Stand by. Here comes the onslaught of stories about Black Friday and all the related hype about the retail industry’s biggest and most important sales day! Yawn.
In reality, this Friday isn’t the industry’s biggest sales day–the Saturday before Christmas usually is–and the importance of Black Friday as a bell weather for the holiday season is waning. Here’s why.
First, consumers’ capacity to spend remains muted. Retailers get this, and realize that to drive the top line they need to grab market share. This is why so many retailers jumped the gun and launched “Black Friday” promotions well before Thanksgiving. This will pull volume forward, away from Black Friday.
Second, consumers remain “surgical” in their shopping. That is, they are primarily focused on “needs” vs. “wants” and constantly on the hunt for a great deal. Many shoppers understand that retailers get more desperate as the season progresses and they are willing to wait out the retailer for the best price. This “game of chicken” will move sales off of Black Friday and into the latter part of December.
Third, gift cards continue to grow in popularity. You sell the gift card before the holidays, but the bulk of the shopping comes in January.
Lastly, and perhaps most importantly, this will be a very digital holiday. E-commerce will grow at least 10% year over year, while many brick and mortar stores will be lucky to show even a nominal increase. Mobile commerce will go from being a rounding error, to being a small but powerful part of the whole story. Many retailers, including a little outfit out of Arkansas called Wal-Mart, are already offering free shipping. And no doubt, free or low-cost expedited shipping offers will be prevalent until the final days before Christmas. Simply stated, as digital grows, the importance of Black Friday diminishes.
So this Friday the pundits will pontificate and prognosticate. And we will enjoy endless stand-ups from outside various Best Buys and inside various malls. It makes for good television, but not good analysis.