I find it interesting that a few “big days” are growing drastically out of proportion related to overall holiday sales. 5 years ago, Black Friday was closer to 10% of total holiday sales. Today it is above 20%. Add the other two big days “Cyber Monday” and “Green Monday” and you have 3 days that provide almost 40% of holiday sales.
This is not a good thing for most retailers because the winner of these big days are the stores who can win on price. Who wins on price? The stores with the strongest buying power like WalMart, Amazon, Target and Best Buy. They will do what smaller retailers can’t: win a race to the bottom.
That said, it is not all gloom and doom for smaller retailers. We have seen great examples of companies taking over control of commoditized products from the big players through greater customer service or by disrupting business as usual.
Zappos.com: At first, no one would buy shoes online because they couldn’t try them on. Zappos solved that by offering free shipping, free return and superior service. We tell shoppers to buy three pairs in different sizes and return the two that don’t fit. Zappos has a 365 day return policy. Amazon sells too many things to do that so Zappos’ focus wins.
BlueNile.com: disrupted the way jewelry is sold. Instead of buying at the mall or local jewelry store where you pay 100% markup for a diamond, they sell it online for a 15-20% markup. They buy from the same distributors, for the same prices, but the end price is dramatically less because their entire infrastructure is a 27,000SF warehouse in Seattle. And to answer the question “Who would buy expensive jewelry sight-unseen?” they utilize their website incredibly well to educate and empower their consumers – myself included – about their jewelry purchase, something that can’t happen at the mall.
They also provide free FedEx and a generous return policy. That’s what has enabled them to sell an incredible 200,000 engagement rings online. Again, Blue Nile’s focus wins.
This year I am seeing the run-up to Black Friday extending farther than ever before. It’s as much “Black November” as it is “Black Friday.” This time last year we had not even launched our Black Friday site. We launched 3 weeks earlier this year and were immediately getting 40,000 uniques a day at BlackFriday2010.com without advertising it.