GO
Loading...

The End of the Black Friday Litmus Test

Friday, 19 Nov 2010 | 11:59 AM ET

Black Friday weekend used to be the bellwether of the holiday shopping season. Merchants held their breath when Thanksgiving weekend sales results trickled in, holding up the period as a major indicator of how their stores would perform for the make-or-break holiday selling season.

But the weekend has lost much of its crystal-ball appeal.

Customers wait in line to pay for their items on Black Friday at KB Toys in King of Prussia, Pennsylvania.
Getty Images
Customers wait in line to pay for their items on Black Friday at KB Toys in King of Prussia, Pennsylvania.

A number of factors have disrupted traditional sales patterns and shopping trends: Retailers launch holiday campaigns earlier every year—this season they broke before Halloween.

Online sales and gift cards also continue to gain momentum and recession-fatigued shoppers are increasingly holding out for big end-of-season bargains. And this year, the rise of mobile retailing is poised to further shake up longtime holiday shopping trends.

But that doesn’t mean Black Friday weekend isn’t still a major traffic and sales event. It pulled in a hefty 6.4 percent of holiday sales in 2009, according to ShopperTrak, which measures and analyzes retail sales traffic.

“It’s just that it doesn’t mean the rest of the season is going to be that way,” said spokesman Aaron Martin.

For one, early promotions “are some of what steals Black Friday’s thunder,” said Alison Paul, retail sector leader for Deloitte, the consulting firm.

Sears kicked off its Black Friday campaign on Oct. 29, with bargains such as $19.99 for women’s low boots, down from $39.99, and 20 percent off Craftsman lawn and garden tools.

Wal-Mart , Target and Amazon also launched Black Friday bonanzas before trick-or-treaters began ringing doorbells.

And at the opposite end of the retail holiday sprint, the popularity of gift cards has extended the selling season, pushing purchases into January, as gift cards don’t count as sales until they’re redeemed.

According to Deloitte’s 25th Annual Holiday Survey, which polled over 12,000 consumers on their spending intentions for the 2010 holiday season, gift cards are the number one gift item consumers plan to purchase. That may be because more Americans are saying gift cards are their preferred gift.

But increasingly, consumers are beginning to feel the sporting-event-like frenzy has lost some of its luster.

These days, “Who wants to be with the rest of the world in a store at 6 a.m.?” Paul said. “More and more consumers are saying, ‘I can do this from the comfort of my own home in my pajamas, online.’”

What’s more, Cyber Monday, the Monday after Black Friday weekend when consumers surf the Web for holiday finds, has become a shopping event in its own right, Paul said.

Indeed, consumers can troll the Web for deals, including ones specifically targeted to surfing shoppers.

This result is spotty shopping, as savvy consumers “cherry pick” Black Friday deals that weekend and throughout the season, said Frank Badillo, vice president and senior retail economist for Kantar Retail.

Mobile retailing is expected to lift that cherry picking to new heights and is the wild card in terms of its influence on holiday purchases.

Although only one out of every five shoppers, or about 17 percent, expect to use their smartphone to do shopping, some 56 percent of them will use the phone to compare prices, according to the Deloitte survey. That's up from 45 percent last year.

While most shoppers are unaccustomed to researching product at the point of sale, Web-enabled devices are poised to change that as smartphones gain mainstream appeal, and “consumers can see what all retail outlets are charging for a single item right from their phone,” Paul said.

Even surveys that project larger crowds for Black Fridaythis year, say that doesn't mean those shoppers will be free-spending. In fact, consumer research firm America's Research Group predicts record crowds, but their survey also project more shoppers would be spending less this year.

Instead, the season will go done to the wire. Procrastinating shopping is as much a holiday tradition as Santa Claus and fruitcakes, but the tepid economy promises to push holiday sales later into the season as shoppers hold out for last-minute deals, Martin said.

Neither Black Friday nor Cyber Monday are the busiest shopping days. That designation usually is reserved for a date closer to Christmas.

“Typically, the end of a season makes or breaks the season,” he said.

  Price   Change %Change
AMZN
---
SHLD
---
TGT
---
WMT
---

Consumer Nation