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Are Black Friday Sales Worth the Hype? Experts Weigh In

If you're looking for a way to polarize random crowds of people this time of year, just bring up Black Friday shopping.

Photos: Getty Images
Photos: Getty Images

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If you're looking for a way to polarize random crowds of people this time of year, just bring up Black Friday shopping.

"I just don't think it's worth it," declared Winona, a 21-year-old shopper who has no plans to be up before the crack of dawn on Black Friday. "There are too many people," her friend Daijsia chimed in. "When I go Black Friday shopping, it's usually later in the day. It's not like, 'Let's get up at 5am and sit outside of the store.'"


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Fittingly, the girls were sitting outside the local Spirit Halloween pop-up shop in a Massachusetts mall on a deafeningly quiet Sunday afternoon—prime shopping time for people who don't see the appeal of a couple hours of hardcore Black Friday shopping. "I don't really understand the need for 1,000 people to go into one store because of a sale," Daijsia continued. "I mean, did you really need it that bad?"

In the business of Black Friday shopping, the promise of mindblowing deals you can't score at any other time of year is essential to get people out of bed and in the stores at all hours. A few years ago, the most diehard shoppers showed up in droves at midnight; now they're rushing out after Thanksgiving dinner. The hype is at such a level that almost all retailers feel like they have to play. But whether or not the discounts are truly worth the buy on Black Friday is a different story.

"It's a big weekend for retail in general," Dan Butler, senior analyst for the National Retail Federation, told Racked. "But there are some retailers, like Macy's for example, that might have a one-day sale two weeks earlier that's bigger for them as a company."

Take, for example, Gap's Black Friday sales strategy. Last year, Gap offered 40% off consumer purchases that entire weekend. Right before Christmas, the same deal cropped up again and in January, merchandise was marked up to 50% off.

J.Crew followed the same pattern: the retailer offered an enticing 30% off everything on Cyber Monday last year, and a couple of weeks later, the same sale was being advertised for last-minute Christmas shoppers. In 2014, the best J.Crew sale didn't even happen on a holiday, but on an unassuming week at the end of April when the retailer did a blowout 50% off items already on sale.

Even so, the prevailing idea that Black Friday is the mother of all sale holidays continues to stick with consumers. Deal-finding app Shopular conducted a survey among 600 of its users and about half of the respondents (46.97%) thought that Black Friday had the best deals of the holiday season, and more than 85% said that they typically spend time shopping during Black Friday.

Shopular's head of marketing, Lee Senderov, attributes the mentality to a more aggressive sales approach from retailers. "Stores are leaking deals earlier than ever before," Senderov told Racked. "I've been in shopping now for over six or seven years and I never used to see deals for Black Friday being leaked before Halloween, and we're already getting Black Friday circulars from retailers."

There's also been increased focus on reaching consumers equally on every front, from in-store to online to mobile. "Nowadays, a lot of the retailers are really trying to have this omnichannel presence where the same items are merchandised in every channel, whether it's catalogue, in store, or online," Senderov said. "I just met with a retailer and they said to me that one of their biggest priorities this holiday season was making sure that the customer can find the item wherever they choose to shop."

While marketing to consumers is growing more and more competitive, the end goal is still as simple as moving merchandise off the floor. And if it doesn't happen over Black Friday, it's likely that deeper sales will crop up later down the line. "What [retailers] do is they look at the total number of units that they buy up front," Butler explained. "And then they say, 'What do we need to do to be sold out by the end of the season on that item?' And then they negotiate if they aren't sold out, what are they going to do to sell out or to cover the expense of the markdown, or can they return the product to the vendor."

Occasionally, merchandise is specifically bought and sold for Black Friday, but it's mainly a strategy to draw consumers into the stores and keep them shopping after scoring the promotional deal. Within the industry, these promotions are commonly referred to as loss leaders because retailers will sell items below the market value to bring customers in and hopefully lead them to other, more profitable sales. "Some people call them loss leaders, but not everything that's promoted is a loss leader," Butler cautioned.

Opening on Thursday night is just another part of the game to get people shopping even sooner. The practice is a reaction to sales hype that saw competing stores pushing their opening hours way before midnight on Friday. "What happened before Thanksgiving is everyone was opening earlier and earlier on Black Friday," Jody Rohlena, the senior editor at ShopSmart, the shopping arm of Consumer Reports, told Racked. "So you get to a certain point and it's not Black Friday anymore—all of a sudden it's Thursday."

While a few retailers like Walmart and Kmart have been on top of Thanksgiving Day openings for years, the trend caught on with a vengeance last year when Macy's, JCPenney, Kohl's, and more than 250 mall properties announced that they too would be opening their doors on Thursday.

"Of course there's a ton of backlash," Rohlena acknowledged. "But like it or not, retailers are really looking for your holiday dollars and they're trying every trick in the book to get you to come in their store. So if they can get you lured in for Thursday, then that helps to pad their pocketbooks going into the holiday season."

But while some stores prep for Gray Thursday, others are making it clear that they're not going to be open during the holiday. Two weeks ago, Costco announced that stores would stay closed on Thanksgiving. "Some companies like Costco are making headlines by saying, 'Hey, we're not opening on Thursday,'" said Rohlena. "It's funny because that's the headline: they've never been open on Thanksgiving but the fact that they are making a moment out of it and saying, 'We're choosing to buck this trend' is rallying support for them."

Staggering sales on big-screen TVs and 24-hour shopping sprees play into the Black Friday hype, but in reality, most retailers are just looking to join the fray with some sort of sale—and not necessarily the best one. "If we look at the apparel sector, Black Friday is a major resource," Edward Hertzman, founder and publisher of the Sourcing Journal, told Racked. "Whether it's Macy's or Kohl's or Target or Sears or American Eagle, every retailer in some way is participating in Black Friday. I think it's become a standard business practice to offer promotions at that time of year, and I think consumers that are looking for apparel know that."

Hertzman predicts that this holiday season in general will be extremely promotional, as retailers are coming out of a weak back-to-school season and retail sales in general are not great right now. Black Friday is only the beginning of a long line of aggressive sales geared toward moving inventory and outselling the competition. "It's becoming a vicious cycle," Hertzman explained. "You want to offer the better deal first, and you gotta keep offering better and better and better and better and it's a never-ending process. How low do you go? Eventually the retailers pay you."

That day may not be too far off in the future. During the Black Friday weekend last year, H&M offered 40% off online purchases, but their sale items were up to 75% off by January. Fast forward to this past weekend, and their Halloween sale included merchandise slashed down to $1.

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