“We’ll Lose A Buck On Every One We Sell But Make It Up In Volume”

“Some 152 million shoppers say they will hit stores on Nov. 25, the day after U.S. Thanksgiving, up 10.1 percent from 138 million people last year, according to a survey by the National Retail Federation, an industry group.” Reuters November 17, 2011

“It’s an $800 TV for $200, so we figured people would be out here really early, and that’s a deal we didn’t want to pass up,” Brandon Vanderstelt, 20 year old, who, along with his wife, is camping out for 10 days ahead of Black Friday in front of a North Texas Best Buy Source:  Brad Tuttle, Time Magazine Moneyland reporter.

Let’s ignore the fact that 152 million of our population shopping the day after Thanksgiving means that just short of one of every two men, women, and children in the U.S. population (estimated by U.S. Census to be 311,800,000 in mid 2011) will allegedly be shopping. Seems a tad optimistic but who knows?

If there are that many, why? What motivates them to forego putting up Christmas lights, doing yard work, spending time with the kids, or any number of other things that one could — and in the past did — do on the day after Thanksgiving?

Vanderstelt makes clear why he’ll be there: low price, a reason that is no doubt shared by many of those who shop that day. In his case, a supposed 75 percent discount!

I know that Black Friday has become to bargain hunting what gluttony is to the day before, but to what benefit?  A lot of inventory will move, saving a lot of money for consumers who will no doubt appreciate it, but is there anything more?

I don’t think so.  While I understand the theory of loss leaders, very little, if any, of what will happen will result in increased long(er)-term goodwill, brand equity/loyalty, or repeat sales — all old-school aspirations for manufacturers and retailers from a past now apparently gone.

William Matthies is the CEO of Coyote Insight (www.coyoteinsight.com) and can be reached at wmatthies@coyoteinsight.com or at (714) 726-2901. Visit Business Wisdom at http://businesswisdom101.blogspot.com/