What's In Store, And Online, For Black Friday - Twice

What's In Store, And Online, For Black Friday

Author:
Publish date:

NEW YORK -

Black Friday arrived earlier and with more furor than ever before this year.

While the day after Thanksgiving has long been a competition for retailers and consumers alike, the prolonged economic downturn, a dismal third-quarter for CE, and massive shifts in where and how customers shop have raised the stakes ever higher.

To drive traffic and reclaim their hegemony amid significant market share gains by online retailers, leading brick-and-mortar chains upped the ante with even earlier store openings, free online shipping and more stunning Black Friday discounts.

In what retailers described as a response to customer demand, many including Best Buy, hhgregg and Target have controversially moved up their store openings to midnight on Black Friday, while Walmart will open at 10 p.m. and Toys "R" Us will open at 9 p.m. on Thanksgiving (see "

Viewpoint

," ) Kmart, which has opened on Thanksgiving Day for the past 20 years, will do so again this Thursday, at 6 a.m., while sister chain Sears will reverse its policy from last year and remain closed on the holiday.

"We are a very family-focused company, and we understand that our extended store hours place a burden on employees," said hhgregg president/CEO Dennis May. "However, we are staffing our stores strategically on Black Friday and throughout the holiday season to ensure that all of our employees have adequate time with their families."

Best Buy CEO Brian Dunn similarly expressed regrets over his company's decision to move its traditional 4 a.m. opening up to midnight in response to similar moves by strip-mall neighbors. "We made a decision that we need to be where our customers are," he said earlier this month at a conference. "I know that the decision has been a bit controversial with some of our folks. But the truth of the matter is, the customers will be out there, lined up, for that midnight opening."

Besides earlier openings, both retailers and e-tailers began their Black Friday hoopla sooner this year. While Sears was the first out of the starting gate in 2010 with a Black Friday promotion before Halloween, the honors go this year to leading online-only CE dealers Amazon.com and Newegg.com. The former launched a "Countdown to Black Friday" deals page on Nov. 1 offering daily promotions and free shipping on orders more than $25 through Nov. 25. The same day, Newegg kicked off a "Stop Mall Madness" holiday campaign featuring an extended 60-day return policy and online price guarantee for select products.

A day later Walmart followed suit by pre-announcing some of its Black Friday doorbusters, offering a price-match guarantee through Christmas, and holding a pre-holiday sale that weekend. It also played the multichannel card by providing free shipping on 95 percent of its online assortment and a 10-cent per gallon discount on gasoline at the more than 1,000 Walmart locations with filling stations.

Best Buy quickly countered with its own "Shop Early" page on BestBuy.com, and announced three consecutive weekends of pre-holiday sales events. The No. 1 CE chain also sweetened the pot with free shipping on its entire online assortment through Dec. 27, extended return and price-match periods, free limited Geek Squad support the week after Christmas to help get gifts up and running, and free showings of "Harry Potter and the Deathly Hollows: Part II" outside select stores to ease the wait on Thanksgiving night.

Whether pre-announced or leaked online, the actual Black Friday doorbusters were jaw dropping even by CE standards, with some of the deepest discounts centered on TVs, Blu-ray Disc players, laptops and tier-three tablets. Highlights of the lowlights include:

• a 42-inch Sharp 1080p LCD TV for $200, at Best Buy;

• an Internet-ready Toshiba Blu-ray Disc player for $40, at hhgregg;

• a Velocity Micro Cruz 7-inch tablet for $100, at RadioShack;

• a 15.6-inch dual-core HP laptop with 3GB of memory and a 320GB hard drive for $248, at Walmart; and

• a 10.1-inch Acer netbook for $157 at Target.

"This is going to be a very aggressively priced holiday," acknowledged Bernard Luthi, marketing, web management and customer service senior VP at Newegg.com. "The customer has the power here."

Whether the lures will unleash months' of pent-up consumer demand remains to be seen, although retailers themselves are less than hopeful. According to a recent BDO USA survey of 100 chief marketing officers (CMOs) at leading U.S. retailers, just 27 percent expect to see an increase in Black Friday sales, down from 38 percent in 2010. Similarly, only 24 percent project an increase in Cyber Monday sales, with the vast majority (74 percent) expecting flat results.

Overall, the CMOs project a 1.6 percent increase in Black Friday sales (down from 3.8 percent in 2010) and a 2.5-percent increase in sales on Cyber Monday.

"Black Friday is not disappearing, but deal-fatigued shoppers have been there and done that," said Ted Vaughan, partner in the retail and consumer products practice at BDO USA.

A recent consumer survey by Accenture bore that out. According to the poll, this year's turnout at stores could be the lowest in three years, with only 44 percent of consumers indicating that they are likely to shop on Black Friday, compared with 47 percent in 2010 and 52 percent in 2009. Instead, a larger proportion of shoppers will be leaving their holiday shopping until after Black Friday compared with last year (52 percent vs. 41 percent in 2010), and one-third (33 percent) will leave the bulk of their purchases until December with the expectation of better end-of-season discounts.

Fortunately for CE retailers, electronics ranked high on gift lists, with 36 percent of respondents looking to buy one or more tech devices, compared with 35 percent in 2010.

"Precision shoppers will dominate," said Janet Hoffman, managing director of Accenture's retail practice. "They will be very targeted about where and what they buy, and will be more inclined to shop around for the best value." 

To that end, 54 percent of respondents who shop with smartphones and 35 percent of tablet owners said they will use their devices to compare prices while in a store, although the research showed no significant change in the number of consumers shopping online (66 percent vs. 69 percent in 2010).

But a new consumer poll conducted this month by the National Retail Federation (NRF) and BIGresearch suggests that retailers' early promotions are having the desired effect, as more than half of Americans (51.4 percent) have started their holiday shopping, up from 48.9 percent last year. "Consumers across the country are already sampling the promotions that retailers are offering," said Pam Goodfellow, consumer insights director for BIGresearch. "Given shoppers' hunger for value and good deals, Black Friday and Cyber Monday will be incredibly important days for retailers this year."

Featured

Related Articles