What a difference a few hours makes …
During the first round of store visits to observe the midnight opening of several retail stores (for electronics at least), the activity was intense. There were long lines and strong buying activity for TVs, notebook PCs, smartphones and tablet PCs.
After retiring for a few hours at 2 AM, and returning to revisit the stores at 7 AM, the situation had changed dramatically. With the first wave of buyers snapping up the door-buster promotions, the activity at many retail locations had almost vanished. Parking lots in front of Target, Best Buy and Walmart were about 10% full compared to over-flowing at midnight. Many of the crammed stores were mostly empty with store employees milling about tidying displays and chatting about the rush. Interestingly, many of the floor-stacked door-buster items remained in heavy inventory on the floor. Was this a boom followed quickly by a bust?
A 32” Emerson LCD TV for $188 at Walmart (photo below) still had over 100 units available, and many of the other TV specials were still well-stocked at 7 AM, 7 hours after going on sale. A 40” version was still trickling out, although most supplies were gone. In general, it seemed the 32” deals were not as strongly favored by shoppers as 40” and larger sets. One Best Buy had 20 units of the $199 42” Sharp LCD TV, as opposed to the 10 advertised, they sold out within an hour, and the 60” Sharp LCD TV for $799 sold out right at 7:30AM.
After seeing a few more slow stores from 7 until about 10 AM, traffic started to pick up again as sleepy Thanksgiving revelers awoke and headed out to find many of the specials still available. Could it be that those camping out in front of the store only needed to do so for the top 1 or 2 promotions? Would they have chosen to wait if they had known?
It seems as though there are two classes of consumers for Black Friday: those willing to brave the cold and long lines in the name of tradition, and those content to miss the best deals, but still accomplish Christmas shopping at substantial discounts. For the latter, plenty of deals remained, and for the few who came out at the previous year’s opening times around 4 or 5 AM, the shopping was great with almost no crowds. The strategy to open early will have to be analyzed later by examining sales and store traffic, but at least initially, it seems it wasn’t necessary.
Overall, TV demand looked strong. We expected to see more in the way of 40”+ promotions for TVs, and the huge volume of 32” inventory still remaining later in the day is perhaps an indication that consumers indeed want larger sizes. The shipment share of 32” LCD TVs was much higher in Q3’11 for North America than we expected, so hopefully the later crowds will help clear the inventory of smaller sizes, but it might have been an error to lean so heavily on those 32” promotions when the pricing wasn’t drastically different from a year ago.