the shopping season is just getting started and given the relatively strong economy, I still expect retail sales to be up 4-5% over last year.
Going forward we will see retailers run their promotions earlier (mid-November) and continue them through Christmas. More retailers will open on Thanksgiving and next year I think you will see a common start time of 3:00 pm. Black Friday will be a non-event and retailers will start looking at the mid-November to first week in December period to gauge the strength of their season instead of the Thanksgiving to Sunday period.
Source: www.ICSC.org; SCT Newswire; Black Friday weekend sales down, holiday sales to rise: Report