A plea for Black Friday sanity
Do retailers realize they’re in a mindless race every holiday season?
Now that the emotional hype and buying frenzy are over, maybe we can have an objective discussion about this phenomenon we call Black Friday. I’m not a marketing genius, so I may need a little help with this one.
As I understand it, many retail establishments operate at a loss all year long until the end of November. The day after Thanksgiving, the Christmas shopping season begins and magic happens. We’re continually told how many shopping days there are until the big day.
Many people are off the day after Thanksgiving and can’t think of a better way to spend it than Christmas shopping, and all of a sudden many retail establishments become profitable for the year and are operating in the black. Hence, Black Friday.
Somewhere along the line somebody thought of providing incentives to get more people to buy more on Black
Friday. I guess if you’re trying to stimulate demand, that makes sense. On the other hand, they already have a built-in deadline, which is Christmas Eve. How much of your profit do you want to give them to make them buy sooner than later?
Admittedly, when your competition is doing this, you have to follow suit, so you don’t lose your customers to someone else. And so, the competition begins.
Some stores open at 3 a.m. or earlier on Black Friday. Some even open on Thanksgiving, a once-sacred holiday. It takes some pretty outrageous deals to get customers to come in then. And of course, these deals mean you’ll make less on each sale, which hopefully will be made up by more sales.
Unfortunately, your operating costs will also increase substantially. I’m not sure what incentives it takes to get employees to work the ridiculous hours. I would expect it’s more than just “you get to keep your job.” Electric bills and other expenses will be much higher as well.
So we’re going to spend more to sell our goods at a lower price, and this will make us rich?
For instance, there’s a vitamin store in the mall that’s part of a chain, and it had all kinds of deals for Black Friday. This to me is truly amazing. Customers will come in and buy perhaps several months supply of Vitamin C and whatever else they take. They’re not going to start taking more Vitamin C because it’s cheaper; they’ll still take the same amount every day.
So yes, the company is spending more to sell their goods at a lower price. What do you think this will do to their sales in January, February and March? I guess that’s when they have the “real” sales.
Of course, the internet doesn’t want to be left out, and so we have Cyber Monday. Even though these transactions happen at the speed of light, the basic laws of retail still apply.
This has gone on for so long, and getting steadily worse, that customers have come to expect it. It’s not the sort of thing you can just stop doing, even if all your competitors did it in concert. So the tricks abound among some retailers.
I can recall a department store manager telling me that Black Friday merchandise was not necessarily the same as other merchandise. For instance, the TVs they had for deeply discounted sale on Black Friday were not the same as the other TVs. They had different part numbers. They were missing some of the features the regular TVs had.
Admittedly, this is not always the case, but this kind of chicanery doesn’t build customer loyalty in any way, shape or form.
So how do we fix it? I’m reminded of cattle drives in the Old West. When the herd stampeded in the wrong direction, the cowboys had to get in front and turn the leaders. Otherwise, they could lose the whole herd.
Well, watching the news reports makes Black Friday look an awful lot like a stampede. If retailers really want to stay in business, they have to stop this mindless race and form new expectations with their customers.
The end-of-the-year bump might not be quite as big, but all things considered, the total profit picture might be a lot better.
Ronald J. Bourque, a consultant and speaker from Windham, has had engagements throughout the United States, Europe and Asia. He can be reached at 603-898-1871 or RonBourque3@gmail.com.