Early Holiday Sales Bring Pros and Cons for Retailers and Consumers

November 22, 2010

Consumers hardly had time to stash their Halloween costumes before holiday décor appeared in stores this year, and professors in Georgia Southern University’s College of Business Administration said holiday sales started even sooner.

Marketing professor Nick De Bonis, Ph.D., said retailers felt pressure to generate profits during the 2010 holiday shopping season to offset lagging revenue from the first half of the year, which led to earlier, more intense marketing pressure targeted at consumers.

“Christmas promotions began as early as September to provide shoppers an opportunity to spread their spending over a longer period,” said De Bonis, a former global marketing consultant. “The strategy was to make holiday spending seem less traumatic than doing all the buying in the four weeks from Black Friday to Christmas Eve.”

Black Friday — the day after Thanksgiving — is considered the heaviest shopping day of the year causing retailers’ finances to move from the red to the black.

But Black Friday isn’t confined to just Friday this year, according to the College of Business Administration (COBA) educator, who cited early Black Friday sales by retailers like Best Buy, Lenovo, Macy’s and Sears. Other companies are pre-selling products at Black Friday prices to be picked up on the actual day. Additionally, there are at least six Black Friday deal websites on the Internet offering directions to the best deals and even “leaking” Black Friday promotions for some stores.

Of course, this aggressive approach does come with caveats on both sides. The low prices may seem great for consumers, but naysayers criticize retailers for once again placing focus on their profit margins instead of the “reason for the season.” De Bonis also warns consumers to pay close attention to spending and not get caught up in the excitement of early deals.

“The danger for aggressive marketers is reviving the criticism that the mercenary drive for profit has replaced the ‘Christmas in X-mas’ with the ‘Commercial in Christmas,’” De Bonis said. “For recession-fatigued consumers, the danger is the pull between the practical need to spend less and the seduction of the deal.”

But are profit margins for retailers solely to blame for the metamorphosis of Black Friday into its own season?

“There’s always an element of the chicken-egg discussion when it comes to holiday marketing and consumption,” stated De Bonis. “When the bills for holiday spending start coming in at the beginning of the year, businesses and their marketing campaigns are easy scapegoats, but the counter argument is that marketers couldn’t sell if the demand wasn’t there.”

The reality is that the seller-buyer dynamic is co-dependency.