Black Friday - Explained
What is a Black Friday?
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Table of ContentsWhat is Black Friday?How Does Black Friday Work?Black Friday and Retail SpendingThe Surprising Origins of Black FridayThe Evolution of Black FridayCyber Monday CompetitionShopping StatsThe Significance of Black FridayThe Black Friday Stock Market CrashAcademic Research on Black Friday
What is Black Friday?
In the United States, Black Friday is the Friday after Thanksgiving Day or Thanksgiving holiday, this day also signals the start of Christmas shopping season. Black Friday is a special day in which shoppers enjoy deep discounts on their products, and sometimes free shipping, it is a significant day to begin shopping in the U.S. In another vein, Black Friday in the stock market refers to the day in which the stock market crashed due to the plummeting in the price of gold. September 24, 1869, was Black Friday in the stock market.
How Does Black Friday Work?
On Black Fridays, shop owners, business retailers open their shops earlier than the time they sued to in order to attract more customers and realize more sales. Black Friday often come with discounts and special promotions, businesses do all they can to attract more customers. Black Friday is often in November but in some cases, retailers offer discounts and open up their sales to the Thanksgiving holiday. In the U.S, Thanksgiving Day marks the beginning of holidays for most employees, it also signals preparation for Christmas and the festive period. Individuals look forward to Black Fridays to bag great deals and heavy discounts on their purchases, stores also prepare to offer attractive benefits to their customers.
Black Friday and Retail Spending
Black Friday is important, not only for buyers but also for retailers. Oftentimes, retailers, whether small or large retailers save up and plan for Black Friday. This day is associated with heavy sale which can spike up the sales margin of a business in a significant way. In fact, many retailers have their yearly budget focus on Black Friday sales, they also spend their entire earnings for the year trying to stock their stores and thereby improving sales. Retailers use Black Friday to offer deep discounts on a stock that has stayed long in the inventory and attractive bonus on seasonal items. Retailers also make their stores attractive for Black Friday sales, customers are likely to be more attracted to stores that have fancy decorations and look really appealing.
The Surprising Origins of Black Friday
The activities that are peculiar to Back Friday started long before the term Black Friday emerged. Before the name Black Friday was coined, retailers often offer deep discounts and attractive bonuses during the post-Turkey day sales. Black Friday was coined in the 1950s, during the time Philadelphia police officers take to the city the day after Thanksgiving. Due to the fact that they turn ut in their large numbers, stores in Philadelphia also open up and churn out tons of sales to these willing officers. In bookkeeping, Black Friday is also important, this is the day where stores and businesses record the most profits. Since profits are recorded in black ink, the name Black becomes an important part of Black Friday.
The Evolution of Black Friday
In Philadelphia, Black Friday can be traced back to the 1950s, in the U.S also, it started before the 1980s. When it started, Black Friday is known as a day where all stores and streets are overcrowded as people struggle to make massive purchases of products at discounted rates. During these periods, stampedes occur, customers engaged in scuffles and fistfights, and the situation seemed to be uncontrollable. However, Black Friday became the top shopping event for the year in the 2000s. It is the biggest shopping that happens at the end of every year. As against when it first started when it was post-Thanksgiving sales. Black Friday is becoming lengthier in the present time as other concepts related to Balck Friday have begun to emerge such as Black Weekend.
Cyber Monday Competition
Seeing the success rate of Black Friday for retailers and businesses who open up their stores to the numerous customers that patronize them during these sales, online retailers have also devised a similar sales period. For online retailers, Cyber Monday is the day that begins the biggest online shopping season for the year. This is the Monday following Thanksgiving when sales are made by online buyers who enjoy deep discounts and other attractive benefits. For some online stores, Cyber Monday sales begin as early as 12:01 am on Thanksgiving day, a good example is Macy and Walmart. Cyber Monday has started recording huge success and profits just like Black Friday.
In the United States, there are shopping statistics that show the difference in spending on different regions or states. The southern region, for instance, spends the most according to statistics, in fact, the majority of high spenders come from Austin. Also, statistics reveal that men shop more on Black Fridays than women, the varieties of products they purchase also differ. Aside from people form Austin, the biggest spenders in the U.S are from San Jose, California, Arizona, Hawai, Scottsdale, and Connecticut. Age is another factor to be considered when it comes to Black Friday shopping or spending. People between the age bracket of 50-65 years tend to spend more than individuals within the age bracket of 18-25. The reason is not far fetched, the former has more savings and higher income while the latter re just striving to make income for themselves.
The Significance of Black Friday
Black Friday is really important, both to the retailer and customers and even the economy at large. The major importance or significance of Black Friday includes the following;
- It marks the day when people spend a lot of money which in turn circulates within the economy.
- Black Friday is a day associated with increased spending or trading and higher returns when compared to other sales days.
- Black Friday spending is an important metric for evaluating discretionary spending in the U.S.
- Black Friday gives an insight into the economy and overall financial health of a sector.
The Black Friday Stock Market Crash
Despite that Black Friday is associated with increased sales and increased profitability, there are certain exceptions. Black as a word is often used to describe dark days, it signals periods of disasters in the stock market. For instance, the Great Depression can be traced to the Black Tuesday which was on October 1929 when the market crashed. Black Monday in October 1987 also marked the day the stock market experienced the biggest crash. There are numerous examples of disastrous things happening on or after any Black day. The earliest crashes in the stock market in the U.S were associated with black days. A good example was the 1869 crash when the price of gold plummeted and eventually crashed, at this time, the price of gold drooped from $160 to $130, leading to the collapse of the gold market.
Academic Research on Black Friday
- TheBlack FridayEffect, Ramiah, V., Regan-Beasley, J., & Moosa, I. (2016). The Black Friday Effect.Advances in Investment Analysis and Portfolio Management, (7), 143-160. The likelihood of experiencing an earthquake, a tsunami and a nuclear disaster at the same time is minimal and yet it occurred in Japan on Friday, 11 March 2011. That day, which is usually referred to as Black Friday, provides an environment that represents a unique opportunity to assess the performance of equity markets under extreme conditions. This paper attempts to find out how the risks and returns of Japanese industrial portfolios were affected by the three events. Event study methodology is used to estimate abnormal returns while asset pricing models are modified to capture variation in systematic risks. This paper documents evidence indicating that these events affected the Japanese market negatively, with the majority of industries recording negative abnormal returns and a general increase in systematic risk. The alternative energy sector, however, reacted in exactly the opposite manner.
- Analysis on Present Situation and Future Tendency of US Industrial Structures [J], JING, Y., & WANG, X. (2006). Analysis on Present Situation and Future Tendency of US Industrial Structures [J]. InNortheast Asia Forum(Vol. 1). Since 1990s, the transformation of industrial structure is followed by the stable economy growth in US. Meanwhile, the primary industry employment proportion drops rapidly, and the employment proportion of the secondary industry and the tertiary industry rises. The US industrial structure transformation is useful for reference to the industrial structure adjustment of our country in future.
- Black Friday and Cyber Monday: Understanding consumer intentions on two major shopping days, Swilley, E., & Goldsmith, R. E. (2013). Black Friday and Cyber Monday: Understanding consumer intentions on two major shopping days.Journal of retailing and consumer services,20(1), 43-50. U.S. Retailers consider two major holiday shopping days as their most profitablethe Friday after Thanksgiving, Black Friday, and the Monday after Thanksgiving, Cyber Monday. Understanding consumer attitudes and intentions toward shopping in the mall or online at these times may aid retailers in their holiday marketing activities. This study uses data from a survey of 225 U.S. consumers to examine attitudes and behaviors of shoppers for these two shopping occasions. The results indicate that consumers enjoy shopping on Black Friday, yet were more likely to shop on Cyber Monday owing to its greater convenience. Retail managers will have a better opportunity to market on these two days with an understanding of consumer intentions for these major shopping occasions based on these findings.
- What's deviance got to do with it? Black Friday sales, violence and hyper-conformity, Raymen, T., & Smith, O. (2015). Whats deviance got to do with it? Black Friday sales, violence and hyper-conformity.British Journal of Criminology,56(2), 389-405. Based upon original ethnographic and interview data, this article presents an initial theorization and analysis of the violence and disorder witnessed throughout UK high streets and superstores during the 2014 Black Friday sales. While the conduct of these extreme shoppers appeared deviant, this article positions such behaviour as hyper-conformity to the cultural values of neoliberalism, embodying the competitive individualism, cultivation of envy and aggressive display of consumer items which characterizes Western society in late modernity. In doing so, the authors explore the concept of deviant leisure, using the disorder of Black Friday to pose important questions about how the underpinning social and cultural values of neoliberal consumer capitalism pervades relatively mundane leisure activities, cultivating harmful subjectivities.
- A perfect storm for consumer misbehavior: Shopping on Black Friday, Lennon, S. J., Johnson, K. K., & Lee, J. (2011). A perfect storm for consumer misbehavior: Shopping on Black Friday.Clothing and Textiles Research Journal,29(2), 119-134. Consumer misbehavior that harms other consumers and/or retailers has occurred recently during Black Friday (BF) sales. Using a combination of theoretical perspectives, the purpose of our research was to gather information about BF shopping to use in questionnaire development, to investigate potential relationships among the variables identified, and to suggest ideas for future research. From a survey of BF shoppers, we found shoppers who perceived they expended effort planning for and shopping on BF were likely to misbehave. We also found BF shoppers who expended effort planning and executing their BF shopping tended to score high on trait impulsivity. While this may seem contradictory, it can be explained by considering that people who expend effort in their BF planning may cognitively plan their BF activities and then take advantage of unplanned deals along the way. Our results support premises of the general aggression model to explain consumer misbehavior on BF.