Black Friday - Part Two

Black Friday is so named because the sales from that day, the day after Thanksgiving, historically represent the point at which retailers begin to turn a profit for the year. They move from being in the "red", or below the break-even line, to being in the "black", the territory of net profits. Presumably, the masses of shoppers trying to get a jump on Christmas on that day, in large measure, are responsible for that shift from red to black.

My question is this: if Black Friday is such a great day for retailers, why not make some wholesale changes to the entire event in order to generate even greater amounts of revenue.

The problems, as I see them:

1. Crowds - Black Friday draws every type of person out into the world. People that can't drive or park. People that lack basic consideration for others. People that can't see well or count. People that can't write a check in less than five minutes. I'm not saying anyone should be prohibited from shopping, but the environment created by Black Friday brings too many people into too small a space. The finest military marching band would have difficulty getting each member to navigate the scene effectively.
2. Small Window - Many retailers run their "doorbusters" only for a few hours very early on Black Friday. I didn't count, but I'm sure there were at least 40 ads in the paper on Thursday. Retailers are competing for dollars, but by asking everyone to be in so many different places at the same time, they are harming themselves. They force consumers to make an exclusive choice. Many stores have checkout lines of 30 minutes or longer. That wait eats up the time when those shoppers could be out shopping at other stores. They are cannibalising each other by monopolizing customers.
3. Limited Inventory - How can a store ask tens of thousands of people to come buy products at their store and then only have a few items in stock to meet that demand? We'll hear in the news about a difficult holiday shopping season with lower-than-expected sales. I walked away empty handed from at least four stores on Black Friday simply because they didn't have what I went in for. I didn't have time to poke around for alternatives because I had to get to my next store before they were sold out. 

I see it all like a hydroelectric dam. There is a certain volume of water that the dam can handle. That volume of water has value in the potential energy it can generate. We want them to run as efficiently as possible in order to generate the greatest amount of electricity at the least possible cost. When there is too much water behind the dam, it spills over and is wasted. When there are too many people in too little area, trying to buy too few products at too many stores, that is like water spilling over the dam. Capacity is exceeded. Opportunity is wasted. Inefficiency prevails.

Anyone can see the Black Friday ads from practically any major chain several weeks before the big day. Web sites like bfads.com and blackfriday.info distribute the information in several formats and provide a forum for the public to discuss the deals. Reasonably so, most of the deals are in-store only, i.e. not available online. Retailers want customers in their stores so that we can buy other things while we are there.

Some ideas for a better customer experience and an even better holiday haul for retailers:

1. Allow consumers to pre-order products that they will want to buy on Black Friday. Retailers could then plan their inventories accordingly and hopefully have enough on hand to meet demand. 
2. Extend Black Friday into "Black Weekend" or "Black 10 Days After Thanksgiving". How many of us stay home on Black Friday just to avoid the madness? Most of us. Were it not so strenuous, how many of us would like to partake in the bounty of great deals that abound? Again, most of us. If we're sitting at home, retailers have a 0% chance of selling us anything on Black Friday. If we're in their store to buy their loss-leader, there's a fair chance we'll buy other stuff, too. Therefore, it makes sense to do whatever it takes to get people in the door.
3. If a store has parking for 500 cars but can only serve 200 per hour in the checkout lines, that's not good. Long checkout lines are bad for business. Some economists will argue that if the store check stands are operating at capacity and there is a long, steady stream of customers, that is ideal because the store is selling everything it possibly can. I would counter that there is a downside. Water over the spillway. In each of the stores I went to I had other items in my cart that I had picked up during my search for the item on my list. My thinking was, "If I have to stand in line anyway I may as well make it worth my time." However, in each case where the item I wanted was not available, I ditched my cart along with its contents and headed straight for the exit. There were A TON of abandoned shopping carts in all of the stores I visited. To me, that represents lost revenue. Those customers have left for one reason or another (e.g. did not find what they were looking for, too crowded, lines too long) and are not coming back.

Retailers obviously want demand to be as high as possible in order to generate as much income as possible. There is natural high demand on Black Friday and during this time of the year in general. The basics of supply and demand dictate that the solution lies in increasing supply to meet demand. Pre-ordering will help retailers plan their inventories more appropriately. Extending Black Friday over several days would allow more customers to get into the stores. It would also spread the customer volume out over a longer period which will reduce the peak pressure overall and help retailers serve a larger percentage of customers.

A monsoon versus constant rain. You can plan for the rain. Not much you can do about the monsoon except to find some cover and wait it out.

Black Friday - Part One

I browsed through the advertisements from the Thanksgiving day newspaper last night after everyone had gone home from our family gathering. We didn't "need" anything, but I hate to miss out on a good deal for something I can or will eventually use. We are still looking for a couple of Christmas presents for the kids, and I found a few things in the ads to get for them. With Madison and Brookie having spent the night at Grandma's, Karsten and I ventured out to brave the throngs of bargain hunters. 

Naturally, there was not one single store that would meet all of my needs. In fact, of the eight items on my list, no two items were from the same store. 

1. Sears was our first stop. False advertising. The item did not exist at that location.
   
2. Second stop, Walmart. False advertising. The item did not exist at that location. No empty shelf. SKU not on file.
   
3. Third stop, BestBuy. Sold out.
   
4. Fourth stop, Home Depot. Success!
   
5. Fifth stop, OfficeMax. Two in a row! Unfortunately, that was not for a present. Just replacing our worn out shredder.
   
6. Sixth, Toy-R-Us. I was a fool. Even IF they'd had the item in stock, the customer relations of Toys-R-Us is so poor - with their checkout line that stretches around the perimeter of the store, clerks that cannot answer simple questions, trashed product packaging and general clutter, barriers made out of products that prevent shoppers from walking where they want to, and so on, and so on - I knew I was setting myself up for disappointment from the get-go. I won't even mention the parking lot or some of the rabble they tend to attract.
   
7. Next was Coastal Farm to stock up on cat food. In store? No problems. Parking at OCSC? 20 minutes. I ended up parking at the opposite end of the shopping center in front of Rite Aid.
   
8. We also needed to pick up a new pacifier tether for Karsten. He's worn out his third one already. Rite Aid doesn't stock any. Fred Meyer doesn't carry the type that work with pacifiers made on our planet. Kmart was sold out. No tether for Karsten.
9. Last stop, Chevron. No lines. Good prices. Good service. Ahhhhh.
   

With little to show for our effort, Karsten and I made our way home to where our Thanksgiving leftovers needed attention.