Will Black Friday’s slump change the promotional calendar?

Discussion
Dec 08, 2014

Many are wondering what Black Friday’s surprising sales drop will mean for the promotional calendar for the rest of the year.

On the Sunday after Black Friday, the NRF projected that the four-day Black Friday weekend sales tumbled 11 percent. The trade organization blamed the decline largely on promotions coming earlier and savvy shoppers waiting later for bigger deals in coming weeks. Frequent and extended Black Friday and Cyber Monday deals are expected to complicate predictions for the big holiday shopping days.

ShopperTrak had already predicted on Oct. 30 that Super Saturday would exceed Black Friday sales for the first time since 2005. It attributed the change to early promotions, increased Thanksgiving Day shopping, and more days to shop between Halloween and Black Friday.

ShopperTrak also said that, with Christmas Day falling on a Thursday this year, Dec. 26 will see higher traffic.

"December 26 is traditionally a strong traffic day," said ShopperTrak founder Bill Martin, in a statement. "By virtue of the fact that it falls on a Friday this year, many consumer will extend the holiday to create a long weekend. We expect this to lead to a flood of shoppers taking advantage of post-Christmas sales."

Of course, Black Friday weekend’s apparent shortfall will alter the promotional cadence in December.

"I think ones that you see offering significant discounts are the ones that didn’t move the inventory they were supposed to over the holiday weekend," Jenn Markey, vice president of marketing for 360pi, the online pricing checker, told USA Today.

Analysts also told MarketWatch that the record Cyber Monday sales by Walmart, Groupon and others will affect retailer’s fourth-quarter profits because of free shipping offers and online consumers making more targeted and less impulse-driven purchases.

How will Black Friday’s apparent shortfall and the extended shopping season change December’s promotional calendar? Overall, is the extended shopping season and spread of Black Friday-like deals healthy or unhealthy for retail’s bottom line?

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21 Comments on "Will Black Friday’s slump change the promotional calendar?"


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Bob Phibbs
Guest
7 years 5 months ago

Let’s be careful quoting the NRF’s survey as fact. The 11 percent drop was not a fact, it was people’s opinion. If there’s one thing that is certain in retail it is that it is a creature of repetition. I don’t think anything will change in 2015 around Black Friday—honestly, what else do they have to offer?

Paula Rosenblum
Guest
7 years 5 months ago

It’s easy to be snarky and say “Is this when we get to say ‘we told you so’?” but that’s not terribly productive.

This is an incredibly unfortunate situation. If the days AFTER Christmas become the most important shopping days of the season, then truly, we are in a terrible retailing situation. Sociologically, it’s less troubling to have people out shopping on December 26 through 28 than it is on Thanksgiving, but as a person whose lifelong roots are in retail, it’s far more disturbing.

That puts us just inches away from deals starting at 2 P.M. on Christmas Day. As a Jewish person, that just threatens my annual Chinese food fest. As a student of sociology, it’s worrisome.

As retailers, we have to now think about a whole new selling and buying cadence. It’s a tricky one. Ideally you’d want to minimize inventory investment so that you’re not trapped into markdowns. But with sourcing so far from the point of demand, that’s not so easy to do.

This is an incredibly unfortunate situation.

Chris Petersen, PhD
Guest
7 years 5 months ago

The bottom line is that retailers don’t have any say in the matter. Nor do deeper discounts on Black Friday necessarily generate more sales.

It is all about how consumers shop. It is no longer a point in time, but a constant stream of omni-channel shopping.

Woe be it to the retailers expecting to move huge volumes on promotional discounts. Specific-day promotions simply don’t drive traffic or conversion when online deals span a week and even a month.

Frank Riso
Guest
7 years 5 months ago

I do not think that the one-day slump will be an issue for retailers. It is the total sales for the season that matter. A lot of shoppers seem to be spreading out their spending over many days of shorter trips, especially with gas prices dropping. So lets not decide now that sales are down but wait until we add things up in January. I think it should be a better year in total. That being said, we should see great sales promotions for the rest of the year. Shopping late may reward those shoppers with greater savings.

Peter J. Charness
Guest
7 years 5 months ago

I bet it will erode margins over the month, as the sales will now have to extend over a longer period of time, and making up the difference will require a longer promotional period.

Kelly Tackett
Guest
7 years 5 months ago

Yes, changing shopping patterns are going to change December’s promotional calendar, but I don’t think there’s going to be an industry-wide or uniform shift to another marquee sales day(s). It’s going to be consumer-led rather than retailer-driven.

Separately, Black Friday doorbusters tend to be loss-leaders, and I can’t see that as a sustainable model for retail’s bottom-line.

Phil Rubin
Guest
Phil Rubin
7 years 5 months ago

The changes will be relative, as most retailers are so entirely promotional that the incremental activity will be largely lost in the clutter.

Ralph Jacobson
Guest
7 years 5 months ago

Because so many merchants started earlier than the actual Black Friday with their heavy promotions, I feel a good portion of business was already spread across more time than in past years. Going forward, the discounts will continue to be a virtually continuous flow leading up to December 26. Whether this is healthy or not remains in the hands of the buyers and marketers within these merchants. We are seeing more tonnage of product movement at lower selling prices, so revenues are down, however in many areas, actual item movement is up.

Also, since a huge portion of holiday season purchases are actually intended for the purchaser as opposed to being gifts, December 26 may prove to be very successful due to how the date falls this year.

Tom Redd
Guest
7 years 5 months ago

This year was a tough retail year and promo was all year long. Black Friday came in low and pre- and post-Christmas will be strong.

People want to spend—maybe they spend too much on phones and Fitbits and are low on cash?

Tune the promos to the shopper and ignore our past. Unfortunately it is gone.
Being part-Jewish I will have a Pizza fest—Chinese during the holidays is no go. Messes up holiday cookie flavors.

Lee Kent
Guest
7 years 5 months ago

If these numbers are indeed fact, I can only say that the consumer has spoken! They don’t want to be told that to get good deals they must crawl out on Thanksgiving Day or the wee hours of the following day to get them.

And before we jump on the promotional calendar, what does their inventory look like? Did they really overstock counting on these promotions? This story is not over until the fat man gets here.

… and that’s my two cents.

Marge Laney
Guest
7 years 5 months ago

The race to the bottom with price promotions is popular anytime. Retailers have trained their customers that the closer to Christmas Day the better the discount and if they can stomach the wait, a bigger discount bonanza begins the day after Christmas for what’s left.

In any given holiday season consumers are going to spend X. If retailers spread their promotions out over two months instead of one their customers aren’t going to buy more, it’s simply going to cost the retailer more.

Mark Burr
Guest
7 years 5 months ago

Consumers have been changing the “promotional” calendar for a long time now regardless of how retailers plan their promotions.

The onset of gift cards a long time ago had an impact. Adjustments in Black Friday have had an impact. Online shopping has had an impact and it will continue to have an unimagined impact into the foreseeable future.

While the “deal” may have some influence on consumer activity, consumers will set the pattern based on their perceptions of value. The “deal” is only one of many factors that consumers will consider.

Retailers’ current, vain attempt to stimulate activity through the “deal” while degrading the customer experience may have negative affects on profitability. Retailers that calculate the consumers value equation well by considering all of the factors including experience could have the greatest positive impact on their profitability.

Joe Mazloom
Guest
Joe Mazloom
7 years 5 months ago

Retailers need to return to the traditional Black Friday cadence and stop this non-productive oneupsmanship with store hours and starting Black Friday pricing ahead of the day. Retailers have lost confidence in their selection of Black Friday specials’ ability to draw crowds.They need to go back to the drawing board and re-think their pricing strategies and come up with compelling offerings. Breaking the sale early, adding hours and opening up on Thanksgiving are not the answers.

Shep Hyken
Guest
7 years 5 months ago

It’s not about one day. It’s about the season. It’s about the economic climate over an extended period of time. The big stores reporting numbers have more competition than ever. Competitive pricing means items may be priced even lower than last year. Black Friday has become a week-long event rather than a big day. Let’s see how it all shakes out by the end of the eyar before we start preparing for the end of retail as we know it.

Lee Peterson
Guest
7 years 5 months ago

You basically just have to re-think the week. Which is what it is now, a week, vs a day. And it’s 24-7 too, btw. And then let’s call it what it really is, “Discount Week America,” something more fitting like that. I doubt many retailers are in the black with all the giveaways I saw this year anyway, so why keep a false name?

If your brand relies on big deals/price to drive sales, you do not have a strong brand, you have a price-based brand. Which makes you a commodity and very vulnerable to just about anybody on any given day, but now mostly to the online giants like Amazon and Alibaba. No price brand is ever safe, no matter how big you are. Price is only one of the key P’s, and if it’s your only one, it’s only a matter of time before you get dethroned.

Jerry Gelsomino
Guest
7 years 5 months ago

I am sure the shortfall will change December’s promotional calendar. Shoppers and media critics have become very knowledgeable about where and when to shop. Keeping track of online and social media should tell retailers where the shoppers are going.

Robert DiPietro
Guest
7 years 5 months ago

Multichannel consumers are changing the meaning of Black Friday. It’s longer necessary to go out at 4 am and fight the crazies to get the best deals when you can monitor and buy online.

The other trend is the retailers are extending the deals before Black Friday and “draining the swamp.”

Gordon Arnold
Guest
7 years 5 months ago

There are many important notices that we have from this year’s Black Friday sales reports that need amplification and further exploration. As e-commerce marches through the middle of the the retail playing field, the demand to enhance impulse sales is growing much more evident in the bleeding bottom lines. Even more important is the development of meaningful sales demographics designed to encompass a 21st century retail customer’s whereabouts, wants and purchase habits. As a group retailers are refusing to acknowledge the limited value of 20th century marketing measurement methods and, as we see here, are often surprised with any and all significant result variations whether positive or negative.

W. Frank Dell II, CMC
Guest
7 years 5 months ago

Black Friday had a decline and Cyber Monday had an increase in sales, but Black Friday’s sales are 4 times Cyber Monday’s. What I think we will find when the dust settles is consumers started shopping earlier and online retailers were more aggressive in an effort to move volume forward. Cyber retailers do not want a repeat of last year’s failed deliveries. For store retailers, I think spreading out the sales is a help. Stores should look better and customers should receive better service. The big factors depressing the bottom line is out-of-stocks and excessive promotional discounting.

Jonathan Marek
Guest
7 years 5 months ago

Dr. Phibbs is right. The NRF survey isn’t a factual view on retail sales. You need to look at real sales data.

My company publishes the APT Index, which is based on real sales data from actual brick-and-mortar registers. We saw a 3.5% year-over-year decline for the full weekend (Thursday through Sunday), though the rest of November outperformed prior year. So still not a rosy picture but not nearly as bleak as the NRF survey number.

Arie Shpanya
Guest
7 years 5 months ago

Just because sales dipped on Black Friday, it doesn’t mean that retailers are doomed this holiday season. In fact, I think the opposite is true.

Amazon started “Black Friday” on November 1st. If that wasn’t a sign of a different kind of holiday shopping season, I don’t know what is. I think that more promotions are better, within reason. Highlighting and discounting certain products is a great way to get different customer segments in-store or onto your site. All shopping isn’t done on one day and I think retailers will see their overall holiday sales and profit up if they do the right promotions at the right intervals.

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