Since the late 2000s, Black Friday has become a retail staple in Canada surpassing the traditional Boxing Day sales as the most popular annual sale in this country.
Initially, the term ‘Black Friday’ can be traced back to 1869 when two Wall Street financiers attempted to purchase all of America’s gold to pump up its value. Their play for the gold failed, however, the term stuck and eventually more than 100 years later became associated with sales when retailers began noting they were ‘in the black’ as soon as Christmas shopping started.
“It has become another one of those consumer ritual occasions and from a buyer/retailer perspective it is now a key point on the calendar we all start to strategize for leading up to and following,” says Brad Davis, Associate Professor at Wilfrid Laurier University’s Lazaridis School of Business and Economics, who specializes in consumer behaviour and trends.
However, despite the ‘ritual’ aspect of shopping on Black Friday (Nov. 25) and Cyber Monday (Nov. 28), experts expect sales this year won’t be as brisk as in years past.
“Most of the signs indicate kind of a suppression of general sales for Black Friday and Cyber Monday,” says Brad, adding sales in 2021 were down by about 7% compared to the previous year. “I think last year we had this post pandemic burst of saved money and a desire by consumers to let loose. But it’s sort of settling back now into more normalcy because people have got it out of their systems.”
Factor in supply chain issues and the cost of inflation affecting consumers’ decisions, and Brad says the outcome could hold some surprises.
“There’s a lot of interesting question marks about consumers’ mood and are they going to be naturally a little more reticent to do impulse purchases because of inflation, rising prices and just general worry,” he says. “However, the flipside of that is anything that states: ‘regular retail on sale’ and consumers respond to it. They may be more susceptible to respond to that kind of pitch because they are worried about rising prices and think this is an opportunity to get stuff ‘at a deal’.”
Brick-and-mortar stores versus online shopping
“We saw online sales trending up before the pandemic and I’ve always said the pandemic and the response to it didn’t change anything, it just dramatically sped up existing trends,” says Brad, noting how much more ‘comfortable’ people are with ordering online for many items.
Not surprisingly in 2020 when things were locked down, Black Friday sales grew by 31% compared to pre-pandemic 2019 levels. And even with stores being reopened in 2021, Black Friday and Cyber Monday ecommerce sales still rose by 11.9% the whole month of November.
“Cyber Monday was actually starting to encroach, if not beat, Black Friday anyway before the pandemic in terms of popularity,” says Brad, adding the concepts of ‘Black Friday Month’ or ‘Cyber Monday Week’ have become more of reality now that larger retailers like Amazon and Target have implemented earlier sales.
However, when it comes to in-person shopping he says the tactile experience of going into a store remains a social exercise many consumers will continue to crave.
“We are still, by nature, two million old hunters and gatherers. We just do it in malls now,” jokes Brad. “I think we’re always going to have the need for physical retail.”
Supply chain and demand
Fear of shipping delays last year prompted many consumers to start their holiday shopping earlier on, and experts believe that has continued this year fueled by soaring gas prices plus global shipping complications.
Anecdotally, Brad says he’s heard that some categories of electronics are now very difficult for retailers to have in their inventory in effort to pull off some of the major deals they once offered on Black Friday.
“If you can’t physically get the stuff, what is that going to do if you want provide longer hours at your store?”
At the same time, he says some retailers may have higher volumes of inventory they are trying to clear out.
“You may not be seeing deals across the board anymore but instead, seeing a weird patchwork effect of deals going on as a direct reflection of what we have been going through,” says Brad.
Advice for business owners
When it comes to navigating Black Friday and Cyber Monday, Brad urges business owners to not get caught up in the ‘hype’ surrounding these shopping events.
“Make sure you do your due diligence and make sure you are making smart decisions and not just for that day, but a period of time,” he says, explaining trying to clear out too much inventory may lead to cashflow trouble down the line as consumers stock up on items and wait several months before spending again. “Don’t get caught up in the hype. You need to sit down and rationally look at the numbers to see if you need to clear out that inventory.”
* With files from the National Post and Calashock Commerce
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