Natalie Sheridan
Reuter B4
Economics
3 November 2014
Black Friday Weekend
As the holiday season nears, many are excited to spend time with family, eat some turkey, and give thanks. Others are more excited about the days following Thanksgiving, when they’ll spend the waking hours of the morning waiting in line for the best shopping deals of the year. Over the past four years, this shopping phenomenon called Black Friday has soared in overall amount of spending by Americans during the weekend following Thanksgiving. Last year $12.3 billion was spent on Black Friday alone. In 2010 nearly 100 million shoppers were out on Friday searching for the best deals, as shown on the graph, and Saturday’s amount of shoppers the same year was not far behind.
Businesses make anywhere from 20-40% of all their revenue during the holiday season, and in more recent years have taken advantage of Black Friday Weekend and the huge amount of shoppers it attracts. The department that usually receives the most amount of shoppers is the clothing market, seeing as malls open early and most advertisements consumers see are from these clothing stores. Right behind clothing are toys and books/CDs/DVDs etc., parents and grandparents trying to get the best deals on the highly priced toys for little ones. Notice that jewelry is not a popular item, based on the graph below, most likely due to the fact that jewelers don’t give the greatest deals on jewelry that will be bought with or without the deals.
Although quantity demanded during Black Friday weekend is high with the large increase in amount of buyers, suppliers do not supply much more for these few days. Although they do want to attract customers with deals, they don’t want to lose very much money due to the deals. When items run out, they run out. Stores tend not to restock each day, resulting in many rushes towards the areas with the greatest deals and even fights between buyers for the items that are marked at the lowest prices. Businesses don’t offer great deals on inelastic goods; goods that consumers will buy no matter the price, simply because consumers will buy them at full price, so why give them a deal and lose money? These are usually big ticket items that consumers were planning on buying in the first place, even if there was no deal on Black Friday.
Within the past few years, another addition to the Black Friday ordeal is Cyber Monday. The Monday following Thanksgiving is a time for online shoppers to shine. Those who don’t want to bother with crazy discount chasers in person stay behind the screen and take advantage of free shipping and sales online stores have to offer. In 2013 Cyber Monday sales reached a total of 2.29 billion dollars, not quite reaching the amount made on Black Friday, but still very impressive.
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Overall Black Friday has somehow managed to turn holiday shopping into more of a chaotic, stressful process than before. Maybe some will decide to wait a few days and shop online. Clearly it is a successful event for businesses, considering the huge amount of money that is spent in a mere weekend. The deals are sometimes worth it, and sometimes not, so it is ultimately up to the shoppers to decide if the stress of waiting in line and struggling to get ahold of the best products before stores run out is really worth the sleepless night after Turkey Day.
Sources
Balestriere, Vincent, Sally Turner, and Jessica Menton. "Cyber Monday: Behind the Stats [VIDEO]." International Business Times. N.p., 3 Dec. 2013. Web. 03 Nov. 2014.
Carlson, Nicholas. "This Post Has All The Black Friday Stats You Need To Sound Smart In Meetings." Business Insider. Business Insider, Inc, 03 Dec. 2013. Web. 02 Nov. 2014.
Linn, Allison. "Good Graph Black Friday: Holiday Shopping Stats." TODAY. CNBC, 25 Nov. 2011. Web. 03 Nov. 2014.
Maranjian, Selena. "10 Surprising Stats About the 2013 Holiday Shopping Season - DailyFinance." DailyFinance.com. N.p., 13 Dec. 2013. Web. 03 Nov. 2014.
A couple days ago, I asked Mr. Reuter if Black Friday shopping is detrimental or helpful to our economy. He said that although the stock market reaches “the black” hence the name Black Friday, that he doesn’t think that the deals actually stimulate our economy that much. As a consumer though, I can’t say that I mind it. It’s nice to get great deals on things that either you want, or want to give someone for the holidays. Sometimes I feel like stores feel pressured into the fad of Black Friday deals because their competition is lowering its prices, but it’s this perfect competition that I think is a sign of a healthy economy, even though Mr.Reuter is right, “it’s funny how we push people over to get things we don’t need when just 12 hours before we were giving thanks for everything we do have.” Regardless, I personally think that Black Friday is an American culture thing, and with your point that big companies make a huge percentage of their revenue from the holidays, I think that Black Friday is a necessary part of economic monetary flow.
ReplyDeleteBlack Friday shopping as you have said has become a fad that has become just as popular as any holiday. This brings in so much money for our economy and to keep it going will keep our GDP increasing. Even though this is helping our economy it is still bad that most people would rather almost shop to the death instead of spending time with their family and give thanks.
ReplyDeleteBlack Friday is an exciting day in the US. Though I have never participated, and do not intend to, I can support the new holiday. The reason I would not participate is because the advertising and the many deals would probably have me spending every last penny of mine but to other people shopping, I think it is good. It is basically a day based on funnling money back into businesses and the economy.
ReplyDeleteThough Black Friday can be chaotic and often stressful because you lose sleep, it is nice to get good deals on things that you wouldn't normally buy yourself at full price. I feel like many people often due their major Christmas shopping on this day as well as on Cyber Monday and that these two days help our monetary flow in a good way, even if the impacts on our economy are too meager to make a difference. The point is, people are inclined to go spend money because they think they're getting good deals and cutting the expenses made during the holidays.
ReplyDeleteWith black friday being a time of the year when you can find the best deals, people are willing to lose the sleep to get the best deals. This year stores are starting to open even early, to get those people in and spend their money. On Thanksgiving some stores are opening at 6 o’clock, thinking that its a great idea, but they don’t think about the people that are missing Thanksgiving.
ReplyDeleteThis was a good topic to chose sing black Friday is quickly approaching. Black Friday may be chaotic and you will often find yourself sleep deprived it is nice to get good prices you can find any other time of the year. I agree that this event is essential to continuing the monetary flow in our economy and encouraging consumers to buy products. While this shopping event is not going to fix our economy there would definitely be some negative side affects if the day was gotten rid of.
ReplyDeleteI think that supply verse demand on the day of Black Friday like you said is a strategy used by the producer and sellers to make the items more exclusive and limited causing many consumers to go into a frenzy in order to get those items. Over all however I believe that Black Friday now a days has become more about buying items for oneself instead of for others like the intended purpose. None the less, this day is huge both for consumers and producers...with both coming out satisfied.
ReplyDeleteIt makes sense that businesses make most of their revenue during the holiday season and especially during black Friday and cyber Monday. It’s a really smart way to be able to make money during a time that may otherwise be rather slow seeing as people don’t generally want to go out into the cold unless they really need something so black Friday the time when people will buy those items they’ve been thinking about for awhile. Also with cyber Monday, businesses can continue to make even more money after people have decided to go home because now you can shop for those great deal from your house. Overall, black Friday is a really effective strategy for businesses to make more money and it definitely works.
ReplyDeleteIt's not surprising that during Black Friday businesses tend to earn much of their revenue and sell many more produce than usual. However, It surprises me that on Black Friday businesses do not supply much more produce than usual, due to the fear of losing money. I believe that it is a very smart economic decision because if they weren't cautious as to how much they supplied, they could potentially loose money due to all the deals Black Friday has to offer.
ReplyDeleteThough my family likes to shop, we have never really been into intense black Friday shopping; the kind you leave at midnight to do and don't return until 10 the next morning. However, I have noticed a pattern between the stores that do offer great deals and those that don't. Stores like Kohls, Best Buy, Target, ect. offer deals that have customers fighting over. However, higher end stores like Nordstrom do not offer the same type of deals, because they know the type of customers they attract have enough money to pay full price on their items. However, 20% of yearly revenue is a large chunk to make in one season, so the stores that do participate truly are benefiting from Black Friday, especially if they take advantage of Cyber Monday as well.
ReplyDeleteBeing a Black Friday shopper myself, I can relate to this topic. It has been a tradition for as long as I can remember in my family and is something I look forward to year after year. It’s no wonder that so many other people feel the same way I do, after all who doesn’t love a great deal? Due to this great demand for deals I can see why millions of shoppers risk sleep in order to get the perfect shirt or TV for half off. You did a great job relating Black Friday to economics and while I knew that stores made a considerable amount off of holidays, I had no idea it was as high as 20-40%. This was a well written blog post and very interesting to see all the statistics on Black Friday, nice job.
ReplyDeleteI think Black Friday has been a huge success since so many people look forward to this day to to get the best deals for Christmas shopping and other things even though it can be so stressful and chaotic. Sometimes I wonder if standing in a long line to Target or some other store for an hour in the freezing weather is really worth it. I like how they have Cyber Monday the following Monday after Black Friday so you can still get good deals without having to be around the chaos early that Friday morning and you can just sit inside ordering things online. Every year it seems like so many stores are beginning to open up earlier and earlier where it doesn’t even become Black Friday anymore since these stores are opening up on Thanksgiving and more people are just thinking about getting their deals instead of enjoying Thanksgiving.
ReplyDeleteI am a huge fan of Black Friday, and have gone many times. After looking at the statistics, I'm surprised that clothes are the biggest seller, as opposed to electronics. Every year I go, I stand outside of a clothing store along with ten other people. I'll look across the street at Best Buy, and there's a line that wraps around the entire building. If you get a good spot in line, there's no question that the marginal benefit of getting good deals outweighs the marginal cost of waiting in line and getting no sleep. You can always sleep later! I think this topic is very relateable to teens because many of us go out on Black Friday so good job! Although the next time you get a statistic chart, I would be careful because adding together the percentages of your pie chart, it equals over 150%.
ReplyDeleteI really like this post because it is a relateable to Economics and everyday life. After looking at your graphs and other statistics, it surprises me how different I thought some were. Like Brooke, I thought electronics would be first on the list rather than clothes. You always hear stories about that. I also like how you made the point about the inelastic goods. If people are willing to buy a certain product at whatever price, why would they sell it for less and maintain a lower total revenue. They would gain less profit by doing this. I also think Black Friday is a very good thing for the economy. This helps many businesses and companies and with even lower prices for consumers, the demand will go up! Good topic and it was very interesting to read.
ReplyDeleteIt’s crazy to look at the logistics of this crazed holiday. I am a fan of Black Friday shopping and do take advantage of the great deals that are out there for the earlybirds. But I have not participated in Cyber Monday. I completely agree with everything you have to say, and it’s great how you explained the business point of view more than the shoppers point of view, because a lot of the deals are scams and do cause shoppers to fight, and sometimes over nothing. Many people think that this is a shoppers holiday, but really -- like you explained -- its about the businesses and their profit that they get out of this holiday. Way to go!
ReplyDeleteNatalie,
ReplyDeleteI think that this is a great example of holiday economics.I understand why they do not increase the supply of products. By lowering prices, but continuing to supply the normal amount, they create a much higher demand. If there was an unlimited amount of the door-busters, people would not spend hours waiting in line, and a greater amount of product would be sold at the lower price, resulting in less of a profit. I think that the amount spent on cyber Monday will be much higher this year and in the upcoming years because it is easier and often offers different deals than black Friday.
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ReplyDelete