By Glen Korstrom
Retailers are readying for what they expect to be the biggest-ever Black Friday as awareness of what was originally an American retail tradition becomes more entrenched in Canada and the low Canadian dollar keeps shoppers at home.
In past years, Future Shop was the most aggressive local retailer at discounting, according to retail analyst David Gray, owner of DIG360 Consulting Ltd.
Its demise in March, however, leaves a void that other retailers will battle to fill, he added.
(See sidebar at end for more on this)
Representatives at both Best Buy (NYSE:BBY) and London Drugs promise deep discounts and predict that they will achieve their best Black Friday sales in the weekend that starts November 27 and runs through so-called Cyber Monday, November 30.
Key to achieving sales records will be to reverse the consumer mentality that waiting to buy will mean cheaper prices.
“We’ve trained the customer that if you wait until Christmas to buy, you’ll be rewarded,” said Dave Woogman, who manages the London Drugs store on West Broadway near Cambie Street.
“We’re trying to go backwards now. We say that we’ll reward you for shopping early, as opposed to at the last minute.”
To drill home that buy-now message, London Drugs is stepping up a marketing campaign to alert shoppers that the company will match, for 30 days, the advertised price for an item by any competitor.
With Black Friday falling on November 27, Woogman said London Drugs is guaranteeing that its prices on that day will match the price at any Boxing Day sale.
Best Buy has a similar 30-day price-match policy but it is not valid for Black Friday purchases.
“We will have a VIP sale starting on the Thursday, and it will literally have deals so hot that they can’t be printed,” said Best Buy spokesman Elliott Chun.
The determination to increase Black Friday sales comes as sales growth for the Black Friday weekend has been slowing.
Moneris Solutions Corp., which tracks credit and debit card sales, found that, despite slowing, sales growth for Black Friday remained at a healthy 5.1% last year. Sales on the following Cyber Monday slowed to 12.1% last year compared with 29.3% in 2013.
Percentage growth for sales on Black Friday and Cyber Monday
(Source: Moneris Solutions Corp.)
Both Gray and Retail Insider Media owner Craig Patterson believe that differentiating the two days is increasingly pointless because consumers perceive Black Friday as a weekend event, not a single day.
The blurred perception of the two bookended days is perhaps even greater in Canada because most people will be working on the Friday and online shopping is increasingly popular on both Black Friday and Cyber Monday, Patterson said.
“Traffic will wane a bit in the physical stores this year because people are starting to realize that they can go online and avoid the hellish chaos,” said Patterson.
Gray and Patterson also agree that discounts will be slightly shallower this year.
Nordstrom Inc. (NYSE:JWN) spokesman John Bailey said the Vancouver location will discount only in-store items that are already on sale and deemed “clearance” stock.
Bailey, who said the Vancouver store’s September 18 launch was Nordstrom’s “most successful opening in company history,” added that hours will be extended for shoppers who want to get up to 30% off those items and fees apply for online sales in Canada.
“Retailers are getting more savvy,” said Gray. “They’re trying not to blow out everything before people get into Christmas buying.”
Future Shop demise spurs new electronics competition
Best Buy Co.’s decision to extinguish the Future Shop brand makes this Black Friday shopping season significant because it will give other electronics retailers an opportunity to become known as the go-to place for deep discounts.
A&B Sound was for decades the best-known place for huge Boxing Day discounts until that brand dissolved in 2008. Future Shop then won the crown as the king of discounts for both Boxing Day and Black Friday, said retail analyst and DIG360 Consulting Ltd. owner David Gray.
“Future Shop made it a strategic goal to own Black Friday,” he told Business in Vancouver.
“Now, with the Future Shop brand gone, it will be interesting to see where that consumer spending goes, whether people will associate those discounts with Best Buy.”
Although Future Shop owner Best Buy announced plans in March to shutter 131 Future Shop stores and reopen 65 of those stores as Best Buy locations the next week, some former Future Shop locations, such as the store on Granville Street, still have the old signage.
(Photo taken November 16: The Best Buy store on Granville Street has a sign out front that says Future Shop and has a dim letter e – six months after the company discontinued the Future Shop brand | Glen Korstrom)
Inside, employees wear Best Buy uniforms and are not paid commissions, as Future Shop’s employees were.
Gray believes this is confusing for customers.
“Not everyone knows it's the same company, or, if they do, what is happening,” he said. “It’s a signal that [Best Buy] is more focused on cost cutting than brand building. It’s not good.”
Best Buy spokesman Elliott Chun told BIV that complexity with “permits and landlords and bylaws” is why some of the Future Shop stores’ outside signage have yet to be converted.
“We’re now one strong banner,” he said, before confidently predicting the company’s blitz of TV, radio, social media and online advertising will make Best Buy top of mind for consumers.
“Our sale finishes with Cyber Monday, with hot offers in every category, including baby products, furniture and even luggage on Monday, November 30," Chun said.
"Black Friday and Cyber Monday have become popular sale occasions in Canada. In fact, it was our customers [who] really drove us to offer a Black Friday and Cyber Monday sale five years ago, after we saw huge demand for the sale through things like search terms entered on BestBuy.ca.”
