November 27, 2015. Retrieved online December 14, 2015 from Susie Ouderkirk, Las Cruces Bulletin
[Excerpts below reprinted with permission: Read the complete Las Cruces Bulletin article]
Black Friday has an ominous sound. Images of a black-clad reaper or, worse yet, Santa’s evil counterpart Krampus, might come to mind. But the Friday after Thanksgiving, known as the biggest shopping day of the year, is really all about the green.
There’s no doubt this big shopping day has an impact on a business’s profit, but can it really change the ink in ledger books from red to black?
“Yes,” said Dr. Christopher Erickson, a professor of Economics and International Business at New Mexico State University and senior economic analyst at Arrowhead Center. “It’s not so much that Black Friday is important, but rather that the Christmas season is important.”
Furthermore, Erickson said, it’s not that the consumer is spending more in total but about where the spending occurs. What is worthwhile for the individual merchant is wasteful for retailing generally and actually reduces profits. If everyone participates in Black Friday, and they do, the consumer spends their money where they would have anyway, but it concentrates Christmas into a short period.
“It’s sort of like an arms race,” he said. “If everyone agrees to disarm, everyone is better off. But the incentive is to cheat so as to get an advantage over the competitor. Realizing this, everyone cheats and we get Black Friday.”
Surprisingly, last year Black Friday came up about 10 percent short in profits for the majority of businesses nationally. According to Erickson, “While Black Friday came up short, overall Christmas sales were up 3 percent for the season. People decided not to participate in the hassle of Black Friday, yet still spent. In fact, there is little relationship between sales on Black Friday and overall Christmas sales. Factors like weather and the overall economy are more important.”
Businesses that benefit the most from Black Friday are discount stores like Walmart and Target, department stores like JC Penneys and Sears and mall and clothing specialty retailers.
“This is true nationally and in Las Cruces,” said Bruce Huhmann, associate professor of marketing at New Mexico State University.
Huhmann speculates that sales for New Mexico retailers will be flat.
Black Friday origins
To get a grip on what’s real and what’s imaginary about Black Friday, we must backtrack through history. Abraham Lincoln made Thanksgiving an official holiday during the Civil War, establishing it on the final Thursday of November. This designation, according to the Money Crashers website (http://www.moneycrashers.com/) lasted for 70 years.
“But in 1939, for the second time in six years, the last Thursday in November fell on the 30th. Distraught over a shorter Christmas shopping season, retailers approached President Franklin D. Roosevelt and asked him to change the date,” writes Miranda Marquit, the financial journalist and money expert behind PlantingMoneySeeds.com.
Black Friday’s name
Contrary to one of the popular beliefs about the origin of the name Black Friday, it didn’t come about as the day that businesses went from being “in the red” to “in the black.”
Marquit said that media reports from 1966 reveal that police officers in Philadelphia first referred to the day after Thanksgiving as ‘Black Friday’ because of the increased traffic jams and large amounts of pedestrian traffic in the city’s shopping district. For Philadelphia police, bus drivers, cab drivers, and others who tried to control and navigate the shopping hordes, the day was bleak – and, therefore, ‘black.’”
Hunting and gathering
But why are people so driven to face unruly, sometimes even dangerous, crowds to spend money on the fourth Friday of every November? According to Stephanie Pappas, author and contributor at Livescience.com, “The limited-time-only nature of Black Friday triggers an innate fear of scarcity that drives people to buy, buy, buy.”
Shopping is often compared to hunting or gathering, and for good reason, said Gad Saad, a professor of marketing at Concordia University in Montreal. An article on the Moneycrasher website states that Saad found evidence that men and women navigate shopping situations in ways consistent with the hunting and gathering behaviors of our savannah ancestors. “Seen in that light, holiday sales could be playing on innate mechanisms like the desire to hoard resources,” Saad said.
What is Cyber Monday?
Don’t have the wherewithal to face the crowds on Black Friday? There’s a solution for that, too. “Cyber Monday is becoming a bigger deal,” Marquit said. The first Monday after the Thanksgiving holiday is now known as Cyber Monday and is famous for mass online shopping.
Huhmann said, “The more a consumer dislikes crowds and noise, the less likely that Black Friday deals will be worth fighting their way through the mall or the store. These consumers will likely not take part in Black Friday.”
Whether you enjoy the competitive horse race of Black Friday, take pride in spending your money locally on Buy-Local Saturday, or stay warm in front of your computer on Cyber Monday, the bottom line is that the holiday season has a stranglehold on American buyers and that’s not going to change anytime soon. More information about Black Friday, Buy-Local Saturday and Cyber Monday can be found at PlantingMoney-Seeds.com and www.moneycrashers.com/black-friday-history/.