Issue of the week: What does Black Friday really tell us?
Black Friday “wasn’t a bust,” but for many retailers, it was a disappointment.
Black Friday “wasn’t a bust,” said Daniel Gross in TheDailyBeast.com, but for many retailers, it was a disappointment. Official sales figures for the day that launches the Christmas shopping season aren’t in yet, but a survey of some stores by the National Retail Federation found a 2.9 percent drop from last year’s Black Friday weekend. The question is how meaningful any number is; retailing is changing so fast that “comparing one year’s results to another’s is like comparing apples and oranges.” Online sales are growing three to four times faster than brick-and-mortar sales, and many companies started their Black Friday sales early this year. It’s possible that some Americans might have been “put off by the increasingly unpleasant, dangerous, and desperate Thanksgiving/Black Friday shopping frenzy.” Retailers expected better with stocks hitting record highs, lower unemployment rates, and a brightening economy. But the irony is that retailers themselves might be partly responsible for keeping spending in check. “The fuel that powers spending for most shoppers is wages, not savings, or dividends, or capital gains, or home equity.” If retailers want “to see a boom in holiday sales,” it’s time to “loosen the purse strings” and start paying a decent wage.
Do the results from Cyber Monday brighten the picture any? asked Lydia DePillis in WashingtonPost.com. Not as much as you might think. Adobe, which tracks activity on roughly 2,000 U.S. retail sites, said online sales were up by 16 percent on the day over last year. But online sales still represent just “a tiny percentage of overall volume—only 6 percent, according to the Census Bureau.” So while the digital revolution might make retailers feel threatened, “it’ll be a long time before” online shopping overtakes brick-and-mortar sales.
The whole weekend of retail frenzy largely backfired, said Walter Loeb in Forbes.com. “Stores did well, but it did not bring much more business than in past years.” If anything, I’d guess the extra shopping days led shoppers to tackle deals at a more leisurely pace. Stores like the Gap, Old Navy, Macy’s, and even J.C. Penney seemed to do well, but gains were “driven by here-and-now promotions.” Black Friday used to be “a much more genteel shopping experience” that gave shoppers a chance to browse and pick out what to give for Christmas. Now it’s “a blur” that doesn’t boost total sales.
Move along—nothing to see here, said Matthew Yglesias in Slate.com. “People spend what they’re going to spend on gifts during the holiday season,” so sales events like Black Friday are meaningless as an economic indicator. It’s true that consumer spending drives a large majority of economic output—70 percent, in fact—but what the Black Friday acolytes “don’t tell you is that paying the dentist to fill a cavity or paying a fee to your bank to use an out-of-network ATM counts as consumer spending,” too. When it comes to the economy at large, the stocking stuffers and Black Friday goodies that we think of as “consumer goods” are just a drop in the bucket.