Thursday, December 27, 2012

The New Black Friday Strategy Totally Backfired ... - Business Insider

Kim Bhasin / Business Insider

This year's holiday retail numbers are uglier than anticipated.?Growth came in at 0.7 percent ? the weakest since 2008.

The strategies that retailers used over the holidays didn't convince enough Americans to come to stores this year.?

The early Black Friday backfired on retailers,?wrote Brian Sozzi, chief equities analyst at NBG Productions in a note to clients.

"Early store openings for Black Friday only shifted the holiday consumption pool, which was the opposite of the intended effect," he wrote.

"Retailers wanted early buying to lead to splurge buys towards the end of the season.?The thought they hoped to trigger: 'man, did I REALLY get everyone enough?'?

It didn't work, and in the end, the move probably cost retailers more than a few pennies.

"Ultimately, retailers may find that all the Black Friday shifts have really achieved is the higher costs they incur from paying employees to come in for Thanksgiving,"?wrote Justin Lahart at The Wall Street Journal.

Between the fiscal cliff, Hurricane Sandy, and the tragic Newtown shootings, shoppers weren't in the mood.

"A lot of the Christmas spirit was left behind way back in Black Friday weekend," Marshal Cohen, chief research analyst at NPD Group,?told the AP. "We had one reason after another for consumers to say, 'I'm going to stick to my list and not go beyond it.'"

Even by offering steep discounts in the final moments, retailers didn't manage to get enough shoppers into stores to buy up merchandise. They resorted to "contingency promotional plans" in their panic as Christmas closed in,?wrote Lazard Capital Markets analyst Jennifer Davis in a note to clients.

"Traffic?definitely picked up over the last weekend, but we believe sales were?not quite as robust as hoped.?The extra weekend before Christmas?this year, compounded by the warm weather, amplified the post Black Friday lull," she wrote.

Source: http://www.businessinsider.com/black-friday-strategy-2012-12

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