Amazon's Black Friday: Don't Discount Retailers

Every year retailers compete to see who can capture the most sales by offering the best deals and incentives. According to an NRF survey, close to half of consumers have been tackling their holiday lists early again this year, with 41% who started shopping in October or earlier. To match the demand, retailers have started to launch their holiday campaigns earlier. In 2014, Home Depot kicked off the holiday season on Sept. 5. Last year, Kmart launched its Holiday layaway ad campaign, on Labor Day.

We appear to decking the halls earlier each year, rung in by advertisers urging consumers to either embrace the merriment or evade the utter chaos. This year, it wasn’t a retailer’s ad campaign, but an ecommerce marketplace throwing down the holly gauntlet. The bold ecommerce play has retail experts and analysts questioning the future of the shopping season. Will Amazon’s dramatic move dismantle storefront festivities? Is this the end of Black Friday as we know it? 

Not quite. 

Since its introduction in the 1980s and maturation in the '90s, Black Friday’s loyalty continues to gain steam. NRF’s 2015 Thanksgiving Weekend Survey revealed 103 million Americans shopped online over the Thanksgiving-Black Friday weekend, but traditional brick-and-mortar stores trailed closely behind with 102 million Americans shopping in-store. Amazon is constantly innovating and pushing boundaries, but sentiment shouldn’t be that this move will eliminate Black Friday, rather further the anticipation, particularly around the quality and quantity of those coveted deals- deals which the majority of consumers hold out for.

Having nearly cornered the market on expedited delivery with Prime, Amazon no doubt remains an ecommerce change agent. This latest strategy reflects their reading of the omni-channel tea leaves considering last year’s results, which was reported that over a third of all online sales that occurred on Black Friday were through Amazon. With the NRF is forecasting a 3.6% increase in November and December 2016 sales, which translates to $655.8 billion, let’s not discount what retailers have up their sleeves. 

The preparations are already underway for the night owls and early rising droves. Major department stores such as Sear’s, Macy’s, Kohl’s have all announced Black Friday hours ranging from 3 p.m. Thursday to 1 a.m. Friday morning. But many retailers are also launching offerings in advance of the Black Friday holiday to re-engage the fan base. Walmart has its Black Friday agenda set but in the meantime is offering massive online specials. Further, the retailer upping its entire ecommerce game, recently announcing Black Friday sales will start online at 12:01 a.m. Eastern Thanksgiving Day. This is three hours earlier than 2015’s and several hours ahead of the 6 p.m. in-store doorbusters.

With select Amazon deals underway, we won’t see the most alluring ones until the official Black Friday. This ramp up from Amazon naturally aims to capture sales and prime shoppers during pre-season, and therefore lacks the product variety and cache many shoppers are seeking. Conversely, retailers offering a broader assortment of desired products, coupled with hyperlocal and personalized offerings, can directly appeal to customers with brand affinity, both in-store and online. Consumers are angling to capitalize on the hefty discounts but moreover, stuff their stockings with specific items on their curated list. Last year, Toy R Us CEO, Dave Brandon noted the gaming category performed exceptionally well during the Black Friday rush, specifically the popular Pie Face Game from Hasbro, Cadillac Escalade Remote Control Cars and all things Paw Patrol. 

The unofficial start to the holiday season isn’t handing over the reins to ecommerce just yet. According to NPD Group’s Marshal Cohen, the stores that ramped up their early-only Black Friday deals saw a 6% increase in consumers shopping compared to a week prior. Preparation and anticipation can yield significant return, conditioning shoppers with the assurance that they will not have to check their lists twice.

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