The Herman Trend Alert|
December 13, 2006
Digitization of Black Friday
In the U.S., the Friday following Thanksgiving is known as "Black Friday", because that holiday is widely considered the point at which retailers go from losing money (being "in the red") to turning a profit (being "in the black").
Black Friday shopping is the epitome of consumerism. Anticipating great deals, many shoppers camp out in tents or lawn chairs to await store openings. Often, the earliest shoppers literally run into stores as doors are unlocked.
Recently, however, the Internet has played an increasingly strong role for Black Friday shoppers. Frustrated by fighting crowds only to find that stores are sold out of their most sought-after items, many are hoping that the Internet can help forge a new Black Friday experience.
According to Richard Feinberg, a researcher with the Purdue Retail Institute, "Internet sales are expected to be 6 percent---$12 billion to $13 billion---of the $220 billion of holiday sales."
Not surprisingly, shoppers are also going online to hunt for bargains. In the week before Thanksgiving, "Black Friday" was the third most popular search term. What’s more, the share of searches conducted using this term was up 462 percent from 2005 levels; an unprecedented increase. Expect further acceleration in online sales next year.
The growth of online retailing has had at least one negative consequence within the broader workforce. An estimated 60 percent of Internet shopping is done from the workplace. The result is a drop in productivity, particularly during prime holiday shopping periods.
Another emerging trend is "multichannel retailing". Savvy retailers are coordinating on- and off-line activities to better serve Net-savvy consumers.
One example is Circuit City. Hoping to shorten lines at retail locations, the store took orders online and invited shoppers to pick up orders at their chosen store. The retailer promised shoppers gift certificates of $24 for orders not filled and waiting within 24 minutes.
As Internet adoption continues to advance, watch for more integration between traditional and online shopping. While some will shift shopping and fulfillment to an online model, others will follow Circuit City’s lead and establish hybrid models that meet specific retail goals.
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