Nathan Moran
Mrs. Straub
AP Economics
November 8, 2015
Black Friday
Every fourth Thursday in November, Thanksgiving Day comes around, and with that it brings Black Friday. A night dedicated to the avid spender and money saver, depending on who is shopping. Prices are cut, deals are made and money is “saved”. Though there are price drops this doesn’t always mean money is actually being saved. Some people actually do have a plan to buy something for their families or themselves that is truly needed. In other cases, it is just an excuse to open up the wallet or purse and buy unneeded but desired and luxurious objects. Whatever the situation is Black Friday is a huge spending day for consumers and has much to do with economics.
Last year total revenue for Black Friday was about 51 billion dollars. This may seem very high but it’s down almost $7 billion, which is a drop of about 11 percent (Tabuchi). A discussion over why this is was started. Some, like Tabuchi, thought that people were growing tired of Black Friday, meaning the demand for shopping has gone down. 
Others argue that the prices are being cut down so much that it lowers the total revenue. Stores try to offer the best deals so that the shoppers choose to buy from their store instead of others. Competition has lead to severe price drops which could have possibly lowered the total revenue. This is also not good for stores because as the prices of items lower, so can the profit. There is a trade-off between sales and prices to maximize the profit and stores are continuously thinking of ways to do so.
Two predictions for this Black Friday are price matching will become a larger thing and UHD tvs will be cheaper and a hot sell (Wilcox). Whether these predictions come true or not and to what effect on Black Friday they will have will be interesting to see. Being a hot sell could bring total revenue up, or being priced so low could again drop the percentage of sales. Black Friday will still be a huge hit once again but to what extent is only to be seen.
Works Cited
"Sam's Club Black Friday 2015 Ad Page 1." Black Friday 2015. 2015 BlackFriday.com. Web. 9 Nov. 2015.
Tabuchi, Hiroko. "Black Friday Fatigue? Thanksgiving Weekend Sales Slide 11 Percent." The New York Times. 2015 The New York Times Company, 30 Nov. 2014. Web. 9 Nov. 2015.
Wilcox, James. "5 Predictions for Black Friday 2015." Consumer Reports. 2015 Consumer Reports, 9 Oct. 2015. Web. 9 Nov. 2015.
You provided some very interesting statistics on overall black Friday sales. I would have thought that overall sales were increasing but they are clearly not. Although I think the sales are hurting businesses, I think it is only minor. I believe that the major black Friday companies use to make far too much money and that this decrease in overall sales is more appropriate. This is also obviously beneficial to the customers: more so than the negative effect on the suppliers.
ReplyDeleteI was actually not surprised to hear that black Friday sales were decreasing mainly because people say that cyber Monday actually offers better deals. It would be interesting to compare current black Friday statistics to cyber Monday statistics. I think now, and in the next few years cyber Monday is really going to take over because as technology usage continues to increase, it makes shopping so much easier and convenient. There is no need to wait in the long black Friday lines when you can just click around on the internet and come up with your order and pay within just a few minutes.
ReplyDeleteReading this article raised a lot of good points in my mind. Sometimes, people buy things just because they are on sale or because it is a good deal, however, they don't actually need the item. In this situation, the buyer is actually losing money, instead of saving money. The best way for them to save their money would be to not even go out to the stores. I wonder how much the "Black Friday hype" effects buyers decisions to (or not to) purchase items on that day.
ReplyDeleteI thought this post was rather funny! Your perfectly right when you say, " Prices are cut, deals are made and money is “saved”. Though there are price drops this doesn’t always mean money is actually being saved." I don't understand why companies say this? There is no money being saved intact an individual is just losing money. I think it would have been cool if you talked about if someone has tried to stop the advertising phrase "Saving money" not that I don't think companies can say that, just would be a curious thought. -Tyler Hull 11/13/15
ReplyDeleteGreat job on your article Nathan, this is a very relevant post considering Thanksgiving is coming up and from there, Black Friday! One thing about your article that stood out to me was when you mentioned the decrease in sales on black friday by $7 billion dollars. In the last few years I've noticed that black friday sales have been starting earlier throughout the week. So instead of just having the sale on that Friday it would be that entire week and weekend. Businesses have started doing this to try to gain a competitive advantage against other businesses, so I'm wondering if this has led to a decrease in sales on that actual Black Friday day, because sales have been satisfying consumers throughout the week and not just that day. That would be a significant reason as to why total revenue is decreasing. I'm interested to see what will happen this year and to see the different strategies of the businesses and how they will gain that competitive advantage as no one in this situation will be able to have the absolute advantage. Good job!
ReplyDeleteI am very surprised with the fact that the total revenue was down. This is shocking to me because it seems every year more and more people go out shopping. A few years ago, I remember that stores didn't even open until Black Friday, but now most stores are opening up on Thanksgiving night, showing how it is growing in popularity. The stores that are opening up on Thanksgiving night seem to only care about gaining as much revenue as they can. As much as I do love to go Black Friday shopping, I do not think the stores should care so much about revenue that they open on Thanksgiving night. Thanksgiving is a holiday that is supposed to be celebrated with your family and recently some families have been choosing to shop instead of spending time with their family. Overall I think that was very well written, as well as a very surprising topic.
ReplyDeleteI think that the total revenue is down for Black Friday because more people can do online shopping. I don't think people like shopping on Thanksgiving because they don't agree that companies make their workers work that day and are unable to spend the holiday with their families making it less attractive to customers.
ReplyDeleteMost people are starting to do online shopping for black Friday and are saving a lot more money in some cases. Plus there are a lot of people that can and get hurt during black Friday, people like to fight over lower prices. Black Friday is the one day of the year people turn in to complete animals.
ReplyDeleteWhat do you know, Black Friday is almost here again! This means TONS of people will be shopping online and going to retail stores to "save" tons of money. As a multi-business owner, I find it crazy how the demand in products goes up so fast as soon as the price drops. In some cases the prices do drop a large percent, though this isn't always the case for all items. In addition, I will also agree with a couple of the comments above that Black Friday shopping is becoming more popular online (note: read my blog post to learn more). I don't plan customers to transferring online for Black Friday deals, because there has been people killed at retail stores filled with crazy customers. Anyways, nice blog post and I'm interested to see how the holiday sales will be this year to rap up 2015.
ReplyDeleteI am very surprised that Black Friday spending has gone down 11% from the previous year. I do not know why there is a big difference between the two years? Was there just a higher demand for a product the year before? Was there a new product that came out around that Black Friday? I do not know but it would be cool to find out! I do agree that buying gifts online has become a trending habit in the past few years. I wonder how much Black Friday online receives compared to Cyber Monday? I also agree that a lot of the things purchased on Black Friday are just wants not really necessities.
ReplyDelete