With the rise of the Internet and e-commerce, many U.S. retailers have found that Black Friday, the traditional shopping day, is not as crazy as it used to be. Retailers have been touting specials for weeks. As more and more shopping moves online, it’s getting easier to compare prices, so the temptation to snap up specials is losing its appeal to shoppers.
It’s a real blow to U.S. department stores, which have long relied on shopping festivals to drive themselves to “turn a profit” or turn a profit.
“Historically, (department stores) were the most influential retailers in the 1970s and 1980s,” Sucharita Kodali, a retail analyst at Forrester Research, said in an interview. At that time, many of these sales became very popular. ”
She says department stores rely more on winning customers on Black Friday than other types of retailers. In addition to taking advantage of the Black Five to choose gifts, people also stock up on some of the daily necessities they need.
But now Macy’s, Kohl’s and J.C. Chain stores such as Penney are struggling to attract shoppers to shopping malls. Because these companies find their sales falling. “If the influence of department stores is declining, then Black Friday is especially important to them,” Kodari said.
There are, of course, traditionalist consumers who are still used to going to department stores, and they feel that the holidays would not be complete without a shopping mall trip after a turkey dinner. The shoppers braved the cold to line up, waiting for department stores to open in the early hours of the morning, hoping to buy a lot of discounted kitchen utensils or office supplies. Department stores, in particular, usually offer “open doors” promotions that offer limited prices in a short time after opening the door. But now, with the internet at its fingertips, the appetite for coupons or one-off activity has waned.
Deborah Weinswig, founder and chief executive of Coresight Research, said: “Black Friday is no longer a narrow window of opportunity, leaving shoppers to wait in the cold and rush into stores for unmissable offers. “Now, holiday shopping takes up most of November and starts to warm up in the first two quarters, as holiday shopping is becoming more and more a year-round activity. ”
Some believe holiday shopping began as early as July because of the timing of Amazon’s Golden Day event. But there are many other reasons why Black Friday is no longer what it used to be.
Large companies such as Best Buy, Target and Walmart are quick to offer site-wide deals online, putting pressure on department stores. Amazon began its Black Friday promotions on Friday, while other promotions began even in the fall. In October, Wal-Mart also launched an online holiday promotion “earlier than ever.”
“Competition has reduced the impact (on Black Friday),” Kodari said. “And consumers will benefit.” Some say the chaos of the past on Black Friday will also reduce earnings. Because consumers crowd shopping malls and rob goods, stores have to spend energy to maintain order.
Black Friday in 2018 brought in 6 to 7 percent of total quarterly sales for mall retailers such as American Eagle and hypermarket retailers such as Best Buy, compared with about 1 percent of average shopping day sales, according to 1010data, an analytics intelligence firm. So for some retailers, Black Friday is the equivalent of an extra week of sales. “Black Friday is the peak season for toys and electronics,” Yruma said. “Wal-Mart and Target will have a lot of momentum… There are still consumers looking for offers on this day. ”
Department stores may use Black Friday promotions to end a tough year.
Macy’s, Jesse Penny and Kohl’s reported dismal earnings earlier this month. Macy’s and Kohl’s cut their annual profit forecasts. While Nordstrom’s results beat analysts’ expectations, its sales were down 2.2 per cent from a year earlier.
Kohl’s said rivals have been aggressively preparing for the Black Five to drive sales and expect to continue to do so for the rest of the year. Macy’s expressed the same sentiment, saying it plans to cut prices in the Black Five, even though it said it did not compete in the third quarter.
Cowen and Co. “Given the tough third quarter, retailers should be prepared for a highly promotional holiday environment, particularly for womenswear, mall and department store retailers,” said analyst Oliver Chen. ”
Macy’s, with a market capitalisation of $4.8 billion, is down more than 47 percent so far this year, its worst year since 2008. Kohl’s shares fell more than 27 percent to $7.7 billion. Nordstrom’s share price has fallen about 18 percent in 2019, and its market value has fallen to nearly $6 billion.
Jesse Penny’s shares are up about 13 percent so far this year, back above $1. Penny’s department store, which has a market capitalisation of $37 million, was likely to be delisted by the New York Stock Exchange earlier this year. In December 2018, the company’s share price fell below $1 for the first time.