20 September 2015
Black Friday Sales
Although malls always seem to be overcrowded with impatient, pushy people in the early hours of Black Friday, there have actually been less Black Friday shoppers in recent years and sales are on the decline. This video explains the economics of Black Friday, but basically it’s considered the first day of holiday shopping so big sales are advertised to draw even bigger crowds. Black Friday prices typically don’t have much consumer surplus, the difference between what a consumer is willing to pay and what the price is, because they are advertised as such great deals. However, Black Friday has the competition of Cyber Monday and, in the past of couple years, has been losing. According to a CNN Money article, Black Friday had a decrease of 5.1 million shoppers from 2013 to 2014 which is about a 7% decline. This partly accounts for the 11% sales decrease over the four-day weekend of Thanksgiving and Black Friday last year (Wahba). Also, as can be seen on the chart below, the National Retail Federation discovered that the money spent by the average shopper went down by 6.4% from 2013 (Halzack).
While in-store spending around Thanksgiving has been on a decline, online shopping has been raking in the cash. From 2013 to 2014, there was a 14% increase in American online spending on Thanksgiving and a 10% increase on Black Friday (CNNMoney). Consumers with a scarcity of time jumped on the efficiency of at-home shopping on Cyber Monday. Cyber Monday is the Monday following Black Friday when online shopping has sales or incentives such as free shipping. It has much less of a trade-off for consumers: no long lines, no crowds, no driving around at 2 AM, but still the same great deals as Black Friday.
As technology improves the efficiency of Cyber Monday, one can assume Black Friday will continue to follow its decline in sales. Last year, retailers attempted a new tactic of offering deals earlier on Thanksgiving night rather than on Black Friday in the early morning. Walmart even opened its doors as early as six o’clock. The deals spread across the weekend instead of just the morning of Black Friday. This tactic backfired and Black Friday seemed like less of a big event. Consumers had more self-interest in staying at home, buying online, and having their products delivered to them.
This year, retailers should go back to promoting the six hour rush (12 am- 6am) on Black Friday. Their only hope to compete with Cyber Monday is to offer better deals over a short period of time. The online market is a huge competitor and retailers will have to pull out their best deals to win over consumers. Employees may fear the sight of a huge crowd pushing through doors, but it’s a sight that retailers profit from. After all, Black Friday is intended to attract the two things every business depends on: consumers and cash.
Federation, The. "Fewer Shoppers Hit the Stores on Black Friday." CNNMoney. Cable News Network, 30 Nov. 2014. Web. 21 Sept. 2015.
Halzack, Sarah. "Fewer Shoppers and a Decline in Spending during Black Friday Weekend." Washington Post. The Washington Post, 30 Nov. 2014. Web. 21 Sept. 2015.
Kay, Roger. "Black Friday (Thursday, Wednesday..)." Forbes. Forbes Magazine, 28 Nov. 2014. Web. 21 Sept. 2015.
Wahba, Phil. "How Retailers Shot Themselves in the Foot with Early Black Friday Deals." Fortune. Time Inc. Network, 1 Dec. 2014. Web. 21 Sept. 2015.
"Why Black Friday and Cyber Monday Don't Really Matter Any More." Bloomberg.com. Bloomberg, 1 Dec. 2014. Web. 21 Sept. 2015.