2016/09/06

Why big box retailers are really releasing Black Friday deals earlier each year

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This post is co-written by Matthew Hudak
It’s not even Labor Day and already there are Black Friday products to consider thanks to Walmart’s release of the hottest 25 toys for the holidays on September 1st. Plenty of people wonder why retailers have been pushing holiday deals earlier each year, and no, it’s not to ruin everyone’s fall with pre-emptive Christmas concerns. If anything it is our own fault for participating. In an age where everyone is too busy and all our actions are data points to learn from, retailers that release holiday sales information earlier than their competitors increase their exposure to customers and in doing so, gain more time to gather information on how to best prepare for the coming months.
To see if the early bird really does get the worm
It’s no shock to anyone that shops for Christmas that Black Friday deals are coming out sooner and sooner. The reason is because it appears to be working. Toys ‘R’ Us released its “2015 Holiday Hot Toy List” last year on September 9th. That holiday season it saw a same-store sales lift of 2% compared to 2014. This was the first time in four yearsthat the company generated any year-over-year holiday increase at all. It’s impossible to say whether or not this growth was at all due to the timing of the release, but when the cost of releasing this information is zero, it doesn’t hurt to try. It’s clear that Walmart thinks that reeling customers in early is the way to go, because it’s advertising its holiday layaway plan alongside the top toys, an option that will be available as early as September 2nd. At the very least this strategy appeals to the sort of shopper that just wants to get their Christmas shopping over with as soon as possible.
Because nobody knows what shoppers want better than the shoppers themselves
September may seem early even for this year, but this actually already happened in 2015 when Disney unveiled its product line for Star Wars at retailers on September 4th. Shopper reactions to this unveiling gave retailers early indicators of what to actually stock down the line. Generating demand for the “hottest” toys of the season is both an art and a science, and by releasing this information to the public sooner, retailers and their supplier partners get more data upon which to limit customer frustration from crucial out-of-stocks. This tactic worked out very well and Star Wars products were enormous sellers during the season.
Despite the impending arrival of the Rouge One spin-off, Star Wars is no longer the clear focus of this year’s holiday merchandise. The strategy employed last year was clearly a helpful one, especially when you consider applying it to an even broader range of toy types and licensed merchandise. Without a barrel full of fish to shoot, gauging customer demand accurately will be even more important to retailers this year. Every year there are the usual suspects that shoppers are interested in—consumer electronics, video game consoles, and toys. This year toys will likely take up more of the gift giving budget. Tablet sales are expected to decline by 12% for the year. Television sales will fall by 1%. Smartphones, the ever popular electronic device of choice, will only grow by 3%. And video game consoles, a direct competitor to toys, are expected to decline by 1.5 %. Traditional toys, the exception, are expected to see sales grow by 5% throughout 2015, making them a prime category to get right when it comes to merchandising this holiday season.
More time means more choices for the shoppers and fewer decisions for the retailers
If we all wanted the exact same things for Christmas, the holiday shopping season would be a lot simpler. Unfortunately, people are more complicated than that. Big data was supposed to solve all of this but the sample size doesn’t matter when there isn’t enough time to collect the information that’s important. Retailers are solving this issue the old-fashioned way—by extending timelines. Whether they like it or not, this gives shoppers more choice surrounding when to shop while helpfully narrowing the decisions needed to enact a successful merchandising strategy for retailers. Everyone wonders if there will ever be a backlash for starting the holiday season too early, but so far it’s too important to not start now.
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