INSIGHTS
- The first Black Friday had nothing to do with the day after Thanksgiving or shopping but was instead a term coined to describe a stock market panic caused by plunging gold prices.
- Black Friday was first associated with shopping on the day after Thanksgiving when newspaper writers used the term to describe the huge crowds in stores in the 1960s and was later associated with the profit stores make.
OVERVIEW
OVERVIEW
The first Black Friday, however, had nothing to do with shopping and everything to do with gold prices and a stock market crash in 1869. In relation to shopping on the day after Thanksgiving, the term Black Friday was first used by police officers to describe the large crowds rushing into stores to take advantage of the sales offered. Today, Black Friday is a day of sales.
Stores offer inflated, sometimes even huge discounts on select merchandise to draw customers into their stores. These sales result in profits in the stores, which encourages more promotions and sales in the stores for the next year. Black Friday has been considered an official retail holiday since the 1990s. Since 2002, Black Friday has been the largest, most profitable shopping day of the holiday season every year.
Stores offer inflated, sometimes even huge discounts on select merchandise to draw customers into their stores. These sales result in profits in the stores, which encourages more promotions and sales in the stores for the next year. Black Friday has been considered an official retail holiday since the 1990s. Since 2002, Black Friday has been the largest, most profitable shopping day of the holiday season every year.
HISTORY OF BLACK FRIDAY
The term Black Friday was first used in 1869 to describe a stock market panic caused when two Wall Street investors, Jim Fisk and Jay Gould, hatched a plan to buy as much gold as possible in order to drive the price up. They would then sell all of their gold at the new, higher price and make a huge profit. The plan was discovered and subsequently fell apart, resulting in both a stock market plunge of 20% and a halt in all foreign trade for that in one day.
Black Friday was not used again to describe anything until the 1950s when it started being used by police officers in Philadelphia to describe the throngs of tourists, football fans, and shoppers that would flood the city the day between Thanksgiving and the Army-Navy football game. It was also around this time that many workers began calling in sick on the day after Thanksgiving. While some may have been legitimately sick, others used the day to get a head start on their holiday shopping. As a result, exasperated employers started making this day an extra paid holiday allowing more people to use the day for shopping.
Black Friday, which was already being used to describe the Friday after Thanksgiving started to be used in other parts of the country. Retailers initially tried to change the name from Black Friday to Big Friday to remove the negative connotation associated with the word from its past use, but they were unsuccessful. The first recorded, official use of the term Black Friday to describe the day after Thanksgiving occurred in 1966 when Earl Apfelbaum, a rare stamp collector, wrote about it in an ad in The American Philatelist, a stamp collectors' magazine.
Since store owners could not change the name to something more positive, they chose to embrace it. In accounting, black ink is used to record a profit while red ink is used to record a loss. Playing off this, store owners and merchants decided to advertise and emphasize the profits their stores and businesses have made, and continue to make, on Black Friday. They have succeeded and, in the process, have turned Black Friday into the biggest shopping day of the Christmas shopping season.
BLACK FRIDAY SALES
Black Friday is a day of sales for consumers. In 2016, 101.7 million people shopped on Black Friday alone, and a total of 137 million people went shopping over the course of the four-day Black Friday weekend The average savings on Black Friday equals 37% and shoppers take advantage of the savings. Since 2002, Black Friday has been a very profitable day for stores and merchants. Total sales in 2002 equaled $416.4 billion and rose each year until 2007 when they equaled $525.9 billion. That was an increase of 24% from 2002 through 2007. This percentage is not included in the source, it was calculated from adding the individual increases for each year that was given. In response to the recession that began in 2007, total sales in 2008 dropped 4.6% equaling $501.7 billion. This decline represented a drop in average shopper spending as well. In 2007, the average shopper spent $755.13. In 2008, that number dropped to $694.19. The total sales began increasing again in 2009. The gain was very modest, only 0.2%, equaling $503.2 billion in total sales and $681.83 spent per shopper. This was the beginning of another upward trend, however, and total sales have continued to rise each year since. By 2016, total Black Friday sales had reached $655.8 billion equaling $935.38 spent per shopper. That was an increase of 3.6% over 2015's total sales of $626.1 billion and per shopper spending of $935.58. Sales are expected to continue to rise with the National Retail Federation (NRF) forecast for 2017 showing 4.0% growth resulting in expected total sales of $682 billion and per shopper sales of $967.13.
Black Friday is not only good for sales, it is also good for seasonal employment. According to an NRF survey, retailers are expected to hire 500,000-550,000 season employees for Black Friday and the remainder of the holiday season.
BLACK FRIDAY ONLINE SHOPPING
The increasing popularity of online shopping is changing the landscape of Black Friday sales. In 2015, the number of shoppers who shopped online was roughly equal to the number who shopped in stores. In 2016, the number of online shoppers exceeded the number who shopped in stores. An estimated 108.5 million Americans shopped online in 2016 while an estimated 99 million shopped in stores.
CYBER MONDAY
Cyber Monday started as an alternative shopping day used by both shoppers who would rather shop online instead of in stores and those who couldn't find what they wanted in the stores. The term was first used by Shop, a division of the NRF who found that many people would shop in stores over the weekend, the shop online for anything they weren't able to find. The first advertised Cyber Monday sales started in 2005 and soon went global. Sales are offered not just be American retailers but by those in countries such as Canada, UK, and Germany. In the US, Cyber Monday is becoming more profitable each year. In 2006, Cyber Monday sales equaled $610 million. By 2011, Cyber Monday sales had increased to $1.25 billion. Last year, shoppers spent over $3 billion on Cyber Monday, making it the biggest e-commerce sales day of the year in the US. Over 600 retailers now offer sales on Cyber Monday. Shop.org has even created an official Cyber Monday website, CyberMonday, as a place where retailers can advertise their sales.
CONCLUSION
Black Friday wasn't always associated with the day after Thanksgiving or even with shopping and sales but is now biggest shopping day of the holiday season. Sales have risen steadily since 2009 and are forecast to continue rising, equaling an expected $682 billion in total sales in 2017. Cyber Monday came about as a result of Black Friday. Shoppers who couldn't find what they wanted in stores on Black Friday or simply didn't want to go into the stores would return to work on Monday, log online and buy what they wanted. Total sales on Cyber Monday have grown from $610 million in 2006 to over $3 billion in 2016. Together, Black Friday and Cyber Monday help make the holiday shopping season a profitable one.