Every Day Will Be Like a Holiday: Thanksgiving and Black Friday By: Gabriel PotterMBA, AIFA® 2015.11.23

Alibaba – the Chinese e-commerce answer to Amazon.com - shook up the news a few weeks back with their made-up holiday “Single’s Day”.  Their records for sales were up 60% from the previous year, with $14.3 billion in a single day.  Reuter’s points out that this number is bigger than American holiday shopping event days – Black Friday and Cyber Monday – combined.  I had wondered if this fact had stoked the competitive American spirit, since I noticed that several “Black Friday” sales had already started this week in brick-and-mortar stores as well as Amazon’s marketplace.

Here’s my next question:  are these purchasing event holidays really creating business or are these zero-sum games?  In other words, if there were no Black Friday sales, would the same amount of Christmas shopping still occur over the month? 

Certainly, I understand the desire to get a fair amount of your Christmas shopping taken care of in one fell swoop.  Similarly, the retail stores put out large incentives and substantial discounts on these days to entice a frenzy of buying.  The high energy atmosphere of being a door buster can also contribute to the excitement.  With a little bit of thought, I realize that if retailers en masse decided to forego the huge discounts and goofy promotions that Christmas holiday shopping revenue and profits might even out over the month in aggregate.  However, the individual stores which offered discounts and special events would be taking sales from their sluggish competitors.  In other words, there are competitive forces which force retailers to continue these promotions.  Worse, these sales and seasonal promotions will creep earlier and earlier each year as stores try to catch the first spenders.

So, do these made-up holidays actually increase sales?

Join in the conversation at twitter.com/Westmconsulting

To read more on Alibaba’s made up holiday “Single’s Day” click HERE

Gabriel Potter

Gabriel is a Senior Investment Research Associate at Westminster Consulting, where he is responsible for designing strategic asset allocations and conducts proprietary market research.

An avid writer, Gabriel manages the firm’s blog and has been published in the Journal of Compensation and Benefits,...

More about Gabriel Potter
Sign up for our Newsletter
Sign up for our Newsletter