Black Friday Was a Bust
The National Retail Federation has admitted defeat. Sales over the past holiday weekend dropped 11% over Thanksgiving weekend in 2013 according to the organization in a press release yesterday. The organization reversed course after being highly positive about the prospects for shopping leading up to the announcement of the estimated figures.
Shopping traffic for the weekend dropped 5% or 6%, depending on how you want to calculate it, compared to last year. The Federation tried to put a positive spin on the news.
I avoided shopping this weekend, from Thanksgiving day through today, the so-called Cyber Monday. Don’t get me wrong — there is much shopping I want to do before the holidays in December, but the excessive deal-wrangling this weekend just drives me away from wanting to pursue any shopping.
I’m not so much of a bargain hunter. I am interested in good deals, but most of the supposed bargains you see around Thanksgiving look good and sound good, but just aren’t all that good. And the details that are truly good, whatever that means, are almost always for items I wouldn’t want or don’t need.
For deal shoppers, the best time to buy is generally after Christmas, but there are a few obvious problems with that. First, it’s difficult to generalize. Overall, this might be true, but for any particular item, there’s no way to know. That’s why shoppers rely on Black Friday deal ads. They give shoppers some confidence, even if the resulting deal is not the most ideal price for any particular item. If you buy a gift using a Black Friday ad or Cyber Monday deal, you feel good about saving money, and for the human brain (but not your future self), that’s better than actually saving money.
The best method I’ve found for spotting good deals is CamelCamelCamel. This only applies if you have a specific item in mind, if that product is sold on Amazon.com, if Amazon.com generally offers the best price for that item among retailers, if you’re not on a tight time frame for making the purchase, and if you are willing to be a customer of Amazon.com. CamelCamelCamel is a website that tracks Amazon.com’s prices and can alert you whenever the price reaches a certain point. That price point could be one that you specify as your trigger, or it could be a price suggested by the CamelCamelCamel service using an algorithm that takes into the previous lowest price for the item.
The best thing about CamelCamelCamel is that it makes me wait. I’ve had items registered — it can work directly with your Amazon.com wish list if you want — for over a year, and suddenly, I’m alerted that an item, say a movie Blu Ray set, has reached my price point. The delay ensures I’m no longer under the influence of an impulse desire to purchase. Because if there’s something I want and need right away, and the cost is reasonable, I’m going to buy it right away rather than wait for a deal.
But if I know that, for example, the remastered Star Trek: The Next Generation season Blu Rays are eventually sold for more than a 60% discount off their initial sales price, usually within a year, I just set my price point trigger and wait.
And maybe more and more consumers are like me, bypassing the heavily advertised deals for more researched best prices. That could be one contributing factor to this year’s sharp decline in consumer activity over the traditionally biggest sales weekend of the year.
What role does the larger economy have? If people feel they are worse off financially, they might not plan on shopping as much this year as they did last year. If, however, people feel they are in a better financial position than they were last year, they could be less likely to pay attention to the holiday sales. In other words, you could use just about any state of the economy to justify both a strong and a weak holiday shopping season.
There might be some legitimacy to the idea that people feel better about the economy, which takes away from the desire to seek bargains at every opportunity. It’s clear that the recession in 2008 had long-lasting effects, not just in terms of employment, but in approach to life and money. Ideas like frugality, extreme saving, and supercharged planning for retirement became much more popular and legitimate than during times of stronger consumer confidence.
Throughout this period following the recession, I considered whether this was a permanent shift in approach along the lines of how the Great Depression affected an entire generation’s approach to money. The question was whether Millennials or Generation Y would be defined by the recession. My thought has always been that this is temporary, and I still think that is the case.
Perhaps this past weekend is the first indication that once Millennials feel more confident about their financial situation — and the lower gas prices may go a long way to reinforce that feeling today. Holiday sales are still driven by shoppers aged 18 to 34, so if this group is feeling better about the economy, this could be start of the generation’s shift away from conscious spending. It was fun (and successful) while it lasted.
The increase in confidence, whether it’s starting now or not, is going to have some profound effects. The value of assets — the stock market, real estate, etc. — will increase. Even if retailers continue to see problems throughout this year’s holiday season, the long-term prospect for sales are good. Confidence overflows into all areas of commerce, at least for some time. And during that time, shareholders benefit.
Workers feel confident about their employment prospects, so executives work harder to retain the best talent. Salaries increase. Disposable income increases. Prices also increase, but consumers handle it.
Another potential drawback that resulted in this year’s decrease in spending is the backlash surrounding the idea that retailers want to remain open on Thanksgiving Day. Retailers claim they are responding to customers’ demand to allow in-store shopping during the holiday, and there’s no doubt there are more than enough shoppers lined up during the holiday to give stores a reason to open. But employees are generally not happy. No one wants to be forced to work when the rest of the country is celebrating a holiday that supposedly focuses on time with family and friends.
And there are movements that encourage people to change their shopping behaviors during the holidays, whether’s it refusing to patronize stores that remain open on Thanksgiving, refusing to buy anything on Black Friday (also known as “Buy Nothing Day”), or encouraging shopping at family-owned local stores rather than large national and online retailers. These trends permeate Generation Y as much as or more than the desire to spend frugally. There’s no question that this disdain for large corporations, consumerist culture, and mass materialism has an effect on shopping attitudes for a good proportion of Millennial shoppers.
Did do any holiday shopping between Thursday and today? Was your approach different than last year’s? Are you spending more money for the holidays this year?