Hype-y Holidays: The Mythology of Black Friday and Cyber Monday

The media hype around “Black Friday” and “Cyber Monday” is already at a fevered pitch–and the din will only grow louder over the next few days. But can we get real for a moment?

To be sure, these are very large volume days. Black Friday sales will likely push $20 billion, and Cyber-Monday revenues are virtually (ha!) certain to be record-setting. But consider a few facts for a moment.

First, studies have shown that retailers’ performance on these two days has little or no correlation to their total holiday performance.

Second, the relative contribution of these two days to total holiday spending is small (for e-commerce players only about 4% of total holiday season sales are done on Cyber Monday). And given intense promotional activity, gross margins are skimpy at best, meaning the relative contribution to profits is even smaller.

Third, with quite a few brick and mortar retailers opening on Thanksgiving–and many online sites advancing “door buster” promotions to today and tomorrow–sales will get spread out a bit more than last year’s spending pattern.

Lastly, a lot can and will happen between Cyber Monday and Christmas.  A look at last year’s data from comScore strongly suggests that there are many large shopping days ahead.

 Top 10 Online Spending Days of 2010 Holiday Season
Date Spending $MM)
Monday, Nov. 29 (Cyber Monday) $1,028
Monday, Dec. 13 (Green Monday) $954
Monday, Dec. 6 $943
Friday, Dec. 17 (Free Shipping Day) $942
Thursday, Dec. 16 $930
Tuesday, Dec. 14 $913
Tuesday, Nov. 30 $911
Wednesday, Dec. 8 $901
Thursday, Dec. 9 $898
Tuesday, Dec. 7 $880

Stated simply and Yoda-like, two days do not a successful holiday season make.

4 thoughts on “Hype-y Holidays: The Mythology of Black Friday and Cyber Monday

  1. Disagree. These two days and the weekend they sandwich mark the first huge days in the holiday season ahead. And in many cases, the high volume of new customers allows you to remarket to those folks later in the season. Yes I get nauseous thinking about the products we ‘give away’ when we promote on those days, but they make up maybe 30% of total sales those days – the rest happen at higher margins and make the entire thing worthwhile. I am looking to this weekend as an indicator for the balance of the season, and to the extent I need to buy more to stock the shelves (if I can), I will do so. Cheers, Jim

    1. I appreciate the comment.

      I do think that for pure-plays–and certain brands–Black Friday and/or Cyber Monday can be more important than the typical multi-channel retailer. And clearly not participating in a significant way is quite risky. If you end up generating 20% or more of your profit for the season from the days between Thankgiving and Cyber Monday, I’d be surprised, but good for you. I definitely think you are the exception.

      Maybe this year will be different than the last few, but the facts are the facts as far as the total contribution of sales of these days to total holiday sales and the correlation of performance on these days to overall holiday sales performance. If you have different industry data I’d love to see it.

      In fact today, the notoriously hype-y NRF, which gloated over how strong sales were this weekend, said they weren’t changing their projection of total sales increase this season of a pretty tepid 2.8%.

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