General

Black Friday: why are good deals such a big deal?

Annie Charalambous, Thursday, 26 November 2020

MKT-7036_BlackFriday_blog


Black Friday is, for most retailers, the busiest shopping day of the year. It typically marks the beginning of the Christmas shopping season in the US, falling on the day after Thanksgiving. 

The term was first used by Philadelphia police in the early 1960s in reference to the congestion and chaos of thousands of people flocking into the city for its annual Army-Navy college football game over the Thanksgiving weekend. Retailers decided to capitalize on the influx of people by offering huge discounts, and before long, other states started to get in on the action. Eventually, the term would be closer aligned with retailers turning a profit, i.e. going from ‘in the red’ to black.

For decades, Black Friday in America remained controversial – within just hours of celebrating all that they were thankful for, families would set up camp outside massive retailers like Best Buy, Walmart, and countless others to be first in the door. Despite the horror stories of stampedes, violence, and ‘out of stock’ signs, with the boom of ecommerce came a new beast. 

Today, Black Friday isn’t so much a one-day event as it is a weekend or even an entire week, and promptly followed by Cyber Monday. In 2020, shopping online is not only quicker and more convenient, but in many countries where a lockdown is enforced, it is the only way to shop.

Companies like Amazon benefit the most, with the company setting new records with nearly every shopping event it holds. Prime Day, moved from July to October this year, saw sales surpass $3.5 billion in just two days. That’s a 60% increase from last year and its best one on record since the event started in 2015 – to put that into context, Prime Day in 2019 surpassed both Black Friday and Cyber Monday (2018) combined. 

Amazon is a powerhouse – in 2019, it had 45% market share of ecommerce spend in the US. This year, that’s expected to increase, according to Statista. AMZN is up over 72% YTD, and its market cap has increased by over $650 billion: read that again, $650 billion. Amazon didn’t even reach a $650 billion market cap until 2018, and in 2020, during a pandemic that’s seen millions of people lose their incomes, Amazon has added $650 billion to its value. 

By comparison, Walmart, America’s largest brick-and-mortar retailer, is worth $430 billion.

Share article