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Black Friday: Why Does It Exist?

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Has everyone gotten back from the Black Friday sales? I got back from my Black Friday foray a little earlier today. I would have written before now, but I had a little left-over chicken (we opted for chicken rather turkey this year - it's just a better size for two) and dozed back to sleep.

A couple of years ago, I decided that I was done with Black Friday. I don't think I went out last year. This year, I decided that it would be worth giving it another shot - on one big condition. I would avoid the big box electric shops (Best Buy, Circuit City) and instead look for something like CVS or Walgreens. My theory: not many people are going to waiting out in line at these places and there are enough of them to thin out the hordes. My choice this year was an out-of-the-way Kmart. It's not quite CVS, but it's not Best Buy. They had a couple of perfect gifts for Energy Gal and there's one 5 minutes from my home.

I showed up around 5:35AM, 25 minutes before it opened. To my surprise there was already a line, around 30 people long. So much for betting everyone to focus on the other stores. Over the next 25 minutes, I played Bejeweled on my Palm Treo. (I may have clocked more hours playing Bejeweled in my time than anyone.) I couldn't help but think, maybe I should be home using this time to work on the long overdue Lazy Man Gift Guide? Wouldn't I make more money from ads in that than the money I'd save here in line? It's probably a close call. In fact wouldn't almost anyone in this line be better off working an extra hour or two instead fighting the masses for a couple of hours on Black Friday? I'm surprised the woman in front of me didn't figure that out since she was so proud of herself for figuring out that her Starbucks habit costs her $1500 a year. Here I thought that everyone knew that... I guess I just live in a different world than some others.

This thought of working an extra hour and skipping Black Friday got me really thinking, "Why does Black Friday exist?" It just doesn't make sense to me.

The Consumer Perspective:

  • Wasted Time Equals Wasted Money - Is this really the best use of time? I'm sure for some it's not bad. The person in front of me this year said that she spent 24 hours waiting in front of Best Buy last year and didn't get there early enough to get the voucher for the item she wanted. That's just craziness to me.
  • Lack of Sleep - Hey sleeping is good. I know a lot of people who love to sleep in when they get the chance. I don't understand how that changes when you tell them to wake up at 5AM for a chance at saving a couple of bucks. If people are concerned about their wallet, that's fine - but there are a lot easier ways to save money.
  • Fighting - The news always shows everyone fighting for the initial rush. Someone always gets hurt. I don't want spend two hours waiting and then have it go to waste by a stampede of people. I don't want to be part of that stampede.

The Retail Store Perspective:

  • Higher Costs of Doing Business - Retail stores have to pay employees more to be their earlier in the morning. They have to set up all the sale items. And when customers trash the place (quite literally), it's going to cost the stores more payroll dollars in cleaning it up.
  • Selling Items at a Loss - They sell the doorbuster items at prices that I can't possibly make them a profit. Perhaps it's to get people in the door so that they'll buy other higher margin items, but does that happen on Black Friday? There's simply too much commotion. Everyone wants to get out of there as quick as possible.
  • Cannibalizing the Own Profits - Pretend that I want to get my wife a digital picture frame for Christmas. There were some deals on them for $50 (one I even saw for $20). If I didn't catch a Black Friday deal, I would have had to pay $79 - that's more money in the store's pockets.

I must be missing something here. Perhaps it is somehow a winning proposition for stores - I just don't buy it. It seems like it's mostly frustrating for consumers. It just feels like we should have evolved to solution that at least is a win for one side instead of this lose-lose situation.

P.S. For those interested, I did get my doorbuster items. They had decided to put one them on a shelf that required a ladder to get to - pretty unusual for highly advertised items that are smaller than a breadbox. No one else managed to find them (and I wouldn't have without help). The other item had about 80 of them even I spent a half hour for the first one. I probably could have shown up pretty late and got both items.

Last updated on November 29, 2008.

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14 Responses to “Black Friday: Why Does It Exist?”

  1. tiffanie says:

    seems to have been a slow year for Black Friday. I work retail…had to be there at 3am to help setup and get everything out, sale started at 5…and we were DEAD. was supposed to work til 11:30a, but got sent home by 6:45a. There was no mad rush, no fighting, nothing. We ended up with a ton of Nintendo Wii’s that DIDN’T sell (we’re talking, like, 70 out of the 90 we got shipped). That’s amazing to me. I dunno. Bad year. *shrug*

  2. Ryuko says:

    Had a decent rush in a few places around here this year. I’ve been shopping Black Fridays for the last few years, and I think I can help a bit on your perspective.

    First, I left early, but not incredibly early. I’ve found it’s not even worth waiting in lines. There may be some awesome doorbuster sales that I missed, but I’d probably miss them anyway unless I showed up @ midnight and camped out. I’m not that insane, and the prices are probably not low enough to be worthwhile. However, MOST of the really good sale items will be there until at least noon.
    I got into the Pearl Harbor NEX @ 5am. They opened at 4am, and people were still streaming in from the incredibly long line (probably 2-3 blocks), but I just waltzed right in. It was wall-to-wall crowded, and it took me 30 minutes to walk to the electronics section, grab the blu-ray player that was on sale (and a couple other items), and check out. Minimal lineage. The mall was the same way (I didn’t even try Wal-Mart this year b/c I heard there were fights breaking out)

    Second, my conclusion is that stores HAVE to have Black Friday. Why? Because everyone else does. At the mall, every store that is having BF Sales was packed; the rest were dead. I think it started with people over the last few decades trying to out-beat the competition with a sale that much earlier before Christmas, to keep the buying streak going longer. It’s actually starting to evolve into big sales before Thanksgiving now, which is just ridiculous. 10 years from now, you’ll think of “Christmas In July” in a whole new meaning — Black Friday will become the Day After Independance Day.

  3. Lazy Man says:

    I don’t believe that people should be allowed to walk right in if people are still in the line.

    I think you might have hit the right place (having been at the Pearl Harbor NEX, I can see what you are saying), but you usually can’t hope to walk into Best Buy any more than 8 minutes after it opens and get anything.

    I understand the idea of having it because everyone else does, but I think some companies could take a stance and say, “There’s no need for us to lose money on this day” (again if my hypothesis is right and they are really losing money. Yes, they’d take a revenue hit, but their profits would appear to be better.

  4. Miss M says:

    I didn’t get up early but we did hit a few stores between 10 and noon. We were too late for the sales at some stores so we passed them by. I was shopping for items to make gift baskets, not buying any high end items this year. We drove by the new mall in Glendale, Americana, and it looked pretty empty. I didn’t see any big crowds.

  5. Ryuko says:

    Yeah, it’s really all about what place is worth going to. i.e., I tried the local Best Buy, but at about 6:00, there was still a line and parking was 3 blocks away so I drove off ;). CompUSA didn’t have Black Friday madness, though.

    As for the line, well… they had MA’s enforcing and to avert rushes, and they didn’t stop me so… The moral: Yeah, it may have been a little rude, but that’s what you get for being stupid and getting in line at 3am. Either do it at 11pm the night before like the hardcore freaks, or come in after the doors open like the sane people! Either way, it was worth it cuz I got a good brand-name blu-ray player for real cheap.

  6. John says:

    I didn’t shop at the mall, as I why fight the crowds when the best way to save this holiday is using online comparison shopping sites, & also online discount codes. Retailers have discount codes you key in to save money.
    Do you have any sites for other discounts/codes?
    Thanks

  7. Lazy Man says:

    Yep, glad you asked John. Give a look to Retail Me Not.

  8. One of the big reasons for Black Friday is psychology: The earlier you get consumers to start spending, or even shopping, the more they spend over the season.

    Even many of those who stay home to avoid the crowds still start thinking of it as “time to shop” when they see the frenzy.

    Me, I never buy anything on Black Friday, but sometimes I like to go to the mall just because it’s so bustling. (Although I’d rather go by bus, because you can’t park anywhere.) That’s actually one of my frugal tips: shopping and buying are two separate activities.

    As for not shopping at the big box stores: I become political when times are tough. I try to buy local, or at least from companies I want to support. (I treat each purchase as a donation to the economy — what part of the economy do I want to support?) Sometimes that’s not frugal, but I figure it’s pound-foolish to support companies that drain the economy.

  9. kosmo says:

    Dude. A series of The Office for $14. How is this a bad thing? :)

    We got to the mall at 9 on friday. It’s one of the largest malls in the state (granted, the state is Iowa) and it was crowded, but not insane. Certainly, we missed some 4 AM sales – but since I get up at 5:15 on work days, there is no way I’m going to get up that early to shop on a day off.

    We went to another mall today about 30 miles away, as well as the Toys-R-Us there (we have a one year old). The mall is one of two malls in the town … and is having serious problems. If it wasn’t for massive flooding this summer which forced county/city offices (and FEMA, SBA, etc) to relocate that mall, very little of the retail space would be occupied (it’s an ill wind that blows no good, I guess). There is a rumor that another anchor may be leaving in a year … if it does, the mall is likely going to end up as office space. It’s black Saturday, and the place was basically a ghost town.

    The Toys-R-Us wasn’t particularly busy, either (I don’t think we had to wait in line at all – definitely not more than a few minutes) – but a neighbor who was there yesterday waited 90 minutes in line. erg.

    btw, some line psychology to allow you to pick short lines:

    – Line 13 is often shorter than the others. I’m not saying that everyone avoids it, but some people do.

    – Single men get checked out very fast. Married people and single woman seem to take longer – keeping kids from going wild is part of it, but they also seem more likely to complain about a price. Single guys just seem to be more willing to shrug off a $1 overcharge to get out the door. Maybe I’m wrong about this – it’s not as if I have done a big research study on the topic.

    – Try to figure out how many purchasers are in line. There might be 6 guys in a line, but maybe one guy has a small basket, and the rest are just tagging along. Thus, longer lines can sometimes result in shorter waiting times.

  10. Slacker says:

    I agree with many of your points but I’m still thinking that the retailers did the math and determined that it was worth their effort, and consumers decided that it was worth their time. After all, time is money but if the time was going to be wasted anyway eating leftovers and sleeping, then getting a good deal sounds like savings to me.

    On the flipside, their are way easier ways to get deals. I have a method for getting electronics cheap which isn’t particularly clever, but I’ve found that most people still don’t effectively navigate sites like Ebay to get the best deals.

    STEM rule.
    http://www.theslackermethod.com/?p=50

  11. Neko says:

    I think that the true reason Black Friday exist is for Retailers to dump the year’s modeled products off on consumers in order to allow room for next years models. Since most Retailers operate on almost a ‘Just In Time Inventory’ schedule, they probably are getting great deals from thier suppliers. I don’t think that Retailers are taking as big of a hit as you may think by marking thier products down. If anything, the manufacturer is taking a hit to unload that year’s soon to be outdated products.

    On an interesting note, did you know that in 1939 Franklin D. Roosevelt changed Thanksgiving Day to the Thursday before last (instead of the last Thursday as set by Abraham Lincoln in 1863) of November to extend the Christmas shopping season in hope of stimulating the economy?

  12. jim says:

    Interesting trivia note Neko…

    I think Black Friday is another one of those marketing gimmicks that works only because things are deeply discounted. I haven’t done the BF thing in years because you can often get just as good deals later on. Sure, you won’t get one of the two digital cameras at deep discount but if you’re sleeping but if you roll up to a store that’s already 100 deep, you probably won’t get it either.

  13. Jim says:

    The time and lack of sleep must be worth it to people. Only a minority of people get up super early and I would hope they’re getting good deals to make it worthwhile. Plus you gotta do the shopping sometime. I think for a lot of people they simply ENJOY the experience. My wife had fun. If you don’t enjoy shopping to begin with then black friday should probably be avoided.

    Fighting isn’t bad here and I’ve never seen anyone so much as shove someone else.

    I definitely agree that avoiding the biggest and busiest stores is a good strategy. We hit a few stores and specifically avoided Best Buy knowing the line there would be insane. Office Depot and Office Max weren’t bad. We got to the stores at 6am and didn’t stand in lines. We got 2 of the key things we wanted and then just did some general shopping otherwise.

    I’m SURE that the extra cost and effort for the stores is very worth while. Black Friday is one of their top 10 shopping days and can be the biggest day. Thats certainly worth paying people for a few more hours work since those hours are jam packed full of business. If the stores were empty then the cost of wages wouldn’t make sense, but when the store is packed full then thats the best time to be open extra hours.

    Most stores have some loss leaders. But most of the sales are not for those deep discount items. Plus most items during Christmas season seem to be on sale most of the time anyway.

    Jim

  14. CreditShout says:

    I’ve always been mystified by Black Friday. I guess I just never really understood it..people flock to stores at 4am to get “great deals” and to be honest it seems like there is a perceived value that isn’t really there. You really don’t end up saving much if not any money and you have to deal with huge crowds and long lines – no thanks.

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