Do Consumers Have A Problem With Black Friday Creep?

Before I begin my post today I’d like to wish everyone a happy Thanksgiving weekend, and safe travels to anyone visiting family or friends today to celebrate the holiday.

While today is a day for being thankful, later tonight, after the festivities, thousands of Americans will venture out later tonight for the start of the holiday shopping season. Many stores are opening and holding sales as early as 8:00 PM this year, and are being blasted for the controversial decision.

But exactly how much of a problem does America have with the theory of “Black Friday Creep”? Many people say that this year the retailers have gone too far- but will that stop consumers from going out and getting in line early? Will we see yet another record-breaking sales period? It’s time to see just exactly how hypocritical we are.

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If there’s one thing we can be certain about, it’s that retailers are opening earlier:

I picked seven major retail chains, most of which specialize in different or all genres of retail. None of them opened before 5:00 in 2008. All of them are opening at or before midnight this year. Even K-Mart and Sears, which had both consistently been among the later openers, are welcoming customers at 10 PM this Thanksgiving.

Opening stores earlier means that there is a greater range of time for people to show up, meaning more customers and more profit. Whether it is because stores are opening earlier or because Black Friday is simply becoming more popular, more customers are showing up, stores are making more money, and- if only slightly- individual customers are spending more money. 

Now for a brief interruption about the Internet: Online spending has been up recently too. Thanksgiving Day spending online was up 18% last year, and Black Friday spending was up 26%. All told, Americans spent $1.295 billion online over those two days last year.

Getting back to in-person shopping, let’s also look at the percent change in total amount spent:

2009 was a down year by all accounts. Individual customers spent the least in that year, and the total amount spent was just barely more than the last year. You could conclude that the recession meant people stopped showing up, but the increase in customers was pretty much the same as between 2007 and 2008. Customers still spent nearly $350 individually on Black Friday in 2009, suggesting that while a recession does have a small impact on most Americans, it’s not enough to stop them from showing up and spending money on Black Friday. And this makes sense- stores usually hold some of their best sales of the year the day after Thanksgiving, making it one of the best days to go bargain hunting on.

Since 2009, however, people are steadily spending more and more.

Now here’s the bad news for retailers:

This graph essentially represents the derivative of the customer graph (for calculus fans out there)- it’s the percent increase in customers over the previous year. While more customers show up each year, the percentage of those that are new customers is slowly but steadily going down. This suggests that at some point- probably after the next few years- Black Friday could top out in terms of customers.

However, I use the phrase “bad news” in a relative sense. When Black Friday finally reaches its customer limit, a good 250-300 million people will be coming out for the sales, each spending an average of about $400. Not bad for retailers at all.

Just for fun, I’ll make some predictions on the type of turnout we could expect for this Black Friday. About 250 million customers (the data suggests 249.8) will show up, spending on average about $393.95. This is actually about five dollars less than the average consumer spent in 2011. However, the spent overall will still increase- a grand total of $56.1 billion*

Let’s get back to issue I talked about at the beginning of the post: the slow creep of stores opening earlier and earlier on Black Friday- and Thanksgiving. Americans say they have a problem with it. Do they?

Not at all. The percentage of total customers on Black Friday that show up at midnight is increasing at an incredible rate. One-quarter of Black Friday shoppers were out at midnight in 2011, a jump of over 600% from 2009. If the trend holds true, we could see nearly half of all consumers out at midnight- or certainly before.

Many Americans are complaining about the Black Friday Creep, but the statistics show that we secretly embrace it. Something needs to drastically change in the average American’s mindset before retail chains put an end to the creep. Until that happens- if it happens- store owners will continue to open earlier and earlier, more and more customers will turn out, and more and more money will be exchanged in the day after- and on- Thanksgiving.

*Why don’t the numbers add up? Most of my data was from the National Retail Federation. I’m guessing they took a survey of Black Friday shoppers and asked them how much they spent for the average individual amount. The number of unique customers is also probably lower than the total here, because many people shop at more than one place on Black Friday.