Will the economic crisis affect Black Friday? Predictions from Dealnews.com
Filed under: Shopping, Technology, Black Friday
Black Friday has traditionally been one of the busiest and most frantic shopping days of the year but with Christmas sales down in 2007 and the economy looking like a leftover fruitcake, many people are wondering if Black Friday can live up to past performances.To better grasp the severity of the situation I enlisted the help of Dan de Grandpre, the current CEO of Dealnews.com. Dan is one of the most qualified individuals I know to assist in this as he has over 12 years of deal hunting experience as well as the ability to keenly identify industry trends. The Dealnews.com CEO backs up his team's experience surrounding retail sales and promotions by boasting that Dealnews.com has saved visitors hundreds of millions of dollars.
Black Friday needs only three things to be successful: retailers with amazing deals, willing consumers and money. Without any one of these items Black Friday ceases to be the spectacle that retailers and shoppers have come to know and love. In order to understand how the economy affects any of these three elements it is important to understand the relationship between retailers and consumers.
Scenes from Holidays Past
SHANGHAI, CHINA - DECEMBER 23: (CHINA OUT) People take pictures in front of light decorations featuring reindeers installed for the upcoming Christmas at a shopping center on December 23, 2007 in Shanghai, China. Western traditions such as Christmas Day, Valentine's Day and Halloween have become increasingly popular among Chinese youth, as shops, restaurants and bars look to use such calendar dates to promote their businesses. (Photo by China Photos/Getty Images)
Getty Images
NEW YORK - DECEMBER 20: Skaters pass beneath the Rockefeller Center Christmas tree December 20, 2007 in New York City. With Christmas five days away, merchants are hoping last-minute shoppers will help them rebound from a slow holiday shopping season. (Photo by Mario Tama/Getty Images)
Getty Images
NEW YORK - DECEMBER 20: Visitors view the holiday displays at Rockefeller Center December 20, 2007 in New York City. With Christmas five days away, merchants are hoping last-minute shoppers will help them rebound from a slow holiday shopping season. (Photo by Mario Tama/Getty Images)
Getty Images
NEW YORK - DECEMBER 20: Visitors photograph the Rockefeller Center Christmas tree is seen December 20, 2007 in New York City. With Christmas five days away, merchants are hoping last-minute shoppers will help them rebound from a slow holiday shopping season. (Photo by Mario Tama/Getty Images)
Getty Images
NEW YORK - DECEMBER 20: Shoppers walk past the Rockefeller Center Christmas tree December 20, 2007 in New York City. With Christmas five days away, merchants are hoping last-minute shoppers will help them rebound from a slow holiday shopping season. (Photo by Mario Tama/Getty Images)
Getty Images
NEW YORK - DECEMBER 20: Visitors walk past the Rockefeller Center Christmas tree December 20, 2007 in New York City. With Christmas five days away, merchants are hoping last-minute shoppers will help them rebound from a slow holiday shopping season. (Photo by Mario Tama/Getty Images)
Getty Images
NEW YORK - DECEMBER 20: A shopper looks at a sale item in Saks Fifth Avenue December 20, 2007 in New York City. With Christmas five days away, merchants are hoping last-minute shoppers will help them rebound from a slow holiday shopping season. (Photo by Mario Tama/Getty Images)
Getty Images
NEW YORK - DECEMBER 20: Visitors view the Christmas windows at Saks Fifth Avenue December 20, 2007 in New York City. With Christmas five days away, merchants are hoping last-minute shoppers will help them rebound from a slow holiday shopping season. (Photo by Mario Tama/Getty Images)
Getty Images
NEW YORK - DECEMBER 20: Shoppers and onlookers view the Rockefeller Center Christmas tree December 20, 2007 in New York City. With Christmas five days away, merchants are hoping last-minute shoppers will help them rebound from a slow holiday shopping season. (Photo by Mario Tama/Getty Images)
Getty Images
NEW YORK - DECEMBER 20: Shoppers are seen on Madison Avenue December 20, 2007 in New York City. With Christmas five days away, merchants are hoping last-minute shoppers will help them rebound from a slow holiday shopping season. (Photo by Mario Tama/Getty Images)
Getty Images
While it is easy to assume that the retailers hold the majority of the power in this situation due to the fact that they set the sales and promotions, Dan was quick to point out that the source of power is with the consumer. Since we hold the money in this menage a trois of consumerism, we have the bulk of the power on Black Friday and in most retail transactions. Dan explained that, "If consumers exercise patience and don't participate in poorly priced sales then retailers will inevitably need to give up margin in order to sell their merchandise."
Since consumers have the power to wait even if the economy convinces retailers to hold back on spectacular deals for Black Friday this year, we can still expect to see retailers drop prices and offer sales before Christmas in order to make sales goals.
Despite the current state of the economy, the outlook for Black Friday is still good, and Dan predicts that we'll see low low prices on all kinds of consumer goods from computer equipment and HDTV's to power tools this year. Black Friday has come a long way from the first time I stood in line many years ago and it seems that every year a new store or industry hops into the retail smorgasbord with this year being no different.
Dan expects to see more couture and high end labels reaching out to consumers on Black Friday both online and in their brick and mortar stores as they experience the affects of a slowing economy. Labels such as Gucci, Kate Spade and Prada will likely have apparel, accessories and leather coats on sale this year. Shoppers can also expect to see even more deals online as early as Thanksgiving Day as retailers mirror many of their discounts online with free shipping which lets you sleep in and avoid the crowds!
The final thing to remember about Black Friday is that it is a shopping day which revolves around quantity rather than quality. This makes Black Friday the perfect time to follow the lead of the Dealnews.com staff and pick up memory cards and digital cameras or even a second TV for next to nothing. The fun part of shopping on Black Friday for Dan is that he doesn't know what he is going to end up with except to know that his gift closet will be filled up with many of the opportunistic buys that seem to surface on Black Friday.
Thankfully those of us looking for high quality merchandise can count on good deals later this year with high-end TV's and toys both getting better discounts in early December so stay sharp and remember to stay tuned to our additional BLack Friday coverage at WalletPop and to the deals that Dan and his team put together at Dealnews.com!
Recent Posts
- The best and worst of the online shopping cashback sites (11/19/2008)
- If nobody shops, nobody eats (11/19/2008)
- Craigslist hooks up dope users, dealers (11/19/2008)
- Boomers worry retirement won't be what they had hoped (11/19/2008)
- Black Friday roundup is back, Best Buy, Target, Staples and more (11/19/2008)
Reader Comments (Page 1 of 1)
10-05-2008 @ 1:25PM
Levon said...
I think people will think more before they buy.
Reply
10-05-2008 @ 1:29PM
David said...
More Black Friday predictions (and more realistic IMO):
http://blackfriday.gottadeal.com/BlackFridayPredictions
These guys have had this BF site for 5-6 years so they know what to expect each year.
Reply
10-05-2008 @ 1:30PM
Love A Good Sale* said...
I hope the big wig companies take the small consumers into consideration when they place items on sale. What good is a sale if the prices are down only 20-30%? They need to put things consumers need, not want just because its on sale.
Reply
10-05-2008 @ 10:06PM
Die-hard shopper said...
I think the stores aslo need to stock more then 20 per store of a "HOT ITEM"
Reply
11-08-2008 @ 12:51PM
Tom said...
Will you be alone on Black Friday? Will the economy scare the other shoppers away? Will the stores be afraid to sell items for less? Should you save your money and hope a better deal comes along later – or use it to pay the rent?
Black Friday needs only two things to be successful: stores with unbelievable deals and people in the stores with cash or credit. Will the economy affect any of these things?
No! What? Are you nuts?
Think about it – it’s going to be the best Black Friday ever for the consumer and here’s why:
1. Economy up or down doesn’t affect my desire for a big screen HDTV. I want it, I want it, I want it.
2. Economy down and other people not buying means Best Buy has a warehouse full of Sony and Samsung TVs – and Sony and Samsung have their own warehouses full. Those businesses have their cash tied up in inventory. They need cash. They get cash only if they sell their inventory. At the end of a quarter and the end of the year – both happen on December 31 – Best Buy, Sony, Samsung and all other businesses want their financial reports showing sales, the warehouse empty and their bank accounts full. They will sell their inventory for retail, wholesale, at a loss – they don’t care – they need to sell it. That’s good for me and you.
3. People either have cash or credit. Think a lack of cash stops them? Duh. Banks hand out credit cards like Halloween candy.
So there you have it. Manufactures and retail stores with too much inventory, too little sales and too little cash. People with all the credit they need.
No manufacturer or stores is going to pass up this last opportunity to sell something – they’re scared and everything will be at ridiculously low prices.
How will the economy affect 2008 Black Friday? It will produce record low prices.
I suggest people stay tuned to 2008 Black Friday Ads sites like http://www.2008BlackFridayAds.com That site and others will keep showing the best deals from now, thru the end of the year and into 2009. There’s deals to be had!
Reply
11-12-2008 @ 9:08AM
Kris said...
Tom could be right but....
There are individuals who actually think before purchasing now. I am one of them. I did not use to be, but I am now. I think about other things that are important to my newly found life in America (the broke one)...these things include food, gasoline, utility bills, medical bills and so on. I now ask myself, do you "really" need it? If the answer is no, then I no longer buy it.
As far as credit cards, no, banks do not hand them out like candy any longer...Dah! The banks are hurting as well.
Black Friday, will be a sight to see as there will be better deals to buy and retailers will want to rid there stock rooms of this years and part of last years inventory but nobody will be able to spend like years past, not even like last year. Hey! They are losing their homes and vehicles not worrying about an HDTV!
Watch Black Friday be the worst recorded sales in the last ten years and you will see tons of retailers scurrying to make even better deal After Black Friday before year of end. So, if you are a Holiday Shopper, hold off and you will get better bargains on the things your loved so desire.
Reply