As is my usual tradition, I woke at O'Dark-Thirty on Friday morning, and ventured out to the stores to participate in the retail phenomenon known as Black Friday. My first stop was Wal Mart, who I considered to have the most "deals". I was half expecting the line to be smaller than previous years and was surprised to see just how many people ventured out this year. The line was big, and the registers were ringing. As I perused the aisles, and filled my own carriage with DVD's, P.J.'s for the kids, and a few Wii video games, I made it a point to look at the behavior of other shoppers.
I did not see a massive run any any particular product, and noted that big ticket items were in the hands of fewer people. What I saw were carriages full of kitchen goods, DVD's, and smaller toys. Last year people were buying DVD players as well as movies. this year it was more about the movies.
After checking out, we ventured to Target, where there was more of the same. Shoppers looking for value. In previous years, your only chance of getting a "door Buster" special was to be in front of the line at the first store you visited. Any thought of getting the special pricing at subsequent stores was out of the question. This year, I ran into specials at each store I visited. By far, Target and Wal Mart were the busiest.
By the time I got to Best Buy, the store was comfortable. There was no wait, and plenty of inventory. I made a few selections, and waited only 2 minutes in line. Last year, I spent over an hour in line! I inquired as to how busy they were, and they said busy, but nowhere near previous years. the same held true for Circuit City, and Staples, where at 11:00 AM I was able to pick up three 8GB thumb drives for $12 each. There were at least 40 more in the bin, which by 11:00 AM last year would have been gone by 6:00 AM.
What I observed was that consumers were seeking value gifts rather than luxury. While I would consider DVD's more of a luxury, the value represented could not be beat. DVD's could be had from $2 and up, and the titles were all decent. Blu Ray (the quality of Blu ray is great by the way) will have to wait a bit longer to become mainstream. Electronics gear, including satellite radio was not a huge seller in my opinion. Consumers were buying mixers, can openers, and the types of items they will use every day. Any big ticket items like televisions seemed to be a "family decision" (foregoing other gifts) rather than simply a gift for dad.
We will have to wait for the numbers, but I predict that Wal Mart will have very positive year over year results. Target will be in line, and Electronics stores will have bad news regarding sales. What I also predict is that some retailers will have continued sales throughout the season in an effort to boost the bottom line. I think we will see a second, and perhaps a third wave of deals in store flyers, which will include new specials not originally planned.
In my opinion, Black Friday was a mixed bag of the desire by consumers to have a good holiday, with the caution that money is tight. People are willing to spend money, but they are not spending as much. For satellite radio watchers, this may mean the lowest retail additions since 2003, even with three free months of service.
Position - Long Sirius XM, No Position Wal Mart, Target, Staples, Circuit City