With fewer days in the holiday shopping season this year, retailers are gearing up for the frenzy of Black Friday and Cyber Monday. In addition, some are hedging their bets and starting sales early. But what can brick-and-mortar stores and online retailers actually expect this season?
Dora Bock, an associate professor of marketing in Auburn University’s Harbert College of Business, researches customer relationships, gratitude and decision making in her work, which has appeared in numerous journals. Bock weighs in on what retailers can expect this holiday shopping season.
What is your prediction for this year’s Black Friday?
Holiday retail sales are forecasted to increase about 4-5 percent this year. For Black Friday specifically, there may be lower in-store sales but higher online sales. In fact, for the holiday season, online spending is expected to grow over 14 percent and reach around $145 billion. This is a function of different retailing strategies, with companies offering deals online and having sales earlier than last year. In fact, you likely already see some retailers starting their holiday sales throughout the entire month of November. Target, for instance, launched a preview Black Friday sale on Nov. 8-9, in which customers could get the same deals as those that will be offered on Black Friday.
How much do businesses rely on Black Friday for a successful year staying out the red?
It depends on the company. Indeed, many retailers and oftentimes small, local businesses rely on a successful fourth quarter to be successful for the year. However, many companies do not necessarily rely on Black Friday specifically. For instance, Amazon reported that this year during Amazon’s Prime Day, in which Amazon Prime members could shop hundreds of deals on the website for 36 hours in July, the company sold more than 175 million items, which is more than the company’s Black Friday and Cyber Monday sales combined. In fact, the company claimed it was the “largest shopping event in Amazon history.”
What changes/trends are you seeing in sales tactics involving Black Friday?
Companies are changing their sales tactics so that it’s not just Black Friday (or starting Thanksgiving Day) anymore. Instead, you are seeing sales earlier and earlier each year, often beginning in early November. For instance, starting this year, some retailers created a new retail holiday, called Cash Back Day, on the first Thursday in November. What Cash Back Day does is allow online shoppers to get cash back for their purchases. Many major retailers participated in this new retail holiday, including Home Depot, Macy’s, Amazon, Bass Pro Shops and Kay Jewelers, to name a few. The catch is that to get the cash back, which can be up to 20 percent back, the consumer needs to register through the website RetailMeNot and shop online. The cash doesn’t come right away. Instead, it takes about 45 days, so the cash will come right before the end of the holiday season. In other words, the cash will be returned to help pay for any last-minute holiday purchases or entice the consumer to purchase something for him or herself. Ultimately, Cash Back Day is another way to get the customer to shop early, and from a retailer’s standpoint, hopefully get the consumer to buy more throughout the entire holiday season.
Do you foresee a time when Cyber Monday sales might outpace those of Black Friday?
To some extent they already have. It really depends on who is doing the shopping. The younger shoppers, such as Generation Z shoppers, anticipate spending more on Cyber Monday than they do on Black Friday, which makes sense, as these consumers are tech savvy and are very connected to their phone.
A study by Deloitte found that consumers generally prefer snagging deals on Cyber Monday over Black Friday. Consumers just aren’t as excited about racing out to a store to wait in lines or crowds, when they can get the same deal by making a purchase online in the comfort of their home. Further, Deloitte’s study found that consumers expect to spend more of their holiday budget online compared to in-store. These trends suggest that as retailers are changing their tactics and spreading sales throughout the month of November, purchases made specifically on Black Friday may decline a bit.
Is there a general rule of thumb on which day — Black Friday or Cyber Monday — offers the better sales deal?
Black Friday and Cyber Monday sales vary by retailer, so it’s best to shop around and look at the sales different retailers are offering. But, typically, you’ll see better sales on electronics, TVs, appliances or big ticket items on Black Friday, whereas on Cyber Monday, you’ll see better deals on smaller items, and oftentimes clothing. Clothing prices, though, will oftentimes be even further reduced toward the end of December.
Dora Bock is an associate professor of marketing in Auburn University’s Harbert College of Business. Her research focuses on customer relationships, gratitude and decision making, and her work has appeared in numerous journals. In 2016, she and her colleagues received the Best Article of the Year Award from the Journal of Marketing Theory and Practice. Bock’s research also has been highlighted in the Wall Street Journal, HR Magazine and AL.com and she is a recipient of the prestigious Lowder Teaching Award from the Harbert College of Business.