Black Friday 2018: Amazon, Target, Walmart and other major retailers compete to attract buyers



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For stores, Black Friday looks like the survival of the fittest this year. The day after Thanksgiving, we know that customers rush to retailers, but large traders go bankrupt or closing shopping malls, retailers rush to find buyers.

These "special offers" are still there, as megastores like Kohl's, Target and Walmart are trying to create scarcity and excitement from the "top 100 customers to buy a flat screen TV". But online shoppers may find that these prices are not so special. In fact, they may have already purchased offers prior to Black Friday, which started early november.

"Historic Black Friday is down," said David Silverman, analyst at Fitch Ratings. "This is no longer as necessary as before."

The American shopping frenzy after Thanksgiving day began with a bang – literally sometimes – while frenetic customers were celebrated by toppling security guards and fighting over to seize toys and electronic products . But now, the drama (and the media coverage) is likely to be more muted.

"There will always be a slight increase in sales that day," predicted Jeff Holzmann, general manager of Iintoo, a commercial real estate company. "But you probably will not see elbows flying."

Big names are erasing

The brick and mortar retail sector suffered significant damage. Stand-alone stores such as Toys R Us have disappeared and many "pillar stores" in shopping centers, such as Sears, are closing down. Other retailers like Gap, J.C. Penney, Lord & Taylor, Macy's and Michael Kors are reducing their locations. Same renovation line Lowes closes many stores in the United States and Canada, while offering a 40% discount on some devices.

This is a scary period for retailers, in part because of a phenomenon called "cascade" or unplanned markdowns. "All companies have been preparing for promotional markdowns during the Christmas season and they will grow as you approach a holiday," said Silverman, of Fitch. "But unanticipated markdowns occur when the trader at the other end of the mall closes, or simply has to dispose of his stocks, which have run out of life. world must reduce its prices and continue to lower them. "

Savvy merchants have already done so that's why the Christmas shopping season has begun earlier. The hurry is to beat the "outdated retailers" who still believe that Black Friday is the busiest day of a buyer's credit card, said Jonathan Cherki, CEO of ContentSquare, a software vendor for retailers .

The big chain stores had the habit of believing that the holiday after Thanksgiving was special because it was the date on which their balance sheets finally went from red (losses) to black (profits). Now they simply see it in a continuum that begins just after Halloween and continues throughout the holidays – as more and more customers click on online sales sites even though the turkey is still on the table .

This trend continues until New Year's Day. Retailers are getting returns and, they hope, are selling a few more items at the same time. That's one of the reasons why Kohl's declared that he would accept Amazon's returns, Silverman said. "Once you have them in the store, there is a 25% chance that they will buy something else."

Enter the "Ama zone" or perish

As America's largest online retailer, Amazon remains the elephant in the room and shopping mall stores must enter the "Ama Zone" or perish, analysts said. One solution is to dispel the traditional myth of Black Friday that only a certain stock is available and you have to buy it that day to get that price.

The keywords are "virtual inventory," said Frank Poore, CEO of Commercehub, which helps online businesses manage their inventory. Savvy shoppers can always search online, find the toy or electronics they want and continue to click until the price drops. Retail stores must provide the same services as online retailers, for example by offering to retrieve items that are not in store at another store and by providing immediate home delivery once these "top 100" are gone. Otherwise, they will lose customers to someone else 's benefit.

When Amazon raised the stakes by offering free shipping on holiday orders, other retailers had to do the same. The chief technology officer, Alex Shvarts, of FundKite, a business finance platform, said that Black Friday's store traffic was shrinking by 5% to 10% annually, while UPS, which has shipped about 750 million parcels during the 2017 holiday season, expecting an increase in this number. the same rate. The US Postal Service is planning more business – a billion parcels this holiday season.

To survive, stores need to be more user-friendly, while shopping centers must provide services like free parking or valet parking, as well as amenities such as free coffee, babysitting service, foot massage and immediate use of the product, analysts said. They must do what an online store can not do – and respect the customer.

"Black Friday has never been an experience appreciated by most people," said Holzmann, of Iintoo. Silverman of Fitch is in agreement. "Customers want to shop smart, not with punches." The millennial generation in particular has different buying habits. "They would prefer to have something personal and done by hand rather than a mass-produced article abroad," FundKite's Shvarts said.

Fewer competitors

Retailers who have survived wars with Amazon – and each other – have hope. As their numbers diminish, they will see less and less of these "cascading markdowns" as most losers will already be bankrupt.

And the rest will look for the inventory and the marks of those who failed. Kroger already offers 600 Toys R Us' ephemeral store 'with Toys' mascot Geoffrey the Giraffe and Walmart expands its huge toy department.

Many retailers could actually end up "in the dark" this Friday after all.

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