With Christmas and Hanukkah approaching, the world is awash in reminders that it’s time to buy. Four relatively new holidays outshine them by $36 billion. What are we really celebrating here?
Here are the four new holidays:
- Black Friday. Turned into a shopping holiday in 1966 in Philadelphia and the biggest shopping day of the year in 2003, Black Friday begins around midnight on Thanksgiving. This glorification of gluttony generated $11.4 billion in 2011 sales, up 7% from 2010.
- Cyber Monday -- Created by shop.org in November, 2005, and falling on the first Monday after Black Friday, this orgiastic ode to online purchasing racked up $1.25 billion in sales this year -- 22% more than in 2010, according to comScore -- bringing total online sales through December 12th to $24.6 billion, 15% more than in 2010, according to AP.
- Green Monday -- This-second-Monday-in-December love song to online lucre, was created by eBay (EBAY) in 2007 -- to celebrate the day in the year that people spend the most money on its site because it's the last day they can order and expect delivery by Christmas. Channel Advisor reported that its clients enjoyed 19% higher sales in 2011's Green Monday.
- Small Business Saturday. Created in 2010 by American Express (AXP) -- that offers its card users a $25 credit if they use it to spend at least $25 a participating small business on that day -- this holiday honors the sacred struggle for survival of America's small retailers. I can't seem to find out how much consumers spent to honor this sacred day.
And with retail spending up for the wealthy and the not-so-wealthy, all this exhortation to buy seems to be working. But as an author who occasionally sells books, I was most struck by a new technique that Amazon is using to get people to buy.
Before getting into that, I am struggling to hold two contradictory ideas about the economy in my mind. On the one hand, I read that the economy is doing terribly – unemployment is at 8.6%, 13 million people are unable to find jobs and their unemployment compensation is about to be cut; and woe is the U.S. economy because consumer spending accounts for 70% of economic growth.
On the other hand, we have the evidence of 2.5% economic growth in the third quarter and the many-times-greater increases in holiday spending detailed above.
But the discounts that spurred that buying may have either sucked up all the money in consumers’ wallets and purses or conditioned them to wait for bigger discounts as Christmas and Hanukkah approach.
For example, according to the America’s Research Group/UBS Christmas Forecast Survey, as of December 11th, 40% of consumers said they were completely done with their holiday shopping – far more than the 28% who made that claim at the same point in 2010. If retailers still have unsold inventory, they may lure shoppers back into the stores with discounts “as deep as 70% on coats and flat panel TVs,” according to CNBC.
Meanwhile, the less affluent are doing more to feed the goddesses of the shopping malls and Internet servers than their wealthier counterpart. A Deloitte & Touche survey found a 12 percent rise in 2011 holiday budgets to $844 for families earning less than $100,000 while families making more than $100,000 boosted their budgets a paltry 3.5% to $2,142.
Perhaps those shoppers are motivated in part by a new app from Amazon that lets consumers with smart phones check prices on items as they stroll through retail stores – offering a 5 percent credit if they buy the item at Amazon.
As the New York Times reported, Amazon's (AMZN) price check app lets shoppers scan the bar codes of items in retail stores – including music and DVDs, but excluding books; view the price for the item available online, and offer consumers a 5% credit if they buy the item on Amazon “up to $5 per item, and up to three items.”
That Times story goes on to wax eloquent about the damage that Amazon is doing to small retailers. Perhaps that's one reason why AmEx created SBS.
The uproar here is a bit of retailing inside baseball that the American consumer may not fully appreciate. These different celebrations of American retailing supremacy – Black Friday, Cyber Monday, Green Monday, Small Business Saturday – are celebrating different kinds of retailers.
And make no mistake; there is a battle that has been raging between so-called bricks-and-mortar retailers and online ones for the last decade. And there is no doubt that this battle is ongoing inside the bricks-and-mortar retailers since there is probably not one of them that does not also operate a web site.
But Amazon understands that there is one thing more sacred than any of the six holidays that I have mentioned so far – and that’s making sure that nothing gets between American consumers and their discounts.
And whether your holiday celebrates buying gifts in a store, buying them online, or using an American Express charge card to finance the buy, your share of the holiday loot depends on your ability to sell to consumers what they want at the lowest available delivered price.
For that, I propose a seventh holiday that could be an umbrella above them all – Discount December.