Deal - Black Friday is no longer a day, it’s a season.

Even though I rarely have extra cash laying around these days I still make a habit of keeping up with various websites such as Deal which specialize in finding and promoting deals (natch). In addition to finding literally hundreds of deals every day they occasionally have an article about shopping such as the following discussing how Black Friday is expanding:

Black Friday Is No Longer a Day, It’s a Season

When most people think of Black Friday, they think of the day after Thanksgiving. But the fact is, over the past several years, the idea of “Black Friday” has been expanding.

In previous years, Black Friday had become a two-day event, since many Black Friday sales are available online on Thanksgiving Day. Last year, however, Wal-Mart upped the ante with its “Secret Sale” promotion. That sale started exactly three weeks before Black Friday. It featured a high-definition DVD player (HD-DVD) for $99, Acer laptop for $348, and 50” plasma TV for $999, prices that are still aggressive a year later. Not surprisingly, Wal-Mart received millions of dollars worth of free PR for its “Secret Sale” (a misnomer if ever there was one). Importantly, Best Buy beat Wal-Mart’s price on the HD-DVD player that day, showing a willingness to compete with its own loss leader and getting its own free PR.

Wal-Mart’s goal was to extend the halo from Black Friday into multiple high-buzz sales events throughout November. You’re likely to see the same game plan this year from Wal-Mart, which enters this holiday season much healthier than its competitors. And where Wal-Mart goes, Best Buy, Target, and the others must follow. It’s a live-or-die holiday season for many stores this year. Retailers can’t ignore the power of huge, “Black Friday”-like sales events on the run up to Thanksgiving.

And if a retailer is thinking about not competing, it had better think twice. Four years ago, Wal-Mart skipped Black Friday entirely, with no major ad push and no “doorbusters.” The result was the worst after-Thanksgiving sales weekend for Wal-Mart in years. Retailers who don’t want to compete with Wal-Mart by expanding Black Friday into a month-long event run the risk of having bad sales for an entire month, a death knell for most.

The article goes on to talk about how a lot of stores have to borrow in order to purchase their merchandise and then hope they make enough off the sales to pay off the loan and turn a profit, but with the current credit crunch, thanks to the assholes on Wall Street, that business model is a very difficult one to maintain. Banks are being very stingy with credit and the fact that the banks know consumers are cutting back on unnecessary purchases makes them even less open to giving out credit to retailers. Combine that with the fact that many retailers are struggling and things could get bloody:

Every year, a few struggling retailers file for bankruptcy (or go out of business entirely) after Christmas. It’s a normal cycle. However, that’s changing. Last season, CompUSA started liquidating its stores in early December, and it was completely gone by January. (The new CompUSA is now run by TigerDirect.)

This year, things have gotten worse. Linens ‘n Things is already bankrupt. It’s liquidating its stock online and in stores before closing shop. Circuit City is trying to avert bankruptcy by closing over 100 stores and laying off thousands of employees. Mervyns is closing all 175 stores. JC Penney is in trouble. Sears is closing yet more stores. And it’s just October.

Make no mistake: Thousands of jobs are at stake, and so many stores going out of business is bad over the long-term. But in the short term, these stores must liquidate their inventory. Consumers benefit from liquidation sales. Plus, you’ll soon see more closeouts at stores like, Woot, Fry’s Electronics, TigerDirect, and others that resell distressed inventory.

Which means, ironically enough, there’s some excellent deals about to come down the pike. Deal is estimating that the deals we’ll see this season will be the best since the days of the first bubble (2001):

It’s a perfect storm: Consumers have cut back spending. Stores must slash prices to drive traffic to their stores. Competition and reduced margins will drive struggling stores into bankruptcy. The credit crisis will hammer bankrupt stores, forcing them to auction off their inventory to those liquidators that still have access to cash. And finally, a $2,000 HDTV pops up on for $1,199.

I knew I should’ve held off on buying a new LCD TV until the fall. Of course that’d have meant no TV or movie watching for three or so months so I suppose it works out in the wash.

If you’ve got any spare money this year, assuming you’re not in the same boat I am, then it’s going to be a great time to shop. If you’re a retailer, though, then things are going to be very rough.

2 thoughts on “Deal - Black Friday is no longer a day, it’s a season.

  1. If you’re in the retail business, I feel for you. This is going to be a slow holiday shopping season. The winners will be the discounters, but even those will likely feel part of the pinch. We’ll see how sales volume at WallyMart, Target, etc., plays out.

    Not surprisingly, pawn shops and stores like Aldi, dollar stores, etc. are doing quite well well.

  2. But…. the economy’s fine…  I know this because McCain told me.

    Not surprisingly, pawn shops and stores like Aldi, dollar stores, etc. are doing quite well well

    Last month they said it will get worse before it gets better.  This is just a taste.

    Resellers are going to clean up.  First companies that go out of business are going to flood them with product, then people who didn’t know they were broke are going to come back after Christmas to sell stuff they bought because they need money for their mortgage.  I wonder what garage sales will look like for January.

    In the meantime market speculators will clean up every time someone says “The economy’s going to turn around today” and turns out to be wrong.  Warren Buffett’s already laughing all the way to the bank.

    Just because the economy is in the toilet, doesn’t mean everyone’s broke.

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