Thanksgiving day 2018
Thanksgiving is a wonderful tradition of sharing with your neighbors and family. It brings a warmth in the hearts and souls all around you. It also brings a million and gazillion dollar smile on the faces of marketers. Black Friday – though sounds ominous is one of the most eventful shopping and spending days for the United States. Black Friday is a barometer to test out the potential success for a new product by looking at the consumer response. As the graph below shows, the desktop or online spending itself has reached to a scale of $3.4 billion.
Every holiday season is a new cycle for sales gurus and companies to take stock of frenzied purchases, and ensure the enthusiasm of the crowds matches their sales revenue. If the numbers in the graph are any indication to go by, high spending on Thanksgiving followed by good numbers on Cyber Monday are a positive indication for the stock market. The stock market is affected by the off due to the extended holiday but the sales on these few days is an indication of the spending confidence of the general public.
Desktop Retail Spending in the United States from 2008 to 2017
Strong Correlation Between Thanksgiving Holiday spending and Revenues?
in 2011, the stock market, Dow Jones Industrial Average increased by 300 points following Cyber Monday and Thanksgiving holidays. These are short-term indications of the buoyancy of the holidays. However, going by the thought that Thanksgiving spending is a harbinger of annual profitability for companies is misguided. A Market Watch analysis done by Mark J. Hulbert in 2008 tracked the history of stock market performance after Thanksgiving for 114 years’ data. He compared it to the performance for the rest of the year. His study concluded there was no correlation between a Black Friday bumper sale and quarter four performances of companies.
Thanksgiving 2018 – 22nd November
Black Friday 2018 – 23rd November
Cyber Monday 2018 – 26th November
The 2018 Black Friday forecast per a report by National Retail Foundation expects an increase in spending by 4.1 % to an average of $1,007 during the 2018 holiday season. As per the report, sales and offers always attract the holiday shoppers as cited by 71% but quality and selection of merchandise were the next most important reason (cited by 60%), followed by free shipping (47%) and convenient location (as cited by 45%).
Black Friday, Cyber Monday and Thanksgiving sales are a great way for marketing analysts to shortlist the best of products and also test out various marketing strategies. Watchful consumers are smart enough to understand the pricing mechanisms before and after the Thanksgiving holidays and price penetration strategy works best only for the smaller goods.
However, retailers specially in consumer durable (gadget companies such as Apple) and staples (luxury gourmet ingredients and food items) can look forward to introducing new attractions for consumers. In 2017, J.C.Penny saw purchases increase in jewelry, furniture and refrigerators. Macy’s been doing well in for its women’s apparel section. With Apple having started Black Friday sale since 2017 in the form of Apple store gift cards, everything is on the menu.