The holiday season is about to get underway with what is expected to be the single greatest spending orgy in the history of commerce with more than $20 billion spent on Black Friday compared with $19.3 billion last year, according to MasterCard Advisors SpendingPulse.
“If trends hold, factors such as extra store hours, increasing Internet promotions and inflation could result in Black Friday 2011 becoming the first single day with a legitimate chance of clearing the $20 billion threshold,” said Michael McNamara, VP for research and analysis with SpendingPulse.
As many as 152 million people plan to shop Black Friday Weekend, compared with 138 million who planned to do so last year, according to a preliminary Black Friday shopping survey, conducted for the National Retail Federation by BIGresearch.
Although the survey was conducted before retailers announced their Black Friday opening hours, it is apparent that the early availability of deals on the part of retailers, many of whom plan to open late Thanksgiving evening or at midnight, is simplifying the Black Friday experience for shoppers and expanding the pool of participants.
“We fully expect to see excited shoppers as early as midnight at stores around the country, as many holiday shoppers would rather stay up all night to take advantage of retailers’ Black Friday deals rather than set their alarm to wake up the next morning.” said NRF president and CEO Matthew Shay.
The other key trend benefitting shoppers is retailers are disclosing their deals early and leveraging technology and social media tools to do so, allowing shoppers to better plan their excursions. For example, a shopper looking for toys could hit Kmart first since their deals are available on Thanksgiving, swing by Toys “R” Us when its deal become available at 9 p.m., then head to Walmart at 10 p.m. and Target at midnight.
It was only a few years ago that shoppers had to wait until their local paper was delivered Thanksgiving morning to get a glimpse of doorbuster deals, and retailers exercised some restraint with opening hours in the neighborhood of 6 a.m. Then little by little there would be a retailer here or there that would break ranks in order to gain an advantage and decided to open at 5 a.m. or maybe 4 a.m.
The economic weakness of recent years fueled the deal-buying madness until the industry this year basically hit the point of no return and chain after chain announced they would be open at midnight on Black Friday with a handful pushing back even further into Thanksgiving.
The desire to capture early-season sales amid a challenging economic climate has become a competitive necessity and has changed the entire dynamic of holiday promotions. However, the record turnouts and record sales that are anticipated this year means retailers will face an uneven pace of sales that is likely to be even more pronounced than last year when shoppers responded to early-season promotional efforts that led to strong November sales, but then went into hibernation causing weakness in December.
The saving grace this year could be the fact that retailers tend to be good historians. The winners this year are likely to be those who learned the lessons of Christmas 2010 and have promotional strategies in place to capture sales throughout December and after Christmas when gift card redemptions occur.