Black Friday 2006 & Beyond
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The Friday after Thanksgiving has come to be called black in color because the ink in many retailers’ accounting ledgers changes from red to black with revenues, according to Mlive.com. Last Friday was the official start of the holiday shopping season.
Some stores opened on Thanksgiving Thursday in order to attract customers. For the first time in its history, Kmart opened its 1,400 stores on Thanksgiving Day. New York’s FAO Schwartz opened for business as well. In the online realm, the Financial Times reports that Amazon.com staged a Thanksgiving afternoon promotion where they sold 1,000 Xbox 360 gaming systems for a third of their advertised price.
Wal-Mart Stores Inc. advertised as aggressively as any other store but has seen flat sales for November, compared to this time last year. The company expects to report a 0.1 percent decline in November for stores opened at least a year, according to The Associated Press. Wal-Mart announced 17 “secret” items on its web site on Thanksgiving Thursday. These items included the newest Xbox gaming system, of which only six were available at each retail store.
J.C. Penney Co. said in a prepared statement, “We have seen brisk traffic in our stores, and our ‘redbox gifts’ selection is being well received by customers.” They went on to say that their holiday shopping season was “off to a good start,” according to the Associated Press
Wal-Mart started an advertising campaign in mid-October with price reductions on some 100 higher profile toys and continued onto cuts in consumer electronics and small appliances earlier in November, according to the Associated Press.
For all their escalated advertising efforts, Wal-Mart stores have averaged a disappointing gain of 2.4 percent in same-store sales for the February-October sales period, according to the International Council of Shopping Centers. The Associated Press reports that Target’s same-store sales took a 4.8 percent gain in the same period.
Despite consumer pessimism, economists are predicting strong consumer holiday spending, according to the Financial Times. This consumer pessimism is based on interest rate concerns and high fuel prices. Wayne Best, Visa USA’s chief economist, expects growth to 7.5 percent, with improved consumer confidence leading from lower fuel prices and a strong stock market.
The Associated Press reports that sales on Friday were up 6 percent over last year, according to ShopperTrak RCT Corp. Sales totaled some $8.96 billion.
Bill Martin told the Associated Press, “Although we anticipated a solid consumer turnout for Black Friday, this data shows an even larger increase than expected as consumers proved they were willing to spend.” Martin is a co-founder of ShopperTrak RCT Corp.
The results of the University of Michigan’s final measure of consumer sentiment show that U.S. consumers are riding a 15-month high as we start the holiday shopping season, according to Bloomberg.com. The Michigan index has averaged 88.1 since data was first compiled in 1978 but was 93.6 in October and was expected to slip to 93.3, according to a median estimate of 57 economists responding to a Bloomberg News survey.
Doug Porter told Bloomberg.com, “Sentiment is holding up and spending likely will as well in the key holiday season. Sentiment has been largely driven by the pullback in gasoline prices.”
With the overall success of Black Friday, retailers are looking at a successful Cyber Monday as well. The Washington Examiner reports that some 61 million people will be shopping online on Monday. This is an 18 percent increase over last year, according to BIGresearch in a recent survey. More than half of respondents planned to shop at work. Among 25 to 34-year olds, 71.5 said they planned to shop at work.
“Online retailers typically see huge surges in Web site traffic during traditional lunch hours. Shopping at work can be a great way for many consumers to complete holiday buying without having to worry about sneaky gift recipients looking over their shoulders,” said Scott Silverman, executive director of Shop.org, to the Associated Press.
Lynn Blacker may sum it up the best. She is the marketing manager for the Tysons Corner Center in McLean, VA. Blacker told the Washington Examiner, “Online shopping is certainly an issue, but the sensuality of shopping and touching the merchandise is really part of holiday shopping. The sounds and smells of holiday shopping are not online – and neither is Santa”