Black Friday Hype
By Steve Smith -- TWICE, 12/5/2005
In covering retail-oriented businesses since the early 1980s, I have been fascinated over the years by the increasingly intense coverage of Black Friday and the holiday selling season by the media.
With more of our national economy being driven by retail sales in the past decade, and more investment and retirement accounts being invested in the stock market, the growing interest by the consumer media is understandable. Consumers feel they need to follow what's going on at retail closely. Not only to get the best deal around the holidays, but to make sure that if they are investing in retail stocks, that they know what's going on.
But this year the media hype seems to have gone over the top. The New York Times and others began covering Web sites like www.BF2005.com that gave consumers a heads-up on what major chains would be discounting heavily on Black Friday. Other media outlets began to cover what their sources thought would be sales trends on Thanksgiving weekend, days before the holiday.
Then all the so-called experts weighed in on Saturday and Sunday, spinning their way forward as if it were an election campaign. Some said that Black Friday sales should not be used as a barometer for how the entire holiday selling season should go, that it has become overrated. Others have said that due to higher energy costs and consumer confidence, holiday shoppers will wait until the last weekend before Christmas to take advantage of deep discounts at retail.
And still other pundits said, “Forget about Black Friday. Cyber Monday is the key!” For the uninitiated, Cyber Monday is the day after the Thanksgiving weekend where many shop at work because of broadband connections, among other reasons. (And to think, a decade ago few consumers knew what “Black Friday” meant.) In Tuesday's New York Daily News business section, the paper quoted one research firm saying Web sales set a record in November. Right below it was a story based on info from the same firm with the headline, “Web is a small fraction of retailers' sales.”
All of this reminded me of a quote attributed to author Edgar R. Fiedler. It goes like this: “Ask five economists and you'll get five different answers (six if one went to Harvard).”
Of all the contradictory reports on Thanksgiving sales, there was one common thread: Consumers are buying CE products in droves. When it comes to CE, consumers are putting rising energy costs, war, natural disasters and the like aside. That trend should make CEA's prediction of a 9 percent overall increase in CE retail sales for the holidays still look good.
Yet if that's the case, then why do major retailers (and their “enablers,” manufacturers) continue to make drastic price cuts in a variety of categories for Black Friday promotions? Doesn't that contradict the CE retail strategy of the other 11 months of the year: to sell profitably?
Those are all good questions to be dealt with at another time. In the meantime, if you are selling consumer electronics at retail, give thanks it remains the product category most consumers cannot do without during the holidays.
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