International news analysis: Is Black Friday a Thanksgiving turkey?

Although Black Friday is regarded as a new phenomenon in the UK, it is firmly entrenched in the US psyche as the busiest shopping period of the year.

As US retailers fight it out for for every shopper trip and hard-earned dollar, there is growing evidence of overkill – the goose (turkey?) that lays the golden egg is being well and truly cooked.

All manner of statistics are available to reflect the shopping frenzy of the past few days in the US. But the most telling, and indeed, sobering ones, come from the National Retail Foundation (NRF).

Over the four-day period, traffic was down 5.2%. Some would-be footfall inevitably gravitated online; IBM reported that online sales over the Black Fiday period were up 9.5% and mobile sales rose 28.2%.

However, the figure that transcends all others is that, according to the NRF, sales over the four day period were down 11.3% year-on-year. Regardless of channel, consumers spent substantially less than last year.

That was not through want of trying on the part of the retailers themselves. The general trend among the leading operators was towards making the window of opportunity as large as possible, either by opening stores earlier (6pm on Thanksgiving itself is becoming the norm) or by introducing Black Friday deals earlier in the week, ahead of the unofficial ‘embargo’. The latter was one of Walmart’s key strategic planks this time around. Online gives retailers much freer rein than ever to do this.

That trend is manifest in some of the other figures to emerge over the weekend. ShopperTrak reported in-store traffic up 27.3% on Thanksgiving itself. On the surface that looks like a healthy growth figure but in reality it is leveraged off a relatively low base.

Shades of grey

It is little wonder that Thanksgiving is gradually earning the moniker ‘Grey Thursday’. Even allowing for non-store commerce, there is a finite amount of spend being made over a longer period of time. A classic case of displacement, rather than incremental growth.

But this is likely to see US retailers renew their endeavours, rather than break rank and hold back. A zero-sum game it may be, but if they don’t make the effort, there is a risk that trade simply goes to a competitor.

Herein lies a very cautionary tale for Black Friday (and Cyber Monday, for that matter). There is a risk of Black Friday becoming too much of an obsessive focus for retailers.

There is a much bigger game to play than attracting hoards of opportunistic, bargain-seeking shoppers eager to cherry-pick heavily discounted promotional items. If no spin-off trade is generated, either in terms of incremental spend on other, non-discounted items, or repeat visits over the wider festive period (and more importantly, beyond), the game has been lost.

A promotion is only as good as the wider benefits it brings. Retailing is a long-term war, Black Friday a limited-period battle. As the saying goes, it is better to win wars than battles – a message the increasing number of UK retailers jumping on the Black Friday bandwagon would do well to heed.

• Stephen Springham, senior retail analyst, Planet Retail