I was on a road trip last week, crossing off a bucket list item with three friends visiting the Augusta National Golf Club during Masters’ Week one day and playing a couple of rounds of golf (or as we play and call it, “Where’s my ball?”).
News of the electronics/appliance business was the farthest thing from my mind — until I saw a Home Depot TV ad for a Spring Black Friday sale for spring plants, seeds and gardening supplies. “Spring Black Friday”? Really? Maybe Home Depot management confused Easter with the Christmas season?
Of course, when I went online, it just got worse. Home Depot’s “Spring Black Friday” is not just under-cutting margins in the gardening industry. Through April 17 Home Depot is offering up to 30 percent off on major appliances, as well as deals on other items independent electronics/appliance retailers turn to for profits: BBQs, outdoor furniture and power tools, among others.
I quickly checked TWICE.com and saw Alan Wolf’s report that Sears, the longtime leading major appliance retailer in the U.S. which as of the 2014 TWICE Top 50 Major Appliance Retailers Report is now No. 2, is having a Spring It On Black Friday sale April 22-23, with its Shop Your Way loyalty club members getting to browse and maybe buy an appliance on April 17.
And, of course, Lowe’s is offering 30 percent off on selected major appliances through April 19, but that chain has the good taste not to invoke the overused Black Friday label for its sale.
Which chain started the “Black Friday” white-goods sale this year? It doesn’t matter. You can understand Sears’ reasoning: It needs to build volume and shore up eroding market share in the category. As for Home Depot and Lowe’s, they have to keep up with each other, and if the profitability of one key category takes a hit for two weeks in April, so be it.
The bottom line is, well, the bottom line. Leading major appliance brands whose products are featured in these sales are enabling these three retail giants to undercut overall profitability in their own industry. This practice trains consumers to wait for sales in major appliances. They are learning if they can hold off long enough, the model they want will be on sale.
Training consumers to wait for sales undercuts profitability. But what do I know? I don’t have an MBA — just a journalism degree.
Just ask former executives of top CE brands and chains from a decade ago how the Black Friday strategy worked out for them.
Steve Smith is editor at large of TWICE and was its longtime editor in chief.