The Dangerous Game of Black Friday

Tech loves Black Friday. We have distinctive high-profile products that consumers want that drive considerable traffic to the retailers who sell it. But, there is a dark side to Black Friday that extends beyond just the lousy profit day (or days) it has become. Black Friday sucks in our consumers and delivers our best, most wanted products at rock bottom prices, leaving very little for the rest of the holiday. Our Anatomy of Black Friday Survey shows that while overall Black Friday shoppers say they have slightly more than 50 percent of their shopping still to complete, tech buyers say they have just 44 percent of shopping still remaining. And for folks who stay away from Black Friday, 2/3 of their shopping is done after the holiday weekend. Tech customers recognize that this is the time to shop. Nearly 60 percent of tech buyers bought Doorbusters, a number far above the typical consumer.

NPD’s Retail Tracking Service shows that 28 percent of all holiday season sales over the five week period for the past three years, happened during Black Friday week. It is tough to build a great holiday season, with high sales and sufficient profits when this week accounts for such a high percentage of sales and so much of those sales are dependent on blowout products and prices. Retailers have worked for ages to make those middle three holiday weeks more exciting to consumers but seemed to have largely failed and instead are now focused on delivering high revenue numbers for Black Friday week and then play Russian roulette with the rest of the season.

Finally, while Black Friday and the popularity of Doorbusters may hurt the tech business, it also likely does little good for the image of the tech business with its consumers. According to NPD’s Anatomy of Black Friday Survey, more than one-in-five consumers who planned to buy tech Doorbusters couldn’t because retailers were out of stock. While kudos go to Walmart for guaranteeing everyone a chance to buy the 10PM electronics Doorbusters it is unfortunate that they had to resort to that.

Limited supplies have always been part of Black Friday activities, but it is obvious that these limits cause distress to more customers. And the limits and scarcity contribute to long lines and a difficult shopping experience. According the The NPD Group’s Anatomy of Black Friday report nearly 40% of tech purchasers who wanted to buy a Doorbuster and didn’t cited the long lines as a big deterrent. Maybe we are victims of our own success. And of those who did buy nearly three times as many tech purchasers as overall buyers graded their experience in the store as a D or an F, again a likely result of the long lines and lack of stock. And as the competition with online retailers becomes more intense the ability of the internet to bypass the long lines and difficult shopping experience (although certainly not the stock-outs)gives that channel a distinct advantage over time.

While Black Friday weekend is a great sales opportunity for tech its popularity in some ways is running ahead of its usefulness and its purpose.
Long lines and big crowds discourage incremental purchases and limited quantities do a lot to make consumers wary of the process. The extension of sales into Thanksgiving and the apparent slight impact it will have on overall volumes means that we have likely wrung most of the value out of this event. With the on-going rush of online, the smartphone threatening to remake the shopping experience, and with tech feeling the first wave of that change this may be the time to get in front of the coming changes and rethink the value proposition that Black Friday has become.

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