Black Friday: May the odds be ever in your favour
23 November 2017
What is Black Friday and where did it come from?
The simple answer is that it is a bit like Halloween, it started in America and seems to have made its way to the UK and many other parts of the world. Historically, Black Friday is the day after Thanksgiving in the US which always takes place on the fourth Thursday of November. So Black Friday is always on the fourth Friday in November and it is traditionally when Americans go shopping while retailers and brands drop their prices and offer serious discounts and promotions.
Black Friday particularly took off in the 50s and 60s in line with the real development of consumption in the US following World War II. Many large stores such as Macy’s or JC Penney would open especially early to offer bargains to eager shoppers and a frenzied day of shopping would take place.
Where does the name come from?
There does not seem to be one definitive answer to this question but rather several suggestions. For example, that the name relates to the fact that many workers took the day off after the Thanksgiving festival as a result of eating and drinking leading to high absenteeism for employers. Another is that it relates to the busy congestion that results from everyone out shopping. But a commonly accepted view in the business world is that it signals the day when retailers go from being ‘in the red’ to ‘in the black’ in terms of their accounts due to bumper sales.
No matter what the name refers to, it has become synonymous with the start of the Christmas shopping period and a time when consumers can get some real bargains. The idea started to take hold in the UK and some European countries from the early 2000s with the arrival of large US retailers such as Amazon or ASDA (a subsidiary of Walmart) who introduced the same opportunity to shoppers. Now in 2017 many UK retailers such as John Lewis, Argos or Currys are using this as a promotional period, as well as leading brands such as Microsoft, Nike and Land Rover who are similarly promoting Black Friday to entice customers to buy both instore and online.
Is it good for business?
Clearly Black Friday stimulates shopping interest in retailers and brands which has to be good for business. Anything that raises brand awareness and interaction with the customer is welcomed by business. With the constant rise in e-commerce and the ease and convenience that online shopping provides, predictions are that sales will continue to rise year-on-year with ‘Cyber Monday’ on the 27th November being the biggest online shopping day ever with sales in the US rising 16.5% year-on-year to $6.6bn in the US and by 16.4% to $5bn on Black Friday (Source: Adobe Digital Insigts/FT.com). One of the world’s largest consumer markets is China where they have similarly developed their own version known as “Singles Day” which was on 11th November. Promoted and led strongly by the largest e-commerce retailer ‘Alibaba’, this year saw sales of $25bn (168.2bn Yuan) (Source: The Guardian).
Now we see many retailers extending the period of their promotions they have on offer, rather than focusing just on Black Friday as one day. This year Amazon are offering promotions for an extended period of 17th to 26th November so spreading the buying period. This may be useful to the retailer given the frenzied sales we have seen both in-store and online in previous years. It eases the buying process for both customers and retailers making the shopping process and operational distribution smoother.
Is it good for the customer?
This extension of the buying period and the rise in e-commerce means that this active buying period has become synonymous with online shopping and many questions are being asked. Is this period of promotions and discounts of real value to the consumer? Or is it a means to just encourage more spending?
Many criticisms are voiced at the Internet today but a key benefit that it offers to the consumer is the ability to research and source detailed information about products and services. The smart customer can be well informed in advance of making a buying decision and many tools are at their disposal in addition to the information on retailers’ websites. These include price comparison websites; third-party intermediary portals (e.g. Trip Advisor); recommendations from other consumers about their experiences, shopper blogs and social media conversations. If the customer uses these sources of information wisely to assess the brand proposition they should be able to make smart decisions. Access to online information has shifted the power balance in the shopper’s favour.