Wednesday, December 4, 2013

The other side of Black Friday.

What no one talks about are the days immediately following Black Friday.  By Sunday, the frenzy has worn off and it is a normal day.  Monday and Tuesday are usually abjectly horrible.

I drove to work yesterday and the entire street had empty parking places.  This is unusual at any time of year.  But there it was.

The store did about half normal business yesterday, and I expect it won't do much better Tuesday.  (It did worse...)

When you take the much lower sales in the week after Black Friday, take out the day of Thanksgiving itself, and average it out, it doesn't look all the impressive.

The Cold weather isn't doing us any favors.

Meanwhile, I commented to my manager, Cameron, that this was the season when we would start missing shipments.  Sure enough, this week's shipment didn't arrive.  (The customer should see it on time, but we have to scramble).  I looked it up online and they had left a box on the warehouse floor.  Probably some temp didn't feel like loading it that minute. 

See, this is when we get 'temporary' workers, 'substitute' drivers, etc.

Big business likes to brag about how "efficient" they are -- but what they mean by efficient is cheaper.  What I mean by "efficient" is getting the job done correctly.  Those are opposite things.

But the public buys into the "efficient" myth.

I don't buy the bad weather argument.  I don't buy the increased traffic argument.

That happens every year.  It shouldn't be a surprise -- they should find a way to deal with it.  It isn't an act of god when it snows.  But it happens each and every year, costing us who knows how much.

But UPS saved a few pennies.

This is one of the reasons that I don't go crazy with discount sales.

If I do three times normal business on the Friday and Saturday following Thanksgiving, and then follow up those with a week of half normal business -- basically, not much has happened. 

I'll give you an example -- and really, this is an example of how misinformed the media can be about business.  Really disgraceful reporting.

I was reading an article about half-price sales.  The magazine used the example of a business that did 16% better business for 10 days at half price.  The same business then did 8% less business over the next two 10 day periods.  The implication of the article was that the business had done just as well as normal.

But this is leaving out cost of goods.

First of all, my cost of goods is more than 50%, so under the above scenario I actually lost money on the supposedly higher sales -- and then proceeded to make 8% less the rest of the month.

Of course, this is all assuming that the "Sale" is for real -- I think in the case of most big box stores it is a manipulated figure, and pretty much bogus.

Christmas is undeniable better -- but it all comes down to those last ten days, and that seems like Russian Roulette to me.  One of these days, something will go wrong, and everyone will be in shock.
But it hasn't happened yet, and you can't operate a business on worst case scenarios.  You have to take a calculated risk.

This year, my calculated risk was to completely stock the store, top to bottom.


Andy Z said...

I think you kind of ignored the fact that "sales" at most big-box stores are a promotional gimmick. Sure, you'll go to Best Buy to get those cheap Blu-rays (perhaps sold at a loss, albeit a small one) but they bet that a predictable number of customers will then buy a few other items at a profitable price. Someone somewhere made a calculation that the profits from those additional "regular" purchases more than covers the losses on the sale items. So they end up deeper in the black than they would have been, and the cheap Blu-rays are what enticed you to the store in the first place. Sales work at that kind of scale.

And you're not immune. Your sales might be one-off personal offers or the regular discount you generously offer us shelf holders, but you still have 'em. They are a reason that I buy from you and not from the internet. (Not the only reason, of course.)

Promotional gimmicks work. Why else would you put that table out in front of the store?

Duncan McGeary said...

I did sort of mention that. I think a lot of these deals are baked into the pie from the start.

"Promotional gimmicks work."

Some of them, sometimes, to some extent. :)