What is Black Friday?
– Black Friday is the shopping day that falls immediately after the U.S. Thanksgiving holiday (Thanksgiving is observed on the fourth Thursday of November). It has become synonymous with steep discounts, heavy store traffic, and a surge in online and in-store promotions that formally kick off the holiday shopping season.
Key definitions
– Discretionary spending: money consumers choose to spend on non-essential goods and services (gifts, electronics, leisure).
– Doorbuster: a deeply discounted item offered to attract a large number of shoppers.
– Loss leader: an item sold at or below cost to draw customers in, with the expectation they will buy other, higher-margin items.
– Margin (gross margin): selling price minus cost of goods sold; often expressed as a percentage of selling price.
Quick summary (what matters)
– Retailers use Black Friday to reduce excess inventory, advertise high-profile bargains (especially electronics and gifts), and try to drive additional purchases once shoppers are in-store or on a website.
– Sales and traffic around Black Friday are closely watched by analysts and economists as a short-term indicator of consumer confidence and discretionary spending.
– The modern Black Friday grew from decades-old post-Thanksgiving sales and now often stretches across the whole weekend into Cyber Monday (an online-focused shopping day) — sometimes called the Black Weekend.
Origins and history (concise)
– The phrase has more than one origin story. One common business explanation ties the name to bookkeeping: firms traditionally recorded losses in red ink and profits in black ink, so a major profitable shopping day could put retailers “in the black.”
– An older, local origin dates to Philadelphia in the 1950s, when police and store workers used a negative-sounding term for the chaotic crowds that swelled the city the day after Thanksgiving. The phrase later spread nationally and acquired more positive retail connotations.
– Separately, “Black Friday” also refers to a famous financial panic in U.S. history (September 24, 1869) when gold prices collapsed after a period of speculative activity.
How Black Friday has evolved
– For decades, the day after Thanksgiving was a natural time for retailers to offer post-holiday sales because many people had the day off and could shop.
– In the 2000s and 2010s, retailers pushed the event earlier and expanded hours. Some big retailers began opening on Thanksgiving evening; others extended promotions online and across the weekend. The result is a multi-day sales event rather than a single calendar day.
– Retail marketing for Black
– Retail marketing for Black Friday shifted from single-day in-store promotions to coordinated omnichannel campaigns that mix in-store “doorbusters,” online flash deals, extended weekend discounts, and targeted email and app notifications. Retailers optimize inventory and pricing using data analytics and often stagger promotions to keep consumers engaged across several days.
– Related events and terms:
– Cyber Monday: the Monday after Thanksgiving, focused on e-commerce deals.
– Small Business Saturday: promotes shopping at local and independent retailers the Saturday after Thanksgiving.
– Doorbuster: a deeply discounted item intended to draw shoppers; often limited in quantity.
– Loss leader: a product sold at or below cost to attract buyers who may make additional purchases (loss leader is a common tactic during Black Friday).
– Common criticisms and risks:
– Price games: some retailers mark up items before “discounting” them, or rotate lower-priced items through time-limited sales to create urgency.
– Overcrowding and safety concerns in physical stores.
– Returns and restocking policies can be more restrictive during promotional periods.
– Supply-chain shortages can produce misleading “in stock” messaging or long backorder waits.
Practical checklist for shoppers (step-by-step)
1. Research target items before the sale.
– Record regular prices from multiple sellers.
– Use price-tracking tools (see sources) to check recent price history.
2. Set a budget and a short wish list (3–5 items maximum).
3. Compare unit price and total cost.
– Include shipping and expected sales tax.
4. Verify return and warranty policies.
– Note differences between online and in-store returns.
5. Prefer secure payment methods (credit card with dispute protection) over debit or cash for large purchases.
6. Time your purchase.
– For limited-quantity “doorbusters,” decide whether to prioritize that item or a comparable deal available later.
7. Keep receipts, confirmation emails, and order numbers for at least 90 days.
Worked numeric example — calculating savings and final cost
– Suppose a TV’s listed “regular” price is $800, and the advertised Black Friday price is $600.
– Discount percentage = (Regular − Sale) / Regular × 100 = (800 − 600) / 800 × 100 = 25%.
– If sales tax is 7%, final cost = Sale × (1 + Tax) = 600 × 1.07 = $642.
– If you paid by credit card that offers a 1% rewards rebate, effective final cost = 642 × (1 − 0.01) = $635.58.
– Always compare that $600 sale to historical prices. If a price tracker shows the item was $550 two weeks earlier, the Black Friday “deal” may not be the cheapest available.
How retailers set and display discounts (brief)
– Markup and margin: retailers set list prices to allow promotional discounts while maintaining target gross margin. Gross margin (%) = (Sales − Cost of Goods Sold) / Sales × 100.
– Anchoring: showing a higher “regular” price beside a sale price creates a reference point that can make the discount look larger.
– Time-limited scarcity: countdowns and “only X left” messages accelerate decision-making but can be genuine or manufactured.
Tools and resources to use
– Price trackers and browser extensions (compare across vendors and historical prices).
– Retailer apps and email lists (early access passes or promo codes).
– Consumer protection sites: check return rights and dispute processes.
Summary — smart approach
– Prepare: research items and prices before the event.
– Prioritize: buy what you need according to a budget, not because of hype.
– Verify: read return policies and include tax/shipping in comparisons.
– Use protection: pay with a card that offers fraud and dispute resolution.
Educational disclaimer: This information is educational only and not individualized investment or shopping advice. It does not recommend buying or selling specific securities, products, or services.
Sources
– Investopedia — Black Friday overview: https://www.investopedia.com/terms/b/blackfriday.asp
– National Retail Federation — holiday season and consumer behavior research: https://nrf.com
– Federal Trade Commission — consumer protection and return policies: https://www.ftc.gov
– U.S. Census Bureau — retail trade and e-commerce statistics: https://www.census.gov/retail