Black Friday is a tag phrase attached to what has been for decades the biggest shopping day of the year – the day after Thanksgiving. In the last years, several Black Friday marketing strategies and tactics have been applied to boost this sales season.
Some claim the push to drive up sales on the day after Thanksgiving goes back to the late 19th century.
Retailers are so dependent on revenues from this day in the early 1930’s they petitioned President Franklin D. Roosevelt to move up the holiday to add an extra week of sales, and he obliged.
What is a bit odd about the history of Black Friday is how the word “black” became associated with the aspects of this holiday shopping.
Where does the name come from?
Throughout history, “black” days have been bad days, with the stock market crashes of 1929 referred to as beginning on Black Tuesday and then accelerating on Black Thursday. The crash of 1987 got tagged as Black Monday.
There are a host of exciting stories about Black Friday, with some being the stuff of “urban legend” while others appear to have some factual basis.
By far the wildest interpretation of the history of Black Friday traces the term back to the days of slave trading when auctioneers offered discounts at slave auctions held on the day after Thanksgiving. This one got a lot of internet hype but appeared to have no historical accuracy at all.
Another explanation that may have at least some basis was the use of the term Black Friday to describe the phenomenon of employees calling in sick on the day after Thanksgiving. They were trying to stretch the one day holiday into a four day weekend.
Today, to give employees the day after Thanksgiving off has become a common practice. The most credible explanations for the history of Black Friday originated in Philadelphia.
The Urban Legend of the Philadelphia Police Department
It seems the Philadelphia police department, struggling to handle the crowds and the traffic jams on the day after Thanksgiving, began to refer to the day as Black Friday.
To add to the mystery, the storied Army-Navy football game was played in Philadelphia, on the Saturday after Thanksgiving, flooding the town with new arrival football fanatics from out of town.
Some trace the first usage of the term Black Friday to the 1950’s Philadelphia police. However, the history of Black Friday in print began in 1966 when a Philadelphia stamp shop used the term Black Friday in an ad appearing in a stamp magazine, the American Philatelist. This is reportedly how the advertisement read:
Black Friday’ is the name that the Philadelphia Police Department gave to the Friday following Thanksgiving Day.
Although employees in Philadelphia retail stores were supposedly using the term Black Friday in the early 1970s, it wasn’t till the 1980’s that the name caught on nationally.
Black Ink Instead Of Red Ink?
Historically, accountants used black ink to enter positive items in daily ledger books – like revenue received from a supplier paying a bill – and red ink to register negative numbers – such as payment of salaries.
The convention of using black and red to differentiate incoming revenues from outgoing revenue persists to this day in most accounting software programs. Flash forward in the history of Black Friday, and we have the retailers’ redefining the term to their advantage.
Now Black Friday represents the day most retailers turn profitable or begin the process of going profitable by year-end. In effect, this means the retailers have “gone black.”
Many retailers believe they are so dependent on Black Friday sales that they are now opening their doors on Thanksgiving Day, rather than opening in the wee hours of the morning as they all did a few years ago.
At their core, Black Friday marketing strategies employ two time-honored methods for increasing sales – discounting and volume.
Black Friday Marketing Strategies
The Friday after Thanksgiving had evolved to the point the “day” had become a “season” when companies’ marketing strategies were able to create the busiest shopping day of the year.
Before the public acceptance of the term, Black Friday and the visions of big bargains dancing like sugar plums in the minds of shoppers, the busiest day of the year was typically the Saturday before Christmas.
Exclusive and Limited Time Deal
What appears to have happened was the linking of the discounting strategy with the emergence of Black Friday itself, like a kind of brand. Retailers pushed the notion that the deals, to be had on Black Friday, were once a year bargains and never to be seen again.
One has to wonder how these retailers make money with discounts that range from 20% to 70% and more. Discounting as a viable marketing or sales strategy traces its roots eons ago to some unknown seller in open-air markets of the time, who discovered you could sell more if you sold for less.
What’s more, the customer had to be convinced they were getting great bargains. The profitability of discounting depends on the volume of goods sold.
High Volume instead of high margin
Retailers correctly calculated that if average sales of a given item could be significantly increased, the discounting would result in effect pay for itself. As an example, consider the retailer selling a big-screen HDTV for $1,000, with average sales of two per day. With the cost of goods sold at $500, the retailer is earning $1,000 per day. Discounting the HDTV to $600 cuts the profit margin to $100, so the volume would need to increase to 10 for the day to achieve the same profit.
The trick is to get enough customers into the store to get those ten sales. The myriad of Black Friday marketing strategies we see today all have that same goal – increasing the number of customers.
In the early years of this century, strategies included massive ad campaigns touting the deals.
To maximize the excitement, exclusive deals were offered as “doorbuster,” available only for a few hours following the store openings. Besides, stores were filled with bins packed with unadvertised merchandise at the low end of the pricing structure, including things like gloves, hats, tools, toys, and housewares.
Black Friday has been so successful to date that some retailers have this low-end merchandise produced just for the Black Friday sale. The margins on these goods are typically very high.
The explosion in Internet use allowed major retailers to preview their Black Friday specials early, all designed to heighten the excitement to consumers eager to grab those once in a lifetime deals. Then the early openings began.
Major retailers like Walmart, Target, Macy’s, and Best Buy began opening their doors earlier and earlier; in 2009, Walmart was opening at midnight on Thanksgiving.
By 2011 Target, Kohl’s, Best Buy and others had joined in with midnight openings. In 2011 Walmart and a few others announced their doors would open at 8 PM on Thanksgiving Day.
By 2014 opening times fell to as early as 5:00 PM at Best Buy; with others opening at 6:00.
The idea was simple. Early openings mean more customers are coming in the doors. Amazon.com got in on the act and Cyber Monday was born.
Big retailers now have major online sites, so they quickly jumped on board.
The Internet has allowed retailers to expand not only the time discounts are available, but also the place where consumers go to get them. The strategy of increasing the time available to get deals has led retailers to start dealing earlier than the Thanksgiving weekend.
Pre-Black Friday and Cyber Monday
Best Buy, Walmart, Amazon.com, and others now are offering “pre-Black Friday” events. Walmart has announced its Cyber Monday offerings will soon be available on Sunday at 8:00 PM, ushering in a new term – Cyber Sunday.
Have these multiple Black Friday marketing strategies worked? Data shoes that definitely yes. Although Thanksgiving and Black Friday traffic is declining, online sales are increasing faster and sustaining the period growth.
Violent incidents have marred the history of Black Friday as crazed shoppers scramble to grab opening deals marked as “doorbusters.”
The Thanksgiving openings have led to some stock analysts of the retail sector now using the term “Black Thanksgiving.” However, there appears to be at least anecdotal evidence that the crushing crowds on Friday have eased a bit, due perhaps to the Thanksgiving openings but also to the rise of online shopping.
Given the crucial importance of holiday sales to the nation’s retailers, it is likely we will always have Black Friday in one form or another.