In July Amazon.com (NASDAQ:AMZN) successfully created Prime Day, a Black Friday-style sales event that gave the company one of the biggest sales days in its history.
Essentially the company gave consumers a reason to shop during a time of year not usually associated with buying. The faux holiday gave the online retailer a 266% spike in orders over the same day the previous year and produced 18% more orders than Black Friday 2014. The event was a massive hit that showed it was possible to change buying habits, even if only for one day.
Now, with the holiday season fast approaching an Amazon rival is attempting to break the traditional seasonal sales pattern. It's not as bold as holding Black Friday in July, but Best Buy's (NYSE:BBY) plan could shake up how retailers, Amazon included, approach the battle for people's gift-giving budget dollars.
The retail chain has announced a number of early holiday sales initiatives including free shipping from now until Jan. 2, 2016 and free Geek Squad setup on some top-tier tech gifts. Its most important initiative could be its attempt to cut to the head of the line by holding a Black Friday-like sales event on Nov. 7, 20 days ahead of the actual day (and 19 before some companies kick it off on Thanksgiving).
What is Best Buy doing?
In recent years a number of retailers have broken from the long-held tradition of kicking off their holiday sales starting on the Friday after Thanksgiving by opening on the evening of the actual holiday. Some have even offered online deals beginning the Monday of the holiday week, but Best Buy will be the first major chain to simply cut the line and schedule a major sale close to, but still well before, the traditional shopping season.
The company detailed its plans in a press release:
All Best Buy stores will offer Black Friday-like deals on this year's hottest gifts on Saturday, Nov. 7. Special holiday shopping events will take place in 400 participating Best Buy stores from 1 to 5 p.m. local time. Go to BestBuy.com/ShoppingEvent starting Oct. 29 to find a nearby participating store. The in-store events will feature robot and virtual reality demos run by Geek Squad Agents; a free tech gift for the first 100 customers, and the chance to win one of five $1,000 Best Buy gift cards through a Twitter sweepstakes.
It's an interesting strategy in part because the retailer is only offering the sales in a relatively small percentage of the company's over 1,700 stores for a limited number of hours. That's a plan that could either lead to confusion or create the charged up shopping environment that leads people to spend more than they planned.
Will this work?
While it's unlikely Best Buy will create something which equals Prime Day, if it offers actual good deals than it may steal some business from Amazon and other retailers. Being first could help if it delivers pricing that wows consumers. That's a challenge when in recent years, aside from certain "doorbuster" deals, waiting has often been a smart shopping strategy.
Still, people often enter the holiday season with a wish list. They know, for example, that they intend to buy a game console or a big television. Many consumers aren't partial to where they purchase those items they simply want to secure them at the best possible price.
If Best Buy makes it possible to buy those items on Nov. 7, at prices consumers consider a value, then it may ring up a big day that provides a boost to its overall holiday sales. It's a no-risk strategy where the worst case scenario is that the public simply wants to wait for Black Friday. If that happens all the company lost was some advertising money and a little pride.
This is a bold, aggressive play by Best Buy, but when you compete with a giant like Amazon you pretty much have to operate that way.
Daniel Kline has no position in any stocks mentioned. He rarely shops on Black Friday, but may go to the Nov. 7 Best Buy event. The Motley Fool owns shares of and recommends Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.