Black Friday is dead. While the death might seem to have been breathtaking and quick — a drastic 11 percent drop in sales over Thanksgiving weekend — it was actually a long time coming, and the scars from the experience promise to shape retail’s future for a long time to come.
In 2012, RSR declared Black Friday to be dead. My personal argument ran like this: consumers have total transparency into Black Friday prices weeks, if not months, in advance. This means there’s no incentive for consumers to wait for Black Friday if they find a better deal earlier. And with all that time and visibility to find the best deals in advance, consumers discover that a lot of Black Friday deals aren’t that great to begin with — not because the prices aren’t low, but because the products tend to be low rated or lower-quality versions of what they really want. The end result is that only uninformed or desperate shoppers are enticed out early.
Fast-forward to 2014: The same impulse that led retailers to open earlier and earlier on Thanksgiving also led them to offer Black Friday deals online well before the actual date. The net result? An 11 percent drop in sales during Black Friday weekend. Amid the rush to rationalize this number, it’s easy to become numb to just how jaw-dropping that number is. And how much this changes retail.
When RSR declared Black Friday dead in 2012, we said that the shopping event was the last gasp of a dying store-based model. I think this realization came home to roost in 2014 … and it’s going to have the biggest impact on retail in 2015. There are plenty of retailers out there that have started down the path of “omnichannel transformation,” but I know for a fact that a lot of it is, if not exactly lip service, then at least being done because everyone else is doing it. In other words, they’re not really believers.
How do I know this? Because I hear from retailers all the time about how much their executive team is arguing over what they’re supposed to be focused on next in their omnichannel priorities. And honestly, if they really believed in the transformative impact of omnichannel, there would be no argument: they would be 100 percent focused on putting the customer at the center of their business, and letting her needs drive their priorities.
This year’s Black Friday has struck fear in those nonbeliever hearts. It’s a wake-up call, loud and clear: You can’t succeed in retail by trying to preserve old ways of doing business, including and most especially the store experience. For many retailers, that means that upwards of 90 percent of their business is at risk, which isn’t just scary, it’s heart stopping.
The pressures are relentless, and they’re not going away. When I talk about omnichannel transformation, I’m not talking about aligning channels; I’m talking about business model change — fundamental, foundational, all-encompassing, from marketing to channel operations to supply chain to merchandising and everything in between. To try to minimize its impact is to try to stand on the beach in the face of a tsunami.
Retailers have a lot on their plates, and 2015 is no exception. It’s all too easy to get lost in the weeds of change and forget the big picture. Black Friday was a reminder of that. However, if the only thing that retailers manage to take away from 2014 is that omnichannel is real and you can’t hide from it or preserve old models or ways of thinking, then I think the industry will have made real progress.