Consumers Seen Responding to Heavy Dose of Black Friday Deals

As the volume of Black Friday deals snowballs, the number of consumers actually shopping in stores on Black Friday could drop this year as more people turn to their mobile devices and computers to make holiday purchases. ShopperTrak projects a 2.4 percent increase in holiday sales over 2013 but forecasts a decline in foot traffic due to “consumers having a lot of access to virtual window shopping,” founder Bill Martin told Consumer Electronics Daily.

That hasn’t stopped everyone from car makers to big box stores from trying to capitalize on the retail phenomenon that has come to mean “deals” to cost-conscious shoppers. Abt Electronics General Manager Phil Hannon told us appliance makers have been aggressive in promotions all through November. The store’s pre-Black Friday sale bore that out with sales on the expected TVs and home theater gear along with coffee makers, vacuum cleaners and gas ranges. Sunday’s NFL football games were peppered with Black Friday ads from Chrysler, Jeep, Chevrolet and Walmart, as all sorts of retailers are hoping to pad year-end coffers through high-profile deals.

This year, “there’s more noise around trying to generate enthusiasm and get the energy up,” Martin said, noting the six fewer days of shopping between Thanksgiving and Christmas. Along with the uptick in pre-Black Friday advertising that’s been blanketing all forms of media, Martin expects retailers to have “some tricks in the bag” for Black Friday itself. Retailers have been planning “for months in advance so what we're seeing isn’t necessarily knee-jerk reaction,” he said. “It’s real strategy being put into play.” Still, some retailers are “saving their powder” for Black Friday, he said.

ShopperTrak expects Black Friday to “still be the largest selling day of the year,” but Martin said the trend is toward an earlier start to the shopping season that’s lasting for much of November, leading consumers to spend more money that month than they have in the past. That trend isn’t being driven by consumers wanting to buy a hot item before it sells out but by retailers’ concern that “a consumer’s wallet will drain … and that they'll run out of money before they get to December,” Martin said.

Consumers are responding to retailers’ efforts to get the shopping season off to an early start. In 2004 the holiday spend mix was 40.9 percent in November and 59.1 percent in December. Last year the percentage difference narrowed to 43.4 percent in November and 56.6 percent in December as retailers tried to “get to the wallet before the next guy,” Martin said.

The National Retail Federation (NRF) is holding to numbers it published in October, predicting a 3.9 percent uptick in consumer spending for the holiday season, which the trade group defines as November and December. The retail industry is on track to come out with a “relatively healthy” holiday season, spokeswoman Kathy Grannis told us.

Despite the spread of Black Friday marketing to other days in November -- and Thanksgiving -- the NRF doesn’t envision a drop in traffic for Black Friday. “For consumers, there’s only one Black Friday” even with competition coming from other sales events, Grannis said, calling Black Friday “the biggest and best day for sales.” She said Thanksgiving is an “added bonus” for retailers but not something they view as competition for the big day on Friday.

On the possibility of Black Friday fatigue with consumers who have been inundated with advertising already this season, Grannis acknowledged there will “probably be some.” She said “millions of other people” have been saving up for Black Friday, plan to camp outside for the deals they want and are “calling their aunts, sisters and mothers” to plan their Black Friday shopping events.

A report issued earlier this month by Adobe predicted Thanksgiving would eclipse Black Friday as the highest volume shopping day of the season within five years. This year, according to the study, Thanksgiving shopping is expected to generate roughly $1.1 billion compared with Black Friday at $1.6 billion. Last year, according to comScore, Thanksgiving sales totaled some $633 million, compared with more than $1 billion for Black Friday. Sales for Black Friday were up 26 percent last year compared with an increase of 32 percent on Thanksgiving, comScore said.

Despite the momentum Thanksgiving shopping has going, Martin of ShopperTrak doesn’t believe it’s sustainable. Thanksgiving store hours will “eventually fade away” as Black Friday continues as the main event, he said. Although Thanksgiving has delivered supplemental sales, “it’s not likely going to be profitable for retailers because the volumes aren’t high enough” to outweigh added costs of having to pay higher wages for the holiday and feed workers, Martin said. He cited a limited growth opportunity for Thanksgiving sales, noting the number of consumers who “refuse to shop” that day and retailers who won’t open on Black Friday. And if consumers do shop on Thanksgiving, that likely means they aren’t shopping on one of the other days during the four-day weekend, which in the end doesn’t add up for retailers, he said. “All the talk about Thanksgiving being the new Black Friday is completely unfounded,” Martin said, saying Kmart tried it in the early 1990s. “Eventually that faded away from lack of ability to generate a real profit,” he said.

Meanwhile, a Facebook post, “Say No to Shopping on Thanksgiving,” that’s been circulating for several weeks had 51,429 “likes” as of Monday afternoon. According to research commissioned by the International Council of Shopping Centers and Goldman Sachs, that group is far outnumbered. A survey of 1,000 U.S. shoppers between Oct. 31 and Nov. 3 indicated that 13 percent of U.S. shoppers plan to hit stores on Thanksgiving Day. Forty-six percent planned to shop in stores on Black Friday.