Is Black Friday Fading to Black?

This year I might finally get my Christmas wish. Every year I ask for it, and yet I continue to be disappointed. But this year it looks like it might be starting to happen.

And that gift… is the decline of Black Friday madness.

Besides inciting violent stampedes to grab half-priced flat screen TV’s, it’s just a bad business strategy. Offering deep discounts and incentives to holiday shoppers who may never return unless you have another major sale is not the way to build a loyal, high-value customer base. It’s a symptom of the antiquated product-centric strategy I’ve been railing against for years.

What Retailers Should Be Doing

What retailers should be doing is identifying their highest value customers, catering to them, and finding more like them. Ushering hordes of deal-seekers into your stores when they’re over-crowded and your staff is spread thin not only provides them with a poor experience, but will also turn off your high-value customers. When the smoke clears, you may have lost some of them. Potential customers who are lured to your store for the first time during this period may also be turned off permanently.

Why Black Friday is Fading

I’d love to say that retailers have seen the light and are adopting a customer-centric approach that eschews a reliance on deep discounts and holiday gimmicks. However, it seems that customers have been conditioned through online shopping and regular discounting to seek deals throughout the year rather than on a single day or during a single week. They’re also increasingly put off by the frenzied and harrowing in-store experiences they encounter. While the reasons behind the decline might not be the ones I would have hoped for, this trend is a good thing for businesses nonetheless.

What I Wish for the Future

I hope that this trend will continue. I hope it will also bleed over into other crazy and ineffective promotional activities that companies do that erode the margin structure of their businesses. Perhaps more retailers will see the brand-building value in re-evaluating their strategies for Thanksgiving and Black Friday like REI is doing again this year by remaining closed on both days. Savvy retailers will turn to other year-round strategies that cater to their high-value customers and are actually enjoyable for those people to take advantage of.

About the Author: Peter S. Fader is the Frances and Pei-Yuan Chia Professor of Marketing at the Wharton School of the University of Pennsylvania. His expertise centers around the analysis of behavioral data to understand and forecast customer shopping and purchasing activities. In addition to his various roles and responsibilities at Wharton, Professor Fader is also co-founder of Zodiac, a predictive analytics firm that aims to make top-notch customer valuation models and insights easily accessible to a broad array of data-driven organizations.