|Shoppers waiting in line at Best Buy.|
Two weeks ago I wrote a blog post encouraging consumers to avoid the newly created Thanksgiving Day retail super sales, in the hopes of reminding people about the dual impact of patronizing big box stores on a major holiday. When you show up to purchase your crazily discounted X-Box on Thanksgiving, you send a message of encouragement that tells retailers you don't mind shopping on an important holiday, which by default means you are comfortable asking others to enjoy their turkey feast in a break room instead of at home with their families.
Well, the overnight stampedes are over and the pepper spray has been dispersed. Black Friday retail sales results have been reported, and the expert conclusion is that those mega-discount events were indeed successful in driving customer traffic - BUT they have likely only shifted the finite spending consumers planned for the holiday to happen earlier in the season. I suppose if you're Target, Best Buy, or Toys-R-Us this may still be good news because at least you know "you got yours" this holiday season, but at what cost?
Beyond the diminishing respect levels between big corporations and their employees (which sadly is of no concern to most companies), there is also the issue of compromised profitability. Doorbuster sale items are typically sold below the retailers' costs, and if aggressive marketing doesn't somehow convince shoppers to purchase several regular priced add-on items, then the doorbusters simply erode profit margins.
The other interesting angle that ever short-sighted retailers never seem to consider is the holiday calendar. This year Christmas falls on a Sunday which is extremely relevant to consumer behavior and retail sales trends. A Sunday Christmas means that consumers will have a complete "shopping week" prior to the actual holiday, and this will have the impact of compressing sales for the month of December heavily into the last few days before the holiday.
With the overnight doorbusters shifting some sales extremely early into the season, and the Sunday Christmas compressing much of the remaining activity into the last few days before the holiday, retail sales in early-mid December will likely be extremely weak, sending retailers into a panic. The good news for consumers is that we may see more mid-December price-slashing as a result, though again, at the expense of profit for retailers.
I won't rail about corporate greed, but I also won't be all weepy when the same poor planning and short-term thinking we see every year nets another crappy below-expectations fourth quarter for major retailers. I want to see the economy improve as much as anyone, but I believe the sales-at-any-costs mentality, along with the slow chipping away at our personal values and national dignity, will ultimately take a toll on retail profitability.