Ready or not, it's Black Friday time.
That one time of the year you get a chance to bum-rush a Best Buy at 4 a.m. and elbow your way to 50% savings on that stereo you've had your eye on. It's a uniquely American combination of consumerism, deal hunting, hysteria, and tryptophan that only the day after Thanksgiving can create, and while the calendar may not mention it, in our consumer-driven economy, this is the biggest day for American business.
This year, like seemingly every other, stores are opening even earlier, Many big retailers kick off sales at 8 p.m. on Thanksgiving, and Wal-Mart (NYSE:WMT) now starts at 6 p.m. Like any other competition, there are bound to be some winners and losers here. Let's take a closer look.
Who's eating those 25% or 50% markdowns? Whether it's on clothes, toys, or electronics, you can bet it won't be the manufacturers across the Pacific. Our biggest shopping day is a gold rush for suppliers in China and other foreign production hubs. While American retailers dogfight with each other for a sliver of your holiday budget, Chinese manufacturers will be sitting at home counting the receipts -- total U.S. consumer spending jumped to $59 billion over the four-day weekend last year.
The retailer that made an empire out of "Everyday Low Prices" knows a thing or two about discounting and getting customers in the door. To up the ante, it's opening at 6 p.m. Thursday, offering a price-match guarantee, rolling out Cyber Monday deals on Saturday, and offering free shipping on orders of more than $35 (matching Amazon.com's (NASDAQ:AMZN) shipping deal), not to mention blanketing the airwaves with ads.
Psst, holiday shoppers -- did you know you don't have to stand out in the cold at 4 a.m. waiting for the mall to open to get those doorbuster deals? There's this thing called the Internet, and you can buy (pretty much) anything on it.
The pandemonium surrounding Black Friday may be causing fatigue among some shoppers. In fact, in a recent survey the percentage of consumers who said they would buy online on Cyber Monday jumped from 30% a year ago to 46%, while the percentage who planned to visit brick-and-mortar stores on Black Friday fell to 13% from 17%. The scramble among brick-and-mortars to open earlier and earlier on Thanksgiving only gives Amazon the opportunity to position itself above the fray. With Christmas nearly a month away, the need to have your purchase immediately is no longer part of the equation.
The company has always faced critical light for its labor practices, but Wal-Mart recently gave itself a black eye with a decision by one of its Ohio stores to hold a Thanksgiving food drive for its own employees, a move that looks particularly callous with the holiday spirit and cries for a higher minimum wage in the background. For one of the world's biggest retailer's stores to ask its own employees to donate canned goods for co-workers is a bit like Nike asking for shoe donations, or Campbell Soup sending needy employees to a soup kitchen. It's Thanksgiving, Wal-Mart. How about taking one day out of the year to say "thank you" to your employees?
Additionally, a Wal-Mart labor group has promised 1,500 protests outside of stores on Black Friday.
2. The little guy
While Black Friday is clearly a boon for the mega-retailers and online giants like Amazon, small businesses, which don't have the advertising budgets or capacity to offer doorbuster deals, get left out in the cold. Though restaurants and other types of small businesses may benefit from the masses heading to the mall, most local shops aren't the target for holiday shopping.
To counteract this, American Express a few years ago invented "Small Business Saturday" to help support local business and add credit card swipes. While most consumers are aware of it, the day still feels like the red-headed stepchild of Black Friday and Cyber Monday, which offer the deep discounts that small businesses can't.
In a country known for its strong tradition of breaking traditions, as well as its no-holds-barred commercialism, perhaps it's no surprise that Thanksgiving, the most traditional of American holidays, has become a victim of Black Friday creep. Just a few years ago the shopping holiday was just that -- one day. But this year, nearly every major retailer will open its doors at least a few hours before midnight.
It may be easy to blame retailers for chipping away at Turkey Day, but the shoppers are showing up. Last year, Thanksgiving Day spending reached $810 million, a 55% increase from the year before. Even if those sales may be borrowed from other days in the holiday season, retailers would be foolish to let competitors grab them.