Black Friday is the day following Thanksgiving holiday in the United States, which is celebrated on the fourth Thursday of November. This day has become a time for special deals and discounts, and it is said to mark the beginning of the holiday shopping season.
Understanding Black Friday
It is common for retailers to offer special promotions both online and in stores on Black Friday. Many open their doors early in the morning on Black Friday to attract customers or even keep their operations running late into Thanksgiving night. It has also become common for retailers to offer “Black Friday” deals before the actual day.
Some deal enthusiasts have become famous for camping out on Thanksgiving night to secure a spot in line at their favorite store; the most passionate may even skip Thanksgiving dinner altogether and head to any open stores. Typically, the offers last until Sunday, with both brick-and-mortar stores and online retailers seeing a surge in sales.
Black Friday and Retail Spending
Retailers may spend a whole year planning their Black Friday sales. They use this day as an opportunity to clear out excess inventory and offer special deals on seasonal items, such as holiday decorations and regular holiday gifts.
Special deals often include high-ticket items such as televisions, smart devices, and other electronics, attracting customers in hopes that they will also purchase higher-margin goods. Customers often eagerly await Black Friday advertisements, prompting retailers to do their utmost to ensure they are not leaked publicly ahead of time.
The competition among consumers for limited quantities of the most popular items can lead to violence and injuries in the absence of adequate security. For example, on Black Friday in 1983, customers fought, shouted, and surged in stores across the United States to buy Cabbage Patch Kids dolls, the year’s most sought-after toy believed to be in short supply. Horrifically, a worker at a department store was trampled to death on Black Friday in 2008 as crowds of shoppers pushed their way into the store the moment the doors opened.
Surprising Origins of Black Friday
The idea of promoting sales after Thanksgiving predates the term “Black Friday.” In an effort to kick off the holiday shopping season and attract throngs of shoppers, stores had been promoting big sales on the day after Thanksgiving for decades, based on the fact that many companies gave their employees a holiday on Friday.
So why the name? Some say the day is called Black Friday in honor of the term “black,” referring to profitability, which goes back to the old accounting practice of writing profits in black ink and losses in red ink. The idea is that retailers can sell enough on this one Friday (and the following weekend) to put themselves “in the black” for the year.
However, before it began to appear in advertisements and promotions, the original model of Black Friday was actually used by tired police officers in Philadelphia. In the 1950s, hordes of shoppers and visitors swarmed the City of Brotherly Love the day after Thanksgiving. Stores in Philadelphia not only advertised huge discounts and unveiled holiday decorations on this special day, but the city also hosted a football game between the Army and Navy on the Saturday of the same holiday.
As a result, traffic police were assigned to work 12-hour shifts to deal with the crowds of drivers and pedestrians, and they were not allowed to take the day off. Over time, the frustrated officers – using a term that is no longer acceptable – began referring to this exhausting day as Black Friday.
It spread
The term among store retailers who used “Black Friday” to describe the long lines and general chaos they had to deal with on that day. The colloquial phrase remained in Philadelphia for decades, along with its spread in some nearby cities like Trenton, New Jersey.
Finally, in the mid-1990s – in celebration of the positive connotation of black ink – “Black Friday” swept the nation and began appearing in print and television advertisements across the United States.
The Evolution of Black Friday
At some point, Black Friday jumped from crowded streets and busy stores to enthusiastic shoppers battling for parking spots and fighting over the hottest toy to get. When did Black Friday become the exaggerated shopping event that it is today?
It was in the 2000s when Black Friday was officially designated as the biggest shopping day of the year. Up until then, this title would shift to the Saturday before Christmas. With an increasing number of merchants starting to promote “can’t-miss” sales after Thanksgiving and the rising discounts on Black Friday, American consumers could no longer resist the allure of this big shopping day.
In 2011, Walmart announced it would start sales on Thanksgiving evening instead of opening its doors on Friday morning. This sparked madness among other major retailers, who quickly followed suit. Today, Black Friday is a longer event – the Black Friday process.
According to the National Retail Federation (NRF), 196.7 million consumers in the United States shopped during the five-day weekend between Thanksgiving and the following Monday in 2022, an increase of about 17 million from 2021, which is “the highest number since NRF began tracking this data in 2017.”
The average amount spent by consumers on holiday items during the weekend in 2022 was $325.44 (compared to $301.27 in 2021). Of that total, $229.21 was for gifts, according to NRF, a figure that highlights the fact that people now see it as an opportunity to load up on items they want for themselves, not just to complete their gift lists.
Black Friday vs. Cyber Monday
For online retailers, a similar tradition emerged on the Monday following Thanksgiving – Cyber Monday. The idea is that consumers return to work after the Thanksgiving holiday ready to shop – at their employers’ expense. Online retailers often announce their deals ahead of the actual day to compete with in-store Black Friday offers.
Cyber Monday has proven to be successful with shoppers, but in terms of total online sales, it lags behind Black Friday. About 87.2 million customers shopped online on Black Friday 2022, while the number of customers on Cyber Monday was 77 million, according to NRF.
The Economic Significance of Black Friday
Some investors and stock analysts look at the Black Friday numbers as a way to gauge the overall economic health of the retail industry. Others scoff at the idea that Black Friday has any real predictive power for the fourth quarter of the stock markets in general. Instead, they point out that it can result in very short-term gains or losses.
However, overall, the stock market can be affected by the presence of extra days for Thanksgiving or Christmas. It tends to see an increase in trading activity and higher returns the day before a holiday or long weekend, a phenomenon known as the holiday effect or weekend effect. Many traders look to capitalize on these seasonal spikes.
When
What is Black Friday in 2023?
Black Friday always occurs the day after Thanksgiving. In 2023, Black Friday will fall on November 24th.
Why is Black Friday Important to Economists?
Some economists consider Black Friday a good indicator of consumer confidence and potential consumer spending in the future.
When Did Cyber Monday Start?
Cyber Monday, the Monday following Thanksgiving, was introduced in 2005 by Shop.org, an online branch of the National Retail Federation.
Conclusion
Black Friday, the day after Thanksgiving, marks the beginning of the holiday shopping season. Consumers seek out significant discounts offered by retailers, while economists use overall sales figures as a measure of consumer confidence and the health of the economy.
Source: https://www.investopedia.com/terms/b/blackfriday.asp
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