The end of November ushered in two major retail events sweeping across the United States – Black Friday (November 23) and Cyber Monday (November 26). They opened the longest holiday shopping season in the U.S., which this year will last 32 days. Retailers use these events to measure buying activity and forecast how much success this major shopping period of the year will pour on their business. Our observations suggest that so far the American buyer has not recovered from the crisis, despite the encouraging U.S. statistics.
Black Friday is the Friday immediately following Thanksgiving, which falls on the 4th Thursday of November. The origin of the name “Black Friday” is explained in various ways. Some say that it dates back to the 1960s in Philadelphia, where the townspeople so dubbed the first Friday after Thanksgiving, due to regularly occurred giant traffic jams on that day, as all rushed to the stores to shop. Others claim that it came from the accounting practice, since on that Friday companies always saw their profits sky-rocket, which were then registered in black ink under the American accounting rules as opposed to losses put down in red.
Cyber Monday comes on the first Monday following the weekend after Black Friday. On this day, all kinds of buyers are attracted to various online bargain sales.
The most popular ways to lure customers to stores include huge discounts (up to 90%), extended opening hours (some stores keep their doors open late at night), offering a limited amount of some goods at a super-low price only to first-come buyers, as well as extending bargain sales onto the entire next week. A whole week of discounts this year was announced by Amazon, eBay, Macy's, Target, Walmart, JCPenny and many other major retailers.
Jewelry retailers usually do not pin high hopes on Black Friday - their sales peak comes closer to Christmas. Therefore, most jewelry stores do not offer holiday specials or discounts at this time. However, they also have a good chance to increase sales due to the large foot traffic generated by buyers’ shopping rush.
Some jewelers, however, decided to move away from the stereotypes and entice Black Friday shoppers running breathtaking promotion hits. The informal hit parade list drawn by Rough&Polished is led by Criterion Diamonds in Hiram, GA, mentioned by the JCK Magazine. Each buyer happened to drop into this store from 9 pm to 2 am on Thanksgiving night was given a free loose diamond 0.1 carat in size and valued at nearly $140. All in all, 56 people were lucky to become happy owners of such diamond gifts.
The second place is held by the New York jewelers, who resorted to effective but costly tactics. Each buyer, who spent at least $1,499 or more for goods purchased at Sondra's Fine Jewelry and Northeastern Fine Jewelry got the latest model of iPad as a gift. The cost of a new model of this device is $500 and up.
Jeff Weiss, CEO of Glennpeter Jewelers told the Business Review that he had spent $50,000 on iPads and iPhones to have them ready for customers.
An advertising hit does not have to be expensive to win over consumers. According to JCK, Texas-based jewelry retailer Lewis Diamond & Timepieces came up with an idea to hand out free donuts and coffee to people standing in line (!) at the neighboring Best Buy to make their wait more comfortable. Although Lewis’ sales did not go up that day, because it was closed, the move helped to make the firm’s name more recognizable and secure a positive association for the future.
According to U.S. statistics, special promotion events and activities carried out by retailers on Black Friday and Cyber Monday were successful. American buyers spent more than $1 billion shopping on Black Friday, which is 26% more than last year, according to comScore, a leading online data analyst.
During the four-day weekend shoppers left more than $59 billion at stores, an increase of 12.8% compared to 2011.
As reported by the National Retail Federation (NRF), only 15% of consumers reported purchasing jewelry. However, on Cyber Monday, when overall online sales reached $1.47 billion, jewelry and watches turned out to be among the five most popular categories. According to comScore, sales in this category increased by 17% compared with a year earlier.
This year, there were more Americans visiting stores on the sell-out days, their number going up 8.2%, according to ShopperTrak, which gets its data from the foot traffic counters installed in stores across the country. Total attendance reached just under 600 million - almost two times more than the entire U.S. population. Most of the buyers visited two or more stores during one and the same outing.
Still, statistics do not always reflect the real market situation. Besides, the main task of the retail industry these days is to perk up people’s mood and confidence, so that they were not shying away from shopping. Therefore, we have to interpret official data taking these aspects into account.
The correspondent of Rough&Polished spent Black Friday, Saturday and Sunday right "in the field" observing the work of small retailers that sell jewelry and other goods in San Diego, California. According to the survey taken on these days, sales were even lower than last year. In addition, many consumers have reduced their budgets for holiday shopping, complaining about the poor state of the economy and uncertainty about the future.
However, the NRF anticipates that holiday sales in U.S. brick-and-mortar stores will increase by 4%, whereas online sales are expected to improve and grow by 12% compared to last year. Jewelers also have high hopes that there will be no snow until Christmas since their customers are known to be inclined to stay at home when it is snowing.
Olga Patseva, Editor in Chief of the American Bureau, Rough&Polished
