Doors, Myths Busted

Black Friday Is Far From Dead

The biggest online shopping days happen around this supposedly endangered event.
Photographer: Andrew Burton
AMAZON.COM INC
-13.07
At Closing, February 16th
1448.69 USD

Now that we've all eaten plenty of turkey and fallen asleep on the couch watching football, it's time for yet another Thanksgiving weekend tradition: declaring Black Friday dead.

This has been a common theme in analysis and media reports about retail's annual deal extravaganza for years now. 

As online shopping grows, there's less incentive to wait outside in the cold -- in a line that might be hundreds of people deep -- to get a good price on a giant television. You no longer need to shop on Black Friday to get a promotional price, as retailers now blare the discount siren throughout November and December.

And recent years have brought a steady stream of stories about dying malls and store bankruptcies piling up into a "retail apocalypse." If the whole industry is in free fall, the logic goes, then surely the Black Friday tradition is going down with it.

The Death of the Department Store

But if I were a retailer, I would tune out the funeral dirges being played for Black Friday and listen instead to what I assume your sales numbers are telling you: The occasion is still critically important. And in at least one way, it might be getting even more important.

Let's start with the big picture: According to a survey by the National Retail Federation, roughly 115 million Americans plan to shop on Black Friday this year. And about 32 million plan to shop on Thanksgiving Day, when big-name players such as Best Buy Co. Inc. and Macy's Inc. are set to open their doors for their Black Friday sales. 

Filling Santa's Sleigh

Based on a consumer survey, NRF projects Black Friday will hang onto its crown as the busiest shopping day of the long weekend

Source: National Retail Federation

Sorry, but if tens of millions of people plan to do something, then it's hard for me to pronounce said activity dead. 

And shoppers indeed have good reason to pull out their wallets over this long weekend.

It's true you can nab some kind of discount throughout much of the holiday run-up. Amazon.com Inc., for example, began touting "More than 50 days of holiday deals" back on November 1.

But research from Adobe Digital Insights finds that the best prices of the season for online shoppers across a variety of categories are likely to be found this weekend. (And because retailers tend to offer the same deals in stores that they do online, it's fair to assume this pattern at least roughly holds true in brick-and-mortar stores.)

Price Check

Despite the fact that deals are in abundance throughout the holiday season, Adobe projects average prices still will be lowest in many key categories over this long weekend

Source: Adobe Digital Insights

As long as retailers keep encouraging Black Friday shopping with such pricing patterns, legions of shoppers will keep braving the crowds or filling up their digital shopping carts during this event. 

That brings me to what I think is a particularly important aspect of Black Friday's transformation. In the online channel, as you might expect, Black Friday and Cyber Monday are easily the biggest spending days of the season.  

Ka-ching!

Adobe's forecast for the holiday season shows that Black Friday and Cyber Monday still hold outsize importance, even as retailers offer plenty of discounts on other days

Source: Adobe Digital Insights

But what's noteworthy is that these days are also projected to be the fastest-growing of the season, with Black Friday online sales expected to grow 16.4 percent over last year and Cyber Monday expected to increase 16.5 percent. (Adobe's forecast for the season overall is a 13.8 percent increase in sales from a year earlier.)

As Tamara Gaffney, a senior director at Adobe Digital Insights, points out, it is remarkable that sales on these days are expected to see such strong growth from an already massive base.

In other words, in the online channel, spending is only getting more concentrated on these major deals events. 

So, in a way, the stakes are just getting higher for retailers to get these sales right. That means making sure their websites don't slow or crash under the pressure of heavier traffic. And it means making sure they're not out of stock in key items and that supply chains are ready to quickly fulfill a crush of orders.

All of this makes it hard for me to join in the chorus of people that completely write off Black Friday. The bonanza is surely different than it was back in its '90s and early 2000s glory days, when you regularly saw scenes on the local news that brought to mind the wildebeest stampede in "The Lion King."

The event is less store-centric now, and the deals are spread over longer stretches of time. But it is still a monster sales occasion and a key opportunity to build brand affinity and loyalty with shoppers. In this highly competitive retailing environment, that's something big chains can ill afford to squander. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

    To contact the author of this story:
    Sarah Halzack in Washington at shalzack@bloomberg.net

    To contact the editor responsible for this story:
    Mark Gongloff at mgongloff1@bloomberg.net

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE