Why Black Friday is losing prominence during the 2016 holiday shopping season
Traditionally the single-biggest sales day of the year, the shopping holiday has morphed into a month-long event — causing retailers to adapt their strategies.
For retailers, Black Friday has long been seen as the day to shine.
Black Friday has historically been the biggest retail sales day of the year — as the name suggests, it's the one day where many retailers' financials go from the red into the black for the year. But over the last few years, the shopping holiday has lost its luster a little bit — and retailers are having to adapt quickly.
For many shoppers, the excitement of standing in long lines before dawn and fighting off other shoppers hungry for doorbuster deals is wearing off. Retailers are partially to blame for the problem: Each year, they’ve pushed deals earlier and earlier and migrated their promotions online, which analysts say has eroded Black Friday’s dominance as the single best day to get shopping deals.
This year, Black Friday will no longer be the biggest sales day of the year, according to a forecast from in-store analytics firm RetailNext. In fact, Black Friday is expected to be only the third biggest shopping day in overall sales and the second biggest traffic day for stores during the holiday season: Friday, Dec. 23, and Super Saturday, Dec. 17, are projected to beat Black Friday for overall sales, while Super Saturday is expected to see more store traffic.
Instead of promotions culminating on Black Friday, “stores have started opening on Thanksgiving Day, which pilfers against Black Friday because people go to the stores on Thursday,” Shelley Kohan, vice president of retail consulting at RetailNext, told Retail Dive. Meanwhile, the convergence of digital and physical retail has driven retailers to develop more holistic omnichannel strategies spanning the entire month of November.
All this adds up to an evolving holiday season, one where retailers might not be able to count on Black Friday as a saving grace to drive the most sales and traffic. Instead, the 2016 holiday season will challenge retailers to meet the omnichannel shopper's needs from now right up until the end of December.
Black Friday's promotional creep
Consumers are already in “buy now" mode for the holidays, which puts pressure on retailers to be nimble in turning around holiday inventory and sustaining product levels over the next several months. With Black Friday promotions starting earlier and earlier, shoppers have come to expect good deals much sooner.
You need not look far to find an example: Just this week, Overstock.com launched its Black Friday Sneak Peek event, which began offering doorbuster deals on Tuesday for up to 70% off home goods and other products, and will run through Oct. 27. In a press release announcing the event, Overstock.com President Saum Noursalehi said he wants to give shoppers the option "to realize savings sooner and spread out the costs associated with the holidays."
The e-tailer's bargains may be a little ahead of the curve — even overlapping with Halloween promotions — but analysts say it won't be long before other retailers roll out pre-Black Friday deals.
Many shoppers will take advantage of early promotions. Nearly half (49%) of consumers will cross off their holiday shopping lists before the end of their Thanksgiving meal, with 27% projected to be done even before Nov. 1, according to a new survey of 1,000 shoppers conducted by retail and marketing analytics firm Market Track.
The trend toward earlier shopping means retailers need to rethink Black Friday. It's become more than just an individual sales day — and more of a weekend-long or even month-long event, according to Kohan.
“We’ve seen it with back to school, we’ve see it with Thanksgiving, we’ve see it with Fall and Spring merchandise where consumers are in this ‘buy now mode,’ and that kind of takes away from consumers feeling the need to rush out all on Black Friday,” she said. “Of course, they want good deals and good savings, but they are savvy enough today and they are armed with so much information that they know they don't have to go to the store on Black Friday to reap the best sales of the month.”
Excluding Black Friday, the next highest sales and traffic day in 2015 was Saturday, Nov. 21, or the Saturday before Thanksgiving, according to data from RetailNext. While Black Friday may still have some of the best bargains, impatient shoppers no longer feel the need to wait.
Other holidays are also pushing up promotions, Deborah Weinswig, managing director of Fung Global Retail & Technology, told Retail Dive. Alibaba's Singles Day, which occurs on Nov. 11, has become an increasingly popular promotional day for U.S. retailers with an e-commerce presence in China, she said.
Black Friday isn't the end of the holiday deal season
Traditionally, Black Friday has been about brick-and-mortar stores, while Cyber Monday has been reserved for online deals. But as shoppers exhibit increasingly omnichannel behavior, retailers are blending the two channels in their promotions — and shoppers are finding they can find great bargains from their homes on any day between Thanksgiving and the Monday afterward.
“If I’m sitting with my family [on Thanksgiving], I can ask them what they want, so I do think there is a change in the cadence of the season, the actual relationship of the consumer and how they are consuming,” Weinswig said. “[Shoppers] may want multiple devices — phone and laptop to check prices, physical ad in another hand. Prices are changing in real time, so you may get a better deal if you sit at your kitchen table.”
But that’s not to say that the allure of Black Friday is gone — there are still plenty of shoppers who crave the “feel, touch and taste of the merchandise” and the craze of special deals at early hours. If retailers want to capture more sales on Black Friday weekend, there’s a huge opportunity to create memorable in-store experiences that can help differentiate a retailer from simply ordering products online, Weinswig says.
Some analysts aren’t so quick to downplay Black Friday’s importance. Joel Alden, a partner in the Consumer Products & Retail Practice at consulting firm A.T. Kearney, is confident that the five-day shopping holiday around Black Friday will continue to be the most important time of the year for retailers.
“Are there other competing days? Absolutely. I still think Black Friday will be among the biggest events of the year, it will be in the top three,” he said. “Retail needs those events and consumers need them to start the season.”
But looking at individual days, Alden believes weekends in December generally have a better chance at capturing traffic and sales because of last-minute shoppers. In 2014, 36% of shoppers saved their purchases until the week before Christmas — and procrastination is a hard habit to break.
“The other thing that is helpful to the December dates is that Christmas is on a Sunday, so they get an extra boost from that timing,” Alden said.
While the two weekends before Christmas may account for the single biggest sales days for retailers in 2016, Kohan cautioned that retailers should wait to breathe a sigh of relief because the sales won't be over yet. If retailers can keep up their momentum, the day after Christmas becomes a “tremendous opportunity” to bring in last-minute sales.
“Retailers have to nail the 26th and the 27th,” she said. “Those are the days of the 'after Christmas' sale.”
This story is part of our ongoing coverage of the 2016 holiday shopping season. You can browse our holiday page for more stories.
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