The Super Bowl of advertising is… well, the Super Bowl. For retailers, however, the biggest event of the year traditionally takes place a few months earlier on Black Friday, the day after Thanksgiving.
But, with the proliferation of new options for shoppers, particularly online sales, and an emerging shift in consumer behavior away from traditional retail, does Black Friday still carry the weight it once did with consumers?
Full Contact Shopping
Black Friday’s origins trace back to the 1950s, when it was used to describe the crowds and traffic congestion associated with the Christmas shopping season. There was a brief attempt by some retailers to rebrand the day to “Big Friday” in the ‘60s, but the name never stuck.
A decade later a new etymology took hold. Rather than the horrors of full parking lots and ransacked store shelves, the ‘black’ in Black Friday was said to refer to the accounting practice of writing losses in red ink and profits in black. A merchant that carried losses all through the rest of the year could find its way back into profitability on just the strength of one good holiday shopping season.
Since 2005, Black Friday has been the single busiest shopping day of the year. Tales of bedlam and carnage (some urban legend, some real) are often traded in the days leading up to the big sale, like parents showing their children the battle scars they earned during the Cabbage Patch Kid riots of 1983.
Still Massive, But Growth has Stalled
Today, the toy of choice may have changed, with Hatchimals taking the spot of the doll most likely to cause a brawl in the aisles of Toys “R” Us this year, but the action is no less frenzied. Or is it?
According to figures tallied by the National Retail Federation, Black Friday revenues have almost always grown year over year (other than a minor blip during the Great Recession of 2007-2008).
2005 saw 132 million shoppers spend roughly $26 billion during the Thanksgiving holiday weekend. For 2009, 212 million people spent over $41 billion. Sales peaked in 2013, with 249 million shoppers spending $57 billion.
But, in 2014, with the recession no longer a major threat and the economy picking up steam, Black Friday sales dropped significantly for the first time in years. A massive $50 billion was still spent by 233 million people, but the dip in consumer activity took some analysts by surprise.
Can Christmas Come Too Early?
Some ascribe the downtick in sales to consumer backlash at so-called “Christmas Creep,” the expansion of the Christmas shopping season. Merchants hoping to get a leg up on the competition started rolling out their seasonal wares and promotions earlier and earlier.
Since 2000, hardware chain Lowe’s has started putting Christmas trees in its stores on October 1st, before most shoppers have begun preparing for Halloween, let alone Thanksgiving. This year, in response to customer feedback, Target announced it would avoid putting up Christmas decorations until after Thanksgiving.
Black Friday, is unquestionably still an incredibly important day for retailers. They open their doors earlier (some start the festivities before the sun has risen at four in the morning) and keep the store running later. In 2011, several major retailers including Kohl’s, Macy’s, and Best Buy opened at midnight.
Some Walmart workers staged a walkout in 2012 in protest of a new company policy that most stores would open at 8:00 p.m. on Thanksgiving Day. In three New England states, Rhode Island, Maine, and Massachusetts, there are even laws against requiring employees to work on a national holiday like Thanksgiving.
Challengers On All Sides
Another reason Black Friday has lost some luster is the advent of several competing shopping events. Cyber Monday emerged in 2003 and 2004 as a major online sale held on the Monday after Thanksgiving. An invention of the National Retail Federation’s division Shop.org, it encourages consumers to avoid the in-store pandemonium and get their holiday shopping done from the comfort of home.
The event is still far from surpassing Black Friday in gross revenues, but continues to grow in relevance. $2.6 billion in sales were associated with Cyber Monday in 2014 and that number rose to just shy of $3 billion in 2015.
Some of the world’s largest online retailers have staked a claim to their own personal day of sales bonanzas. Amazon introduced a summer marketing event they dubbed Prime Day in 2015 to celebrate its 20th anniversary.
The one day sale took in over $500 million in 2016, and more than twice that this year, according to some estimates. Their success has spurred other retailers to offer similar promotions, often called “Black Friday in July.”
Asian conglomerate Alibaba has made Single’s Day, a Chinese festival celebrating the unwed, its signature shopping event of the year. Held annually on November 11th, what was originally just a cheeky faux-holiday for unmarried people, generated a staggering $25 billion this year, a 40-percent increase from 2016.
To support this year’s sale Alibaba installed payment processing facial recognition scanners in thousands of its physical Tmall stores in China, held a celebratory kickoff event with international stars like Pharrell WIlliams, Nicole Kidman, and Maria Sharapova, and promoted deep discounts on everything from electronics to clothes to health and hygiene products online.
Has Black Friday Gone Gray?
Despite upheaval in the retail sector overall, the growth of online commerce, and the incursion of rival deal days, Black Friday is still forecast to do huge business this year.
Polls of consumer sentiment by RetailMeNot indicate that 52-percent of Americans plan to open their pocketbooks on Black Friday, a drop of just one-percent from last year. Overall consumer spending is expected to actually rise quite a bit, year over year, though, thanks in part to the popularity of Cyber Monday and online shopping.
The takeaway is that while Black Friday is still a retail juggernaut, its days as the unrivaled king of holiday shopping are possibly over. The new retail environment is more diverse and operates on a multitude of channels, of which in-store sales is just one component.