Janvi Malik
With the last few months of the year rolling to an end, who isn’t looking forward to the holiday season this year? There will be days off of work and school, tables with plates of delicious looking food, and plenty of time to vacation and enjoy time with family and friends. The excitement for Thanksgiving and Christmas can only be compared to the excitement for the seemingly “too good to be true” sales that come with these holidays. Sales on oversized TV’s, expensive high tech gadgets, and flashy branded clothing that people wait year round to buy at reduced, more affordable prices. According to the National Retail Federation, last year “holiday sales represented nearly 20 percent of total retail industry sales.” The increased demand and the price drop on goods makes the holiday season an increasingly larger part of our economy.
The demand for toys, electronics, and other presents skyrockets during the holiday season. With Santa Claus on his way, parents will scramble to check off a handful of things on their children's christmas which list; Nearly every child will be begging their parents for a new and expensive something this holiday season, and many parents will oblige. This need for Christmas presents is a important change in consumer tastes that will shift the demand curve for many goods farther right. More people will want a product at each price point.
Not only are businesses booming from the increase in demand for their products, businesses also gain customers by throwing the biggest sale of the year, Black Friday. This day of famously low prices and good deals. On a graph with both a demand curve and a supply curve, most Black Friday prices would fall well below the equilibrium point. This means that there will be a shortage of goods that will cause even bigger rushes of shoppers at many retail stores. Last year Black Friday drew out 226 million shoppers that spent an average of about $398 spent by each shopper. These sales have also been increasing online sales. As you can see in the chart on the left, sales on cyber monday and black friday are much higher than the amount of sales on a normal day.
The influx of holiday sales will also lead many companies to hire temporary workers to keep up with growing crowds during the holiday season. In November last year, businesses hired over 50,000 new workers. This gives the economy a temporary boost; By employing more people, more people have money to spend, which will benefit businesses across the country.
Many people will be handing presents around a tree this year, as well as throwing grand Thanksgiving and Christmas dinners and parties, making the holiday season not only one of the most wonderful, but also one of the most expensive times of the year for consumers and one of the most profitable times of the year for businesses.
Works Cited
Duncan, Eric. “Topic: U.S. Christmas Season.” Www.statista.com, www.statista.com/topics/991/us-christmas-season/.
Dunn, Jeff. “The Black Friday Shopping Frenzy Is Moving Further Online.” Business Insider, Business Insider, 23 Nov. 2016, www.businessinsider.com/black-friday-online-sales-growth-cyber-monday-chart-2016-11.
“Lines Forming Earlier For Black Friday Deals.” CBS Baltimore, CBS Baltimore, 27 Nov. 2014, baltimore.cbslocal.com/2014/11/27/lines-already-forming-outside-stores-for-thanksgiving-deals/.
Stribling, Richard. “Economic Impact of Holiday Season.” Business Insider, Business Insider, 8 Dec. 2011, www.businessinsider.com/economic-impact-of-holiday-season-2011-12.
hibbardj@nrf.com. “Holiday FAQs.” National Retail Federation, 19 Oct. 2015, nrf.com/resources/consumer-research-and-data/holiday-spending/holiday-headquarters/holiday-faqs.
Luke Lochner
ReplyDeleteDuring the holiday season the prices do drop for many products and consumers will buy, but do they save money? The consumers spend a lot of money on different products on Black Friday, as stated in the text, so they don’t really save a whole lot of money. Yes, you do spend less on a lot of goods in the store but since there is so much on sale at low prices there are products that you buy that you didn’t think of buying before the sale. You do save money on the xbox game you have been waiting for or the new phone you’ve wanted for months but after that purchase you get tempted to buy more than just you were originally going for.
I found this very interesting as me and my family have never been to into black Friday shopping and what not but i can now see why everybody is lined up and rushing to get the best deals because the demand is so high at this time of the year for products because everyone is shopping and if everyone is shopping for the same thing why not offer deals on those things to start even more of a demand which i now realize is super smart.i always thought of black Friday as pointless but when you look at it from an economic standpoint it is good because it is benefiting the buying and seller and makes the holidays a great time for both of them.
ReplyDeleteI agree with the fact that the demand curve will shift to the right due to the fact that more people want a specific product. The people don’t suddenly want the product because it’s better, they want it because it’s cheaper. This is a change in the quantity demanded. Also, I notice that when you talked about the new employees, that helps with the economy and unemployment rates for a short time, if people are seasonal hires.
ReplyDeleteIt really is interesting to see how the black friday effect boost the economy temporarily. I personally buy things on black friday and tend to shop way more during that day due to the reduced prices. I can imagine how much money goes to the government due to the overspending by the consumers. It also does seem like other things contribute to this economy boost. Like the jobs created for example. Businesses will hire more due to the demand of the product being produced by the company during this time. I wonder how much the economy is actually boosted due to this effect. How will the economy strengthen during black friday this year? After all, I feel like people are transitioning to more online shopping rather than actual in store chaos.
ReplyDeleteAlthough it is great that Black Friday and Cyber Monday offer such great deals, consumers often end up spending more money on things they do not need due to the low price. All contributing to companies profits increasing heavily. It is very common to hear about companies such as Target, and Walmart hiring temporary seasonal employees as during the holidays the stores get jammed up due to the intense deals. Although it gives the economy a boost for a short amount of time, it doesn’t have a long lasting effect. When more people are working during the holidays, less government funded money is necessary. But on the other hand, when the holidays are over and the seasonal help is no longer needed, the economy falls right back into normal position. The government is back to funding those who are jobless and needing to provide for themselves and their families.
ReplyDeleteThe holiday season is always exciting, and that alone gives people an incentive to shop for the latest and greatest technology. With businesses printing millions of copies of Black Friday ads and hiring dozens of employees, they are surely expecting a huge holiday rush. It is interesting to think that 1/5 of total retail sales at this time of year is generated by holiday shipping. In fact, one of the largest spending holidays has just past, Halloween! Each year Americans spend close to $7 billion on Halloween for decorations, candy, and parties. Although, that is nothing compared to the average $465 billion spent on Christmas each year. It is not surprising though, people will blow all their months savings when virtually everything goes on sale. In turn, it is good for businesses as they see a boost in their profits, generating more sales than any other time of the year. It must make you wonder, how does the holiday season benefit business? And do employees see an increase in their paycheck when working long holiday hours?
ReplyDeleteBlack Friday is quite the phenomenon as you start to think more about it. People are willing to camp out overnight to possibly get a new or expensive product at a discounted price. Sometimes all that work is for nothing and the product is gone before the customer can get to it. Retailers capitalize on this opportunity as the customer is already in the store, and can often persuade them to buy a product they weren’t originally in the market for. Although I have shopped during Black Friday before, I think it’s a scam, and people would be better off and the opportunity cost would be lower if they shopped on a different day of the year.
ReplyDeleteThe Christmas season definitely has an effect on the demand and supply of products. Since parents know what their children are expecting from "Santa," the demand for those particular goods increases. However, businesses can often anticipate this increase in demand and will match it with an increase in supply. An increase in both demand and supply raises equilibrium quantity, but whether equilibrium price rises, falls, or remains constant depends on the amount of increase for both supply and demand. However, the phenomenon of Black Friday can also have an effect on the demand of products. Because consumers anticipate the lower prices and deals on products on Black Friday, they might not necessarily buy the products before that date, decreasing the demand of those goods, and even possibly creating a surplus until the day after Thanksgiving. Because of this, stores will often restock their shelves right before Black Friday in preparation for the mass rush of people. Even with that, shortages still occur because of the massive increase in quantity demanded.
ReplyDeleteI am shocked that Cyber Monday creates a larger profit than Black Friday, however I guess that it makes sense as more people are willing to buy online in the comfort of their own home. These large influxes in sales help boost the economy up, and the drastic sales create a large demand from customers. Since more people are buying a large quantity of goods at the lower price, revenue and profit jumps up compared to if the good were just being sold at the normal everyday price.
ReplyDeleteI often think of tho holiday as a time where prices are low, and demand goes up for products. I rarely think of how all of this spending helps the economy though. Businesses during the holiday season have to increase their supply because the demand will be higher as prices are lower. I wonder how a company decides how much to increase their supply by during the holiday season?
ReplyDeleteEveryone has to love the holidays but I am shocked that Cyber Monday is much higher when selling products than it is for selling on Black Friday. I strongly agree with the fact that many people love shopping on Black Friday and getting awesome deals on some of the products that they buy but would they be satisfied enough to purchase a product on Cyber Monday as much as purchasing a product on Black Friday?
ReplyDeleteMost if not all major companies get a big portion of their income around the christmas time. Christmas is the season of giving right? Well you’re giving the hard earned money you made working 40 hours a week. You’re giving that to the company’s and the manufacturer then you are giving the gift you just bought away to someone. Typically around the major holidays that’s when major companies see an increase in sales. If you take Valentines day for example that is when a lot of chocolate is sold because most guys want to show their affection for their loved one with a box of chocolate and a couple of balloons. The fourth of July is where a lot of fireworks, alcohol, food, everything is being sold because it’s the day America got their independence. So all in all it’s all about the type of holiday and the traditions going on that determines the seller's market for products.
ReplyDeleteI always thought of how much people spend during the holiday season. From gifts for friends and family to things that people want for themselves on black Friday, there is always the mentality to just spend. People don't take the time to think about the price tag till later and that results in some big sale boost for retailers. I've never looked at the holiday season from the seller's perspective before, and this was an interesting eye opener.
ReplyDeleteIt's crazy to see the people that go all out on Black Friday every year. From standing in lines overnight to fighting for that discounted toaster they absolutely need, these people are great ways to stimulate the economy. It is just sad to see people going out shopping instead of spending time with family. I guess none of that really matters from a economic standpoint since people are buying a tremendous amount of items either way. Whether it is stocking up on food for a Thanksgiving feast or stocking up the shopping carts, people are still spending a significant amount of money boosting the economy.
ReplyDeleteAs I get older I really start to realize how much money is truly spent during the holiday season. Thanksgiving's biggest costs are food for the most part. But the biggest part is Christmas. Some people may find themselves going over the top during this holiday season. Buying gifts, food, a tree, and decorations. This may seem like it's all bad, in reality it isn't. All of this spending is improving and adding to our economy. This spending is not all bad.
ReplyDeleteAs the prices lower, you save money on specific items, but overall, you likely spend more. In holiday seasons, most stores lower their prices to lure in customers to buy items they have been wishing for, and they do it very effectively. By lowering the prices, the bring people in it buy what they were looking for, but when in the store, they likely end up finding interest in other items which are also on sale. They save money on what they were looking for, but spend more overall with more items in the cart.
ReplyDeleteThis is where I feel like the Black Friday holiday is just a big "cash grab" for major retailers. Although prices are cut substantially, you buy more goods than you usually would. By lowering the prices, these retailers are able to draw in many more customers than usual. Not only that, but retailers set up the store so that consumers end up leaving with more than they intended to leave with.
ReplyDeleteI have also never been Black Friday shopping. I’m not a fan of shopping normally, and opportunity cost of getting something for a few dollars cheaper in exchange for pushing through crowds of people and waiting in line for hours just doesn’t seem worth it to me.
ReplyDeleteIv'e only been Christmas or black Friday shopping once.And I was thinking why are so many people here. And then I saw two females fighting for a flat screen 56' TV and that was when I understood the demand and the supply and is so high it really made me think how does this benefit the producers.
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