Retailers are destroying Black Friday

Posted on Posted in Beloved Brands in the Market

Black-Friday-LineFor the past 20 years, it has been a tradition for american families to plan out their friday after US Thanksgiving by hitting the malls as the kickoff to Christmas season. For us too lazy to get up at 5am, it has been fun to watch on TV, seeing doors flung open with screaming people trampling each other trying to get to those door crasher specials. Whether you like the idea of “Black Friday” or not, retailers are doing what they do best:  taking a good thing and messing it up.  

Last year, we saw “Black Friday” ads on the Monday of Thanksgiving. This year, we saw them the week before. The problem when you mess with Black Friday is that you lose the buzz and excitement. You also lose the irrational consumer behavior brought about by the energy of the moment. So Black Friday used to mean getting up at 5am, running through the store to grab that Samsung TV for $179 by 6:15am and then adding a TV stand and gold-plated cables at full price on the way out of the store. Just like any emotion, causing consumers to feel more and think less puts the power into the hands of the brand. Retailers were winning this transaction. That’s gone if you do your sale over 10 days. You are just giving consumers time to think, search other websites and come to a rational decision. Now with time on their side, consumers can shop around for a week, review the specs on the TV and figure out that it has been down-graded with a lack of features, determine the gold-plated cables are a waste of money and just go to IKEA for the TV stand. Maybe they can even talk themselves out of the TV!!!  Why? Because now they can use their brain. After all, that buzz is gone.

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Another crazy trend is the idea that retailers open on Thanksgiving evening. Retailers are always trying to get a leg up, so they are now all trying to open when no one else is open. And yet with a low barrier to copy, they all just follow each other and negate any advantage. Last year the trend started where major retailers including Wal-Mart, Target, Best Buy and Sears opened on Thanksgiving Day–the night before Black Friday. This won’t mean a jump in revenues it just means revenues will be brought forward one day. Yes, retailers have this belief that it’s a constant dog-fight for sales, and if one my competitor gets a leg-up, that means a loss to me. Retailers are facing such pressure during these economic times so I’m somewhat sympathetic. Margins are shrinking and many retailers basically make or break their year during Thanksgiving and New Years. So I can understand the temptation. Before we get into the ethical part of opening, let’s look logically at the 8 ways a brand can make more profit: 1) increasing prices 2) getting consumers to trade up 3) lowering your cost of goods 4) lowering your marketing costs 5) stealing other users 6) getting users to use more 7) entering new categories and 8) getting new users. I realize it’s all about stealing other users. But if both competitors blink and open at 8pm on Thanksgiving, no one really wins over the consumer. The only thing I see here is a slight increase in the costs of increased wages and store opening costs. Net net, no one really wins.Slide1

So at the year end, no retailer will really be saying “we had a great year because we opened on Thanksgiving Day”. But come on guys, while your press releases are saying that you’re really just “catering to consumer demand”, we business people know that’s BS. I’d rather see all Americans sitting around the dinner table and watching football (go Patriots) with family and friends. If families are your main target market, you should be making a big deal out of the fact that you are closed so that all employees can spend time with their families. That’s a great way to establish love for your brand. My Hope is the Retailers Announcer Early that they will be closed on Thanksgiving 2015!!!

To all our American Friends, I want to wish you and your families a Happy Thanksgiving

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