My question: is all this really necessary? This is like an arms race, with competitors challenged to see who can open the festivities earlier. If that’s case, perhaps retailers will begin to ask “Why close on Thanksgiving at all?” in future years.
If I were a retailer looking to tackle the competition on Black Friday, I would ask the following questions:
1) Many families travel during the Thanksgiving holiday – if I live in Chicago and then fly to San Francisco to spend the holiday with my family, am I likely to go shopping and bring all that stuff (“oooh, 60 inch 1080P HDTV for $699!” back with me? In not, current Black Friday sales are excluding this substantial customer base.
2) You are probably familiar with the concept of a loss leader – selling a high profile (see TV above) item at below cost in order to attract crowds and associated purchasing – I don’t just buy the TV but since I am at Walmart I might as well buy video cables, and all this other stuff I was planning to buy. On Black Friday, do these trends continue? Do people buy more, the same, or less than if you created that same loss leader on another day? If people were going to buy that stuff from you anyway, but on another day, have you really gained anything except a loss on the TV? If people don’t actually buy the video cables from you, or buy it on another day, then you’re really in trouble. My mental image of Black Friday is massive crowds. Is this really the time to be slowly looking through the store to see what else you might want to get, or do you just want to get that super-cheap stuff and get out?
3) On Black Friday, does this start the buying season or do more people start earlier or even later? (The biggest shopping day is actually right before Christmas). I actually start buying very early, at least 1 month before Thanksgiving.
4) Do people work harder (weekends, overtime) the weeks leading up to Thanksgiving or these normal work weeks? Are they available to shop?
If I work at Walmart and feel this huge pressure to make sure Americans are using their shopping dollars at my retail locations, I realize this is a zero sum game. The more I sell, the less other stores will get, leading to stronger quarters for me, weaker quarters for them. If I stay in business, those guys…anyway you get the idea. With more retailers offering price matching, even against online retailers like Amazon, retailing is a no-holds-barred dirty war. Retailers don’t care if they lose money on some items, they just want customers to pick them for holiday shopping first.
My solution is to skip Black Friday altogether. Start the bonanza a week earlier, create your own shopping holiday (like that has never happened before?) when everyone is home and can still buy stuff. Then, offer a price-match guarantee on anything that is bought that weekend for the rest of the holiday season. My goal is to take away as much money from the retail market as possible early before the big battles start, preempt everyone else.
- Advertise big, just as you would during Thanksgiving. But because you’re doing it when there is less competition, the ads are cheaper and you can get more coverage for the same rates. BLOW IT UP.
- Price-matching would be returned through gift cards. I do not care what customers buy from me, if I am going to price match in the future, I might as have them buy everything now.
- Think of price-matching as a mail-in rebate. A significant percentage of people will not bother to get the price match, but you have injected the confidence in customers that no one is going to beat you this holiday season. That means instant (financial) returns for you, the retailer who was going to price match anyway. I’d rather someone buy first from me and then forget to price match (money is worth more today than it is in two weeks) than someone either coming me to price match and buy something or just not bothering to price match and buying at that original retailer.
- Using customer-matching technology based on past purchasing, I would offer gift-card rewards based (the more you spend, the higher rewards tier you reach, the higher % you get back) on how much was purchased during the special pre-holiday weekend, further encouraging customers to max out their credit cards at my retailer during that holiday weekend, to be given back on December 25th. I want to optimize for the hoarder mentality. I would send the customer a SMS on Christmas morning with how much they got back in gift card credit – who wouldn’t want to wake up to that? I just spent a ton of money on my family, and (instead of regret from guilt) now I am told I get money for loving them.
- After this pre-Thanksgiving shopping holiday, I would just offer normal deals as you might expect – all I have done is move the craziness from Black Friday to a week earlier.
- In case shoppers are still procrastinators, I would mail them a catalog with great gift ideas one week before Christmas, and then redo my super duper price-buster price matching weekend (price match + tier rewards) one more time. I clean up at the beginning, before anyone is competing, and at the very end, in the mad desperation. Again, my aim right before Christmas is to suck every dollar from the wallet but leave the customer feeling great about it on Christmas day.
- (In case you’re wondering who shops on Christmas day itself, a LOT. As a teenager, I worked at Walgreens on Christmas day, and people would wait 30 minutes in line as cashiers rang up $1,000 shopping carts from customers buying anything available before seeing their families)
How fun would it be to take on retailers this way?