When it comes to the advancement of technology, we are on the fast track in a very fast train. This speeding train forces many former things out of the way in what seems like the blink of an eye: telephone landlines, music storefronts, and bookstores, just to name a few. Add to the list: Black Friday.
Even though it is a relatively contemporary event, beginning just a little more than a decade ago in 2000, it started to brush against that technology train in 2003, and is now heading on a rapid collision course.
Those who are old enough may remember when retail stores began opening earlier and earlier on the day after Thanksgiving. This was taken to a new extreme in 2011 with multiple retailers opening at midnight the night of Thanksgiving. In 2012, with the threat of losing revenue to the early bird stores, many retailers began to open their doors with discount deals on Thanksgiving Day itself at 5:00 or 6:00 p.m. As the frenzy to get customers in stores to get the best deals turned into a seeming crap shoot, the national news began carrying stories of violence amongst shoppers vying for the best deals. From a fist fight, to pepper spray to trampling a Walmart employee to death and the use of firearms, perhaps watching the decline of Black Friday as the main event is a welcomed change.
Ultimately, with online retailers broadening their scope of products, brick and mortar retailers are in a race to catch up with new consumer trends. Once an online bookstore, Amazon is now an ‘everything you need or want’ store. The book published last year about Amazon creator Jeff Bezos is actually entitled “The Everything Store.” Other online retailers are taking notice and expanding as well. However, as the consumer market is shifting, brick and mortar retailers are taking note and making changes in order to capture more of the growing online shopping community.
On the Dec. 10th edition of CBS This Morning, Walmart CEO Doug McMillon was interviewed by Charlie Rose and discussed the retail technology transformation and what Walmart is doing to catch up. McMillon stated that “the key to winning customers is to figure out the best combination of the brick-and-mortar stores and virtual ones.”
As it turns out, over Thanksgiving Day weekend 70% of Walmart online purchases were made from shoppers’ mobile devices. McMillon admitted that surprised even him. “We believe in learning from other people, and what Amazon’s doing is showing us and showing the world what’s possible. I admire that.” He went on to describe Amazon’s business practices by saying “[They’re] very customer focused, moving with speed, just putting ideas at work that are directly beneficial to customers.”
In fact, McMillon has apparently given every executive in his company a copy of Bezos’ biography. So compelling is the speed of the technology train, that Walmart is pouring nearly $2 billion into e-commerce — an investment that’s being managed not in Arkansas where the retail giant has its roots, but in Silicon Valley. There, analysts study online activity by the minute.
According to the Retail Council of New York State, Merchants across New York said Black Friday sales were down 6-8% from year prior year levels. But Ted Potrikus, the council’s president and CEO, cautioned against reading too much into the report. “That’s just a Friday-against-Friday comparison,” he said. “That’s the equivalent of an academic incomplete in that there were sales happening on Thanksgiving Day and well before.”
It is true that many department stores and other retailers opened Thanksgiving evening this year, and shoppers were out earlier than in previous years. In addition, retailers have been running “Black Friday” sales since at least the beginning of November.
“The Black Friday weekend was probably 20 days long,” Potrikus said. “If you take all of the sales in the weeks before and concentrated them into the Thanksgiving weekend, it would be a strong season so far.”
The National Retail Federation reported that nation-wide, sales on what many consider the traditional start of the Christmas shopping season were down 11.5% from prior year levels. Retailers like Walmart spread their specials and sales prices out over five or more days in an effort to reduce the early Friday morning rush at stores and the mayhem that often results.
Clearly, retailers are all coming to the same conclusion: the success of the season is no longer based on one day. Not only is it too dangerous to have mobs of shoppers waiting for doors to open on one specific day, but the comforts and convenience of shopping online is growing exponentially. Perhaps it’s not fair to say that Black Friday was a total bust when, according to online.barrons.com, Walmart had more than 22 million customers shopping at their store locations on Thursday. Walmart also reported that Thursday was their second highest online sales day ever.
But frankly, Black Friday isn’t in sync with the current customer base and shopping trends. It is simply becoming something that is no longer culturally relevant.
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