Saturday, November 24, 2012

After the Madness of Black Friday

Today is the third day of the extended Thanksgiving weekend in the United States. It is the day after Black Friday, the busiest shopping day of the year. Many retail stores are just as accessible today as they were yesterday, yet the number of shoppers is far more manageable. Early this morning, at 7:34, I stopped in at Home Goods. It is safe to say that no one was breaking down the doors. It appeared I was the first customer to enter a store that a full four minutes before had opened its doors early. During the first half hour there were perhaps five more customers in the store. Store employees were busy restocking displays depleted by the previous day’s shoppers.

This made me think about the evolution of doorbusters, the surprising early-morning discounts that Black Friday has become known for. These discounts were first introduced as a token reward for shoppers who were willing to come out early, at 7:30 or 7:00 or 6:00, before the mid-morning crowds arrived. They were intended, that is, to reduce the risk of overcrowded conditions in the stores. Somehow doorbusters evolved from that into big-ticket, limited-quantity discounts that brought the biggest crowds to the store when the doors opened, creating the frightening situations in which hundreds of shoppers jostle for position at the closed doors of a retail store at 5 a.m. or, a recent innovation, midnight, and where store managers must make contingency plans in case the crowds actually do break down the doors before the planned opening time.

As I shopped in a nearly empty store in the early morning I thought, “This is what Black Friday ought to be like.” I imagined what it would be like if the extended hours of Black Friday could create a low-pressure shopping experience. But, of course, today is just one day after Black Friday, and most shoppers have the option of skipping Black Friday entirely and shopping today instead. And of course, I am not the first person to think of this. From what I have heard, yesterday was, in some ways, more low-key than the Black Fridays of recent years, as many shoppers, like me, kept their distance from the shopping madness.

On my way out of Home Goods this morning, I drove past Best Buy. It was 8:00 a.m., but the consumer electronics giant was not yet open. It did not have enough staff to open for extended hours on Black Friday and on the next day too. But shoppers did not understand this and walked up to the store’s front entrance in one small group after another only to read the sign and walk away. This is a particularly ironic problem for Best Buy, the only major retailer that is believed to actually lose money on Black Friday because of the size of the discounts on big-ticket items. It needs shocking discounts to get customers into the store, or at least that is the rationale, and Best Buy has come to accept that it will not sell enough other items to make up for the losses on the headline items on Black Friday. For Best Buy, Black Friday is something of a publicity stunt, an annual chance to remind customers that they still exist. But they lose so much money on Black Friday that there is some doubt that they will still be around to do it again in 2013. It would seem Best Buy would be better off to have only token Black Friday sales, and to reserve enough energy to open their store early for the customers they turned away this morning, customers who would actually be profitable for the store.

This, of course, is the kind of thinking that is part of the next stages in the evolution of Black Friday. The hype has gone too far if many people’s first thought about Black Friday is the hope that, this year, no one gets killed. If Best Buy has to wonder how it will make up its Black Friday losses in the coming weeks and months, it is a sign that Black Friday has gone so far it has become self-defeating. Black Friday was named for the hope that a day of solid Christmas-season sales would put a retail store in a profitable position, known as “black” in accounting jargon, for the year. In the end, that profit has to be there, or the whole event will have to be changed around again.

I am not anticipating bank closings tonight during the extended holiday weekend. This Week in Bank Failures will return next week.