With the Thanksgiving weekend now history, it is time for retailers, manufacturers, shoppers and, of course, the media, to look back and examine the facts and implications of the first “official” shopping weekend before the late December holiday season. Commonly known as “Black Friday” by retailers that create enormous deals and subsidize significant discounts in order to lure shoppers into the store, the day after Thanksgiving has become a day on which – by tradition – shoppers hit the stores early and often, spurred on by commercials and advertising promising them unprecedented deals that will not be available later in the season (unless, of course, sales are not up to expectations, in which case bigger and better discounts become a likelihood).
• The National Retail Federation (NRF) posted a press release calling “Black Friday” a “blockbuster” beginning to the holiday shopping season, and estimated that 145 million shoppers hit the stores and cruised the Internet looking for merchandise, spending an average of $302.81 apiece over the weekend. The total sales for the weekend, according to the NRF, were $27.8 billion, up almost 22 percent over $22.8 billion spent during the same weekend a year ago.
NRF also reported that “more than 60 million shoppers headed to the stores on Black Friday, an increase of 7.9 percent over last year. Another 52.8 million shopped on Saturday, a rise of 13.3 percent over 2004.” The NRF survey said that “the majority of shoppers headed to discounters (60.7%), though department stores (47.0%) and specialty stores (41.2%) also saw strong traffic. As expected, online retailers also had a solid weekend, with nearly one in three consumers (27.4%) choosing to do some of their holiday shopping over the Internet.”
• The Chicago Sun-Times, however, characterized the opening shopping weekend of the holiday season as “lukewarm,” saying that “according to ShopperTrak RCT Corp., which tracks total sales at more than 45,000 retail outlets, the overall sales on Friday were relatively unchanged compared to a year ago, despite bigger discounts and longer hours that drew a surge of shoppers to stores in the early morning.”
And, the Sun-Times wrote, “total sales Friday (were) $8 billion, down 0.9 percent from a year ago.”
• The New York Times reported that while discount chains seemed to do well during the weekend’s shopping kickoff, consumers largely avoided smaller and specialty stores.
The 0.9 percent drop in sales on “Black Friday,” according to the NYT, “contrasted sharply with rosy reports from discount chains with locations outside the malls. Wal-Mart reported that a record 10 million shoppers had walked through its doors before noon Friday. In a prerecorded phone call over the weekend, the discount giant said that Friday sales had ‘exceeded plans’ and that consumers continued to shop after deep discounts ended at noon.
“One possible explanation for the in-the-mall, outside-the-mall disparity: discount chains, led by Wal-Mart, blitzed consumers with advertising before Thanksgiving, opened their stores earlier than last year and offered the most buzzed-about discounts, like a $188 dollar 15-inch flat-panel television set (at Circuit City) and a $77 digital camera (at Staples) – a combination with which it was tough for smaller stores and chains to compete.”
• The Wall Street Journal reports this morning that while “retailers are slashing prices and offering low-cost financing on goods from jewelry to laptops,” moves that will increase sales, “retailers' earnings are likely to get squeezed as price wars eat into margins already under siege from high energy costs.”
Analysts tell the WSJ that “holiday price wars this season could be the fiercest in years, catching less-nimble retailers flat-footed.”
• Wal-Mart reported that more than two million customers walked in the front doors of its US stores during just the first two hours they were open on Friday morning; Wal-Mart had decided to open at 5 am, an hour earlier than last year. The company said that its most popular item was a Hewlett-Packard Co. desktop computer for $398.
• Even online retailers hoped to jump-start their holiday sales. The Wall Street Journal reported that “although the Monday after Thanksgiving normally sees a big jump in online sales as workers return to their offices, online retailers began posting special discounts on Thanksgiving to jumpstart sales. E-commerce sales for Thanksgiving on Visa-branded debit and credit cards were $205 million -- an increase of 41% over Thanksgiving last year, according to Visa USA. The number of Visa cards issued this year increased by 7% from last year.”
• Amazon.com released a list of all its top selling gift items, broken out by category, for the month of November. In the gourmet food segment, the top three were: a Deluxe Holiday Tower from Harry and David ($49.95), a Ghiradelli Chocolate Holiday Tower ($28), and Our Famous Kona Coffee Holiday Sampler ($35.95).
• Numerous reports from around the country noted that Wal-Mart shoppers got a little testy over the weekend as they looked to take advantage of advertised discounts and limited supplies of certain products, with various fights and tramplings reported in places such as Florida and Michigan.
• The National Retail Federation (NRF) posted a press release calling “Black Friday” a “blockbuster” beginning to the holiday shopping season, and estimated that 145 million shoppers hit the stores and cruised the Internet looking for merchandise, spending an average of $302.81 apiece over the weekend. The total sales for the weekend, according to the NRF, were $27.8 billion, up almost 22 percent over $22.8 billion spent during the same weekend a year ago.
NRF also reported that “more than 60 million shoppers headed to the stores on Black Friday, an increase of 7.9 percent over last year. Another 52.8 million shopped on Saturday, a rise of 13.3 percent over 2004.” The NRF survey said that “the majority of shoppers headed to discounters (60.7%), though department stores (47.0%) and specialty stores (41.2%) also saw strong traffic. As expected, online retailers also had a solid weekend, with nearly one in three consumers (27.4%) choosing to do some of their holiday shopping over the Internet.”
• The Chicago Sun-Times, however, characterized the opening shopping weekend of the holiday season as “lukewarm,” saying that “according to ShopperTrak RCT Corp., which tracks total sales at more than 45,000 retail outlets, the overall sales on Friday were relatively unchanged compared to a year ago, despite bigger discounts and longer hours that drew a surge of shoppers to stores in the early morning.”
And, the Sun-Times wrote, “total sales Friday (were) $8 billion, down 0.9 percent from a year ago.”
• The New York Times reported that while discount chains seemed to do well during the weekend’s shopping kickoff, consumers largely avoided smaller and specialty stores.
The 0.9 percent drop in sales on “Black Friday,” according to the NYT, “contrasted sharply with rosy reports from discount chains with locations outside the malls. Wal-Mart reported that a record 10 million shoppers had walked through its doors before noon Friday. In a prerecorded phone call over the weekend, the discount giant said that Friday sales had ‘exceeded plans’ and that consumers continued to shop after deep discounts ended at noon.
“One possible explanation for the in-the-mall, outside-the-mall disparity: discount chains, led by Wal-Mart, blitzed consumers with advertising before Thanksgiving, opened their stores earlier than last year and offered the most buzzed-about discounts, like a $188 dollar 15-inch flat-panel television set (at Circuit City) and a $77 digital camera (at Staples) – a combination with which it was tough for smaller stores and chains to compete.”
• The Wall Street Journal reports this morning that while “retailers are slashing prices and offering low-cost financing on goods from jewelry to laptops,” moves that will increase sales, “retailers' earnings are likely to get squeezed as price wars eat into margins already under siege from high energy costs.”
Analysts tell the WSJ that “holiday price wars this season could be the fiercest in years, catching less-nimble retailers flat-footed.”
• Wal-Mart reported that more than two million customers walked in the front doors of its US stores during just the first two hours they were open on Friday morning; Wal-Mart had decided to open at 5 am, an hour earlier than last year. The company said that its most popular item was a Hewlett-Packard Co. desktop computer for $398.
• Even online retailers hoped to jump-start their holiday sales. The Wall Street Journal reported that “although the Monday after Thanksgiving normally sees a big jump in online sales as workers return to their offices, online retailers began posting special discounts on Thanksgiving to jumpstart sales. E-commerce sales for Thanksgiving on Visa-branded debit and credit cards were $205 million -- an increase of 41% over Thanksgiving last year, according to Visa USA. The number of Visa cards issued this year increased by 7% from last year.”
• Amazon.com released a list of all its top selling gift items, broken out by category, for the month of November. In the gourmet food segment, the top three were: a Deluxe Holiday Tower from Harry and David ($49.95), a Ghiradelli Chocolate Holiday Tower ($28), and Our Famous Kona Coffee Holiday Sampler ($35.95).
• Numerous reports from around the country noted that Wal-Mart shoppers got a little testy over the weekend as they looked to take advantage of advertised discounts and limited supplies of certain products, with various fights and tramplings reported in places such as Florida and Michigan.
- KC's View:
-
In going through all the various stories about the weekend, we were reminded of what someone from Wal-Mart once told us – that “Black Friday” was in fact the company’s least favorite day of the year. This person told us that it was the one day that Wal-Mart went off message, that it preached “always low prices” all year long, only to concede on this one day that prices could actually be lower. (We’ve told this story before in this space…)
What are we to take from the shopping patterns of the past few days? That some retailers are living lives of not-so-quiet desperation, resorting to any and all methods of generating traffic and create the illusion that they are creating real and long-term growth? That consumers are doing exactly what retailers want them to do – becoming like trained dogs, responding only to some Pavlov’s bell announcing sales and discounts and promotions, thereby commoditizing and devaluing the act of acquisition?
There is a sense that this is all spinning out of control.
We must admit to a certain skepticism. For example, NRF projects that holiday sales will rise 6.0 percent this year to $439.5 billion….but it made its most recent predictions virtually hours before General Motors announced new layoffs and cutbacks, an announcement that set off reverberations in numerous communities around the country. We have a feeling that this is just one of several economic shoes that could drop in coming months, that could reduce expected holiday sales growth. Retailers need to be prepared for that possibility.
Of course, being prepared may mean planning more promotions, more sales, more discounts. Drive up the numbers today, tomorrow, this weekend, next week. Forget about long-term relationships with shoppers, with growth that means something and that can serve as a foundation for the future.
The WSJ reiterated this concern, writing that “some analysts worry that stores are luring customers with discounts so large they will eat into profit margins for the most important quarter of the year.”
Sales may seem strong, but we may be creating a cold and lifeless business built only on the lowest common denominator.
We don’t mean to be all “bah, humbug” about this. But we’re wondering what exactly is being built here.
By the way, we pretty much managed to avoid most stores over the weekend. We didn’t go anywhere on Friday. We did venture to the local mall on Saturday afternoon, dragged there by Mrs. Content Guy while we waited for our daughter to get out of the movies, and then made a quick trip late Sunday morning to an upscale mall down in White Plains. We must admit that in both cases we found the parking to be surprisingly easy and the crowds to be thin – but that hardly a scientific study. It did give us pause, though…
We submit for your consideration the words of Ralph Waldo Emerson: “It is a cold, lifeless business when you go to the shops to buy something, which does not represent your life and talent, but a goldsmith's.”
We had a surprising conversation with our 16-year-old son the other day. We admitted that we were a little lost about Christmas presents this year because, as far as we could tell, each of our kids already has pretty much anything he or she could want.
“You’re right,” he agreed.
Go figure. Our own little Christmas miracle.
