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After Black Friday

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January 2017, article published originally in El Periódico de Catalunya

 

After Black Friday

Crazy black friday in the US

Two months have passed since Black Friday, 2016, which fell on November 24. Black Friday is an American commercial event that’s been imported to Europe. Big discounts. “Consumer holiday,” they call it. It’s like Halloween (another revelry we’ve taken from there), only instead of dressing up as zombies or witches, we dress up as bargain hunters, which is way scarier… for shops. The intriguing name originated in Philadelphia where, the day after Thanksgiving, the streets became packed with cars as people rushed for the big discounts that stores were offering that day. Police started calling it “Black Friday” because of the traffic.

Is Black Friday good or bad? Like everything, it depends. There’s a side A and side B to every record.

Side A: If I look at it through the eyes of the consumer, it’s obviously beneficial. Who doesn’t like candy? No one on Earth would say no to a bargain. In fact, 3 out of 4 people shop in advance; that is, they’ll spend sooner what they won’t spend later. We clearly can’t shop on Black Friday, then at Christmas, then during sales… Our pockets have limits – even the deepest ones!

Seeing as this premature sales date has been spreading throughout our continent for several years, statistics are now showing that we do actually shop ahead (we’re educating customers in sales), but not that we buy more. Plus, they’re discounted purchases.

Online sales continue to grow during Black Friday (and will continue to do so, consumers say), while in-store shopping keeps on dropping.

So, is this good or bad for business? Side B of the record (we’ve already listened to the other songs). We have to distinguish between small shops (independent stores, not linked to known brands) and big shops (big chains). The latter usually offer a wide (lots of categories in one store) and deep (lots of references for each category) range of products, and they can select which items will go on the sales rack and which won’t. Often they’ll even discount old stock they want to get rid of. They stake their claim on these references (and not on all the products), shouting SALE, which encourages customers to enter stores and buy. Moreover, these businesses have an invisible, silent, transparent yet overwhelming tool: Online shopping. With this, the music takes on a new meaning. And that is because online sales continue to grow during Black Friday (and will continue to do so, consumers say), while in-store shopping keeps on dropping. In other words, more profit is gained when selling both online and in-store.

All of this challenges small shops, since they haven’t mastered the world of promotional marketing (they don’t have time for everything), and their resources dedicated to online sales are usually smaller, for obvious reasons. Thus, Black Friday is indeed black, only it’s darker for some than others.

 

This article was originally published in Spanish in El Periódico de Cataluña. The gif is self-made, from a  video by Nexus

Formado en la Escuela Suiza (habla 4 idiomas), Pablo Foncillas es licenciado en derecho y MBA del IESE Business School. Compagina su vida en el entorno académico y como conferenciante junto con roles directivos y de consultoría en varias industrias desde los años 90. ¿Hablamos? Clica aquí para contactarme por correo electrónico