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Black Friday Promos Herald Holiday Season

Hopes for a less promotional holiday selling season were seemingly dashed Black Friday weekend as consumers across the country cued up in the pre-dawn darkness for $20 DVD players, $130 camcorders, $500 notebooks, $1,000 rear-projection HDTVs and other door-busting CE specials.

Retail analysts were anticipating more rational pricing this period due to the failure of last year’s steep discounting to stimulate holiday sales. Other factors favoring a more fully priced position, they argued, are the recovering economy, leaner fourth quarter inventories, easy year-ago comparisons and an extra shopping day on the calendar.

Nevertheless, Black Friday was rife with rebate-driven early-bird CE specials that could set the tone for the balance of the season. Among the highlights (or, as some would argue, the lowlights):

  • A 2.6GHz eMachine desktop with flat-screen monitor for $300 (Best Buy)
  • A portable DVD player with 4-inch LCD screen for $130 (Circuit City)
  • An Apex 24-inch flat-tube analog TV for $99 (H.H. Gregg)
  • A KLH progressive scan DVD player for $50 (Sears)
  • A 2.0-megapixel digital zoom camera for $50 (CompUSA)

Well-trained bargain hunters responded in kind.

According to ShopperTrak, retail sales were up 4.8 percent year-over-year to $7.2 billion on Black Friday, the unofficial start of the holiday shopping season. Of that, some $1.52 billion was claimed by Wal-Mart alone, which cited CE among its top-selling categories.

Indeed, consumers who camped outside of some Wal-Mart stores numbered in the thousands, according to news reports, and at least one early bird shopper — still clutching her $29.87 DVD player — was trampled by the throngs at an Orange City, Fla. location, the Orlando Sentinel reported.

(Analysts, however, were unimpressed with Wal-Mart’s Black Friday performance, noting that its 6.3 percent gain trailed the prior year’s 14.4 percent hike and that comp sales were likely minimal given this year’s 8 percent increase in selling space. J.P. Morgan’s Shari Eberts even speculated that Wal-Mart missed its sales plan for the day, particularly in CE.)

The ShopperTrak numbers were also borne out by a National Retail Federation (NRF) survey indicating that 71.8 percent of consumers were out shopping Thanksgiving weekend, and by a report showing that a sizeable number also stayed in and ordered online. E-commerce sales totaled $188.84 million on Black Friday, the shopping search site said, and sales from Nov. 1 through Nov. 28 reached $5.5 billion, a 22 percent gain over the prior-year period.

For the most part, CE dealers were pleased with the weekend’s results. “It was very positive for our group,” reported NATM Buying Corp. president and executive director Bill Trawick. “Projection TV, LCD and DLP were very strong, and our guys also got a boost from major appliances.”

He added that while some member dealers tend to “play at aggressive price points,” and stayed true to their strategy over the weekend, “others chose not to play at that level.”

Stuart Rose, chairman/CEO of Rex Stores, said same store sales were up 4 percent over Black Friday weekend year-over-year, thanks in part to promotions. “We’re not planning to go as low during December, but there’s a huge pie out there and you have to be very low-priced to get a piece of it.”

Also enjoying a bountiful Thanksgiving weekend — and pre-holiday week — was regional powerhouse P.C. Richard & Son. “Sales were very strong, particularly in digital cameras and flat-panel TV,” noted VP/merchandising Gregg Richard, thanks in part to a 10-percent off and 18-month no-interest promotion held prior to the holiday.

But despite off-price offers that included a $29 DVD player and a 50-inch Apex projection TV for $588, Richard didn’t consider Black Friday weekend exceptionally promotional.

“You always expect the door busters, but we don’t play the 6 a.m. early bird game,” he said. “We don’t feel that attracts a loyal customer. That kind of shopper just follows the sales. We’re all about customer loyalty, earned through great selection and service, rather than building a business on price. Sure we had a $29 DVD, but we didn’t advertise it. That was for our customers who wanted it, although we’d rather show them more fully featured products.”

Looking ahead, expect more of the same as retailers pull out all of the marketing stops in order to make the 4 percent to 7 percent sales gains pegged by analysts for December. “We went out and got some great buys for the season to put on the cover of our circulars starting Thanksgiving Day,” noted Jeff Stone, president/CEO of Tweeter Home Entertainment Group. The high-end A/V chain has a “heavy holiday print schedule that’s driving a price and image message,” he said, while TV and radio spots under the tagline “Just Sit Back and Enjoy” will focus on the Tweeter brand.

Similarly, Ultimate Electronics has added $2 million to its marketing plan for the Thanksgiving through New Year’s period that’s earmarked for additional run-of-press print ads and a December catalog. “We’re going to sharpen our price and promotional stance” to stimulate traffic said president/COO Dave Workman.

A spokesman for Sears suggested that the mass merchant would be promotional when and where it needs to be, and was cautiously optimistic about hitting the NRF’s holiday sales projections of a 5.7 percent gain over last year.

Indeed, “cautiously optimistic” is the position that most retailers are taking, said ShopperTrak lead consultant Michael Niemira, due to the vagueries of weather, discounting, inventory and general economic conditions. “While the holiday retail season appears to be off to a very good start, the first weekend is traditionally not an accurate predictor of the rest of the season,” he said.