Oct 02, 2020
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About this Deal
Black Friday has been losing its clout for years. The coronavirus pandemic could be what finishes it.
The one-day event of doorbuster deals, packed mall parking lots and crowded shops has long been considered the unofficial kickoff to the holiday shopping season. Its name comes from the sizable effect the buying blitz can have on a retailer’s bottom line, pushing them “into the black,” or toward profitability, after three quarters of money-losing sales. A typical Black Friday in previous years could equate to about an extra week of sales for some retailers, according to analytical intelligence firm 1010data.
In recent years, however, Black Friday’s importance has faded. More retailers have offered similar sales online, making it possible for shoppers to browse and buy from their couch or on their smartphone rather than having to camp out in a Best Buy parking lot, or cut through thick crowds at the mall. In the midst of a global health crisis, shoppers have even more reason to avoid long lines to snag a deep discount on a smartwatch, boots or a Nintendo Switch.
About 64% of consumers said they are less inclined to shop on Black Friday than they were a few years ago, according to a survey of more than 1,500 consumers by Accenture. Nearly 60% said they had also lost interest in shopping on Cyber Monday. Those numbers have risen from 55% and 47%, respectively, from last year.
Retailers are downplaying the one-day event this year, too. Many say they will start holiday deals as early as October and extend the offers throughout the holiday season.
Macy’s CEO Jeff Gennette told analysts last month that holiday demand typically occurs “between the goalposts of Thanksgiving and Christmas Day.” But he said, “I think this year is going to be different” with demand beginning even earlier.
Black Friday has become a concept in the industry that is used to promise customers deep discounts — minus the 24-hour time limit.
“Black Friday was always about being first,” said Michael Brown, a partner in the consumer practice of global strategy and management consultant Kearney. “But Black Friday is not going to be the launch of the holiday season this year. ... It will happen softly over the next month or so.”
Home Depot, which sells holiday decor like artificial Christmas trees and lawn inflatables, is stretching out Black Friday specials for nearly two months so customers don’t feel like they need to rush to the store, as one example of the trend.
Amazon has also pushed up retailers’ timetables. Its annual Prime Day event, typically held in July, will now take place on Oct. 13 and 14 after the company pushed the date because of the pandemic. That could pull holiday sales forward and steal market share from competitors.
Target announced its own sales event — Target Deal Days — during the same two-day period. It said it will have more than double the digital deals it offered last year on electronics, beauty items, toys and more.
The big-box retailer also said its Black Friday deals will run through the entire month of November — and be available on its website, so customers can get the same discounts from their couch. It’s extending its price match guarantee for any item considered a “Black Friday deal,” whether it’s bought at the start of November or on Christmas Eve.
Walmart’s “Black Friday” deals won’t be limited to a single day, either. It will feature Black Friday-like savings during its “Big Save Event,” which starts the evening of Oct. 11 and runs through Oct. 15. The deals will include $50 off of a Pioneer Woman 6-quart Instant Pot and a 55-inch JVC 4K HDR Roku Smart TV for $248.
Closed for Thanksgiving
Best Buy Chief Merchandising Officer Jason Bonfig said over the past decade, Black Friday’s meaning has evolved. The one-day shopping holiday in recent years has morphed into nearly an entire weekend of sales.
As retailers added hours on Thanksgiving, they offered longer-lasting promotions and catered to customers’ online shopping, he said. Still, it is “definitely still relevant for Best Buy and Best Buy customers.”
“Black Friday really signals a time for customers to be able to get great deals,” Bonfig said.
The creep of spending momentum from Black Friday to Turkey Day began in full force in 2010, when the department store chain Sears opened on Thanksgiving. Walmart made a similar move in 2011, followed by Target in 2012. Black Friday sales then started to spread throughout the weekend and into Cyber Monday, stealing thunder from the retail tradition.
That will look even more different this year, as one of the signature pieces of Black Friday disappears: Several key retailers have announced they won’t jumpstart sales by opening about half a day earlier on Thanksgiving. Companies including Walmart, Dick’s Sporting Goods, Best Buy and the biggest U.S. mall owner Simon Property Group have announced they will stay shut so workers can be home for the holiday.
Crowd control and Covid cases
Crowd control, however, will still be something retailers will need to consider during the holidays.
Some states still restrict the number of people that can be in a store at any given time. To deal with these constraints, as one example, Lululemon said it plans to open pop-up locations this holiday season. Some of those will be in malls where it already has a permanent store, to try to spread out its customers. Other retailers like Bed Bath & Beyond are looking to extend store hours to hopefully spread out shopping.
Retailers are also coping with uncertainty during a global health crisis and a recession.
Some public health officials have warned that Covid-19 cases could rise sharply as more Americans gather indoors during colder-weather months. Shoppers may spend less on gifts, as they skip large family gatherings or watch their budgets because of unemployment or pay cuts. And the presidential election, which drives a busier news cycle, could become a distraction and limit the time people spend shopping.
By pushing up the start date of the shopping season, retailers hope to whet consumers’ appetite for spending, manage their supply chain as more sales shift online and to curbside pickup, and spread out in-store shopping to reduce the risk of spreading Covid-19.
Coresight Research founder and CEO Deborah Weinswig said retailers face one key challenge in the coming months: Trying to predict what consumers will buy and how they will shop, so they can avoid a supply chain crunch.
“Retailers don’t have any idea what’s coming their way with regards to the surge in e-commerce,” she said.
That’s one reason why Coresight wants to drum up interest for a newly manufactured shopping holiday, even before Prime Day, called 10.10 — playing on the Chinese retail giant Alibaba’s 11.11 Single’s Day event. Coresight has not yet released the list of participating retailers for the Oct. 10 event, which encourages people to shop and then make charitable donations.
Whether people are buying gifts on 10.10, during Prime Day, or later in the season, analysts expect a huge portion of sales will move online this year, as many of us are still stuck at home. Globally, online sales are expected to grow 30% year-over-year to $940 billion this holiday season, compared with 8% growth in 2019, according to Salesforce’s 2020 forecast.
Retail Metrics founder Ken Perkins said that means Black Friday — or at least what remains of it — is going digital, too.
“We are heading toward a heavily contact-less transaction holiday season,” he said. “Malls are going to be emptier than they have been. So much of this season is going to be transacted online.”