Given that today is Black Friday, it's probably appropriate to delve into the current meaning of this calendar point, which might go down as the most anachronistic date that anyone bothers focusing on any more. At one point in retail history, it was the busiest shopping day of the year, the day where retailers' financial ledgers started to make money for the year, to go from being in the red to being in the black. But hasn't been the case for quite some time.
Complicating Black Friday's reality is the emergence of the marketing creation called Cyber Monday, which happens three days after Black Friday and was supposed to be the busiest date on the calendar for E-Commerce shopping. Unlike Black Friday-which at least used to be true-Cyber Monday has never been the busiest online shopping day. That usually happens in mid-December, where there's a brief intersection between the procrastinators and the early bird shoppers.
This year, the overall shopping season is likely to show a small (perhaps 1-2 percent, maybe 3 percent) increase for all of retail, although some are even predicting a more dismal season, which is fairly unbelievable given how horrible last year's holiday season was. That small increase is compared with last season, not compared with a normal season. That means that even a 2-3 percent increase is still a sharp drop from what it should be this time of year. Black Friday very quickly showed what can go wrong when Web sites are deluged, with today's activity showing tons of glitches from chains including Sears, Kohl's, Lowe's, Staples, ToysRUs, Home Depot and Victoria's Secret.
But more importantly, those figures are rather misleading because there's a much bigger trend here. Behind those weak retail figures is evidence of a huge strength in online. How huge? Amazon.com, the world's largest pure E-Commerce player (the only online player that comes close is EBay and they're not as much of a pureplay retailer as is Amazon), reported in October a staggering 69 percent increase in third-quarter profit on an almost-as-stunning 28 percent increase in quarterly net sales. But what's even more interesting for this holiday is Amazon's prediction for the fourth quarter, which is dominated by the holiday season: "Net sales are expected to be between $8.125 billion and $9.125 billion, or to grow between 21 percent and 36 percent compared with fourth quarter 2008."
Is Amazon an outlier, the exception that makes the rule? Not likely. A week ago, the U.S. Commerce Department showed third-quarter E-Commerce sales increases of almost 4 percent. To put this into context, we need to ask some questions. Are these online sales being taken from physical stores or are they new sales that wouldn't have happened otherwise? Are they mere shifts from physical to virtual parts of the same chain, such as money being taken away from Target stores but being poured into Target.com? Or are these sales from tons of little E-Commerce storefronts that are collectively taking money from huge department store chains?
But enough of these big-picture economic thoughts. Let's get right down into the consumer's wallet. What does any of this have to do with Black Friday and retail sales and how consumers should get the most for their dwindling dollars? Plenty. Despite all of the talk of merged channel and one big retail family, the truth is that most retail E-Commerce operations are typically fighting more with their in-store counterparts than they are with their competitors. In-store managers will be panicking this season (and rightly so) and the idea that a consumer will instead buy from that chain's online arm is of zero consolation.
That means much more leverage for the consumer bargain-hunting. Online and mobile sites will likely be promoting better deals, but they won't bargain or negotiate. In-store, however, almost certainly will. Go into the mall in December, carry a visible Web-surfing cellphone and talk with management if that's the best price they can offer. They click away into the phone, smile and look up and ask, "Are you sure?" The music and decorations may make some feel like George Bailey, but it's the one who negotiate like Scrooge who will end up with the merriest-and most cost-effective-holidays.
By Evan Schuman
Special to CBSNews.com