Sales figures for Black Friday have been posted, with consumers spending 16.4% more than in the previous year. This data comes from a survey from the National Retail Federation; according to the data, total sales figures hover around 52 billion dollars, an increase from 45 billion last year. The high numbers come as a surprise to some analysts, which expected sub par figures.
There are multiple factors which have contributed to the high figures. Many consumers were turned away at the idea of enduring the harsh cold for hours immediately after a large meal, so this year retailers decided to open at midnight as opposed to the later hours of the night.
A recently coined term by retailers is "Cyber Monday", a continuation of the busiest shopping weekend of the year. Cyber monday is held solely online, thus the "cyber" designation. This was created due to an increase in online spending, with over 25% of consumers planning on shopping online this holiday season. This catering of Black Friday to this crowd has clearly proven successful for retailers, with over a billion being sold on Cyber Monday last year.
Consumer spending is known as a leading indicator to a recovering economy, and the strong figures may suggest this. However, only time will tell if this is a true recovery. The hard efforts by retailers to convince consumers into spending maybe more responsible for the increases in spending as opposed to an overall improvement in the economy.
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This alludes I think alludes to the other post in the economic recovery and the stability of it. I think that we, as a nation, are attatched to our holidays and our spending during that time of year that days such as "black friday" can spin the recovery rate, or cause us undue hope towards the overall stability and growth of the economy. Thus I think that figures like these will in general help the cause, but in the short term will cause some turbulence overall because it gets people's hopes up, but companies are not run on one day sales per year, but are run over the entire year's sales. Here we see large improvement from last year and I can only hope that the percentages get stronger versus last year's totals. All in all though, this is good news.
I think it's neat to see econ concepts about leading indicators actually applied to a real world example.
This post ties in with what Amy posted last week about Black Friday providing an economic boost. While I don't think the increase in sales figures and leading indicator this year necessarily proves the Black Friday = economic stimulus idea, I do think that Black Friday is an interesting factor to consider when gauging economic well-being. There's a lot of data to be drawn from this one day of activity anomaly, as Kevin pointed out with percent increases, supply-side changes, Cyber Monday statistics, and so forth; it's interesting to see how this information can be tied in with broader economic studies.
I don't think one day of a surge in sales can be indicative of whether or not our economy is recovering. Also, a big part of the money was probably spent at large corporations like Walmart that are already prospering, regardless of how the economy is doing.
Although like Anna said, positive Black Friday sales does not equate to successful economic stimulus plan, it still is refreshing to hear that people are spending more than last year. However, I must disagree with Kevin's reason as to why the sales have increased-- many employees were outraged that they had to be working at midnight, and there was even an effort to boycott Black Friday. I think the Black Friday sales are increasing because more and more businesses are realizing the power of the internet and offering more exclusively online promotions as well as spending more time beforehand advertising these promotions.
As with Cyber Monday, many chain stores are extending their sales to the whole weekend and even for the week after. I think this, along with the holiday season and post-holiday sales, will be a good two months or so of spending. Ultimately, I think we can look omistically upon our economic recovery for next year.
It is also a possibility that because the economy is not improving, black friday sales were more successful. People subject themselves to standing in line outside of a store in the freezing cold in order to score great bargains on electronics and other gifts for their families and friends. Maybe people were more willing to do this because they could not afford to do their holiday shopping with standard pricing. It's just a thought. As I was coming home on WEDNESDAY night, people were already lined up outside of Best Buy in tents to be the first to get into the store two days later. I found that to be a little absurd. The fact that they were willing to skip Thanksgiving, a family holiday, is pretty telling that they were desperate ...or crazy.
Nicola makes a valid point about Black Friday money flowing primarily to the already wealthy businesses, and so not necessarily helping the economy as much. However, I think a 16% increase in sales is a pretty big deal, and is pretty hard to attribute just to chance, even though it is just one day's sales. But we'll see how December goes...
What I find most interesting though is this Cyber Monday thingy. I'm kind of curious as to how much it detracts from Black Friday sales, and whether businesses will realize that they can make new spending holidays like this on their own and create more throughout the year. Privatized culture making... there's an interesting thought.
Does anyone know if there was ever a downward trend in Black Friday sales? To me its sounds like the 16.4% increase is cultural and can be attributed more to the rising popularity of this "holiday" due to increased hype and advertising. People hear stories about shoppers camping out all night in the cold and fighting for discounted flat-screens and think, "gosh, this really must be something special if people are so excited about it! Maybe I should go too." It doesn't really seem as though Black Friday can be used to gauge economic growth.
Nicola makes a good point. One day of sales wouldn't make much of a difference in the economy anyways. Even "Cyber Monday" wouldn't be able to help the nation come to a full economic recovery. How could people find time to shop on a weekday? Instead of having a one day sale, I think these sales should go up for weeks. This way, people would have enough time to get everything they need and violence wouldn't be an issue. This would be a win-win for the economy and the people.
I wonder if the statistics are adjusted for inflation. Could part of the increase in spending be due to inflation?
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