Black Friday reigns as the most heavily promoted annual retail shopping event with the best sales of the year. Stores and online merchants plan Black Friday promotions and sales early in the year to be prepared with massive inventories to sell to eager shoppers looking for the best deals.
The history of the term Black Friday began 150 years ago with gold investors, but it wasn’t in November and had nothing to do with retail sales. In the ensuing years, Black Friday was associated with post-Thanksgiving “sick-outs,” traffic jams, accounting principles, and, finally, fabulous sales.
While Black Friday sales are going to look a bit different this year with the pandemic still raging, here is the history that made it the shopping event it has become today.
The U.S. financial securities market crashed on Friday, September 24, 1869, due to the intentional manipulation of the price of gold by two investors and the response by President Ulysses Grant. Jay Gould and James Fisk tried to make a killing on the gold market by shutting out government involvement. When Grant learned about the machinations, he directed the sale of $4 million in federal gold. Grant’s move foiled Gould and Fisk but crashed the market. The stock market dropped 20% and gold fell 50% on the original Black Friday.
Black Friday was the seventh paid holiday Baltimore aircraft manufacturer Glenn Martin awarded the company’s employees in 1952. Employers at the time were frustrated by the “Friday-after-Thanksgiving-itis” malady that kept many workers home from work an extra day. Rather than dock pay, which some companies tried, Martin’s company cut its losses by granting the day off as a paid holiday, making it a win for the company.
Somewhat wider use of the term Black Friday began in the early 1960s with the Philadelphia police department. According to the Philadelphia Bulletin, traffic police coined the term because they were all required to report for 12-hour shifts on the day after Thanksgiving due to the huge annual traffic jams caused by shoppers in the city.
In the late 1980s, retailers propagated the notion of Black Friday as an accounting reference to businesses finally making a profit or being “in-the-black.” The concept followed the idea that many companies operated “in-the-red” from January through late November and relied on sales starting the day after Thanksgiving to survive.
One implication of the accounting spin on Black Friday was that stores had to take deep discounts on product prices because it was a “sell-or-die” situation for the companies. Blue laws in many states didn’t allow stores to open on Thanksgiving Day, which also contributed to shopper excitement.
Big sales at crowded stores on the day after Thanksgiving grew to a national obsession, both for shoppers and for observers who commented on the madness of it all from the 1960s on. Retailers didn’t begin to advertise Black Friday sales with a positive spin, however, until the mid 2000s.
Stores began to open early on Black Friday, first at 6:00 A.M. and then even earlier until 2011, when Best Buy, Kohls, Macy’s, Target, and other major retailers opened at midnight. In 2012 Walmart opened at 8 P.M. on Thanksgiving Day and the competition was on to gain for shopping dollars.
When Black Friday sales were held solely in retail stores, crowds of shoppers fighting for goods, and often each other, became an annual spectacle. People who would otherwise be repelled by crowds and news clips of fighting shoppers were nevertheless attracted by the prospect of great prices on nearly everything for sale.
In 2018, according to the National Retail Foundation, 89 million people shopped online and in stores on Black Friday, a 40% increase from 64 million in 2017. Retail sales on Black Friday totaled $5.03 billion in 2017 and $6.2 billion in 2018.
According to Numerator, Black Friday 2018 accounted for 7.1% of the money consumers spent during the holiday season from Thanksgiving Day to Christmas. The top Black Friday 2018 retailers were Walmart, Amazon, and Target.
Black Friday is definitely the day to get the best discounts. Good deals continue right up to Christmas, but in 14 top gift categories tracked by Numerator in 2018, the greatest discounts were available on Black Friday. The average discounts on four categories tracked by Numerator (computers and electronics, small appliances, entertainment, and sporting goods) were 37.2% on Black Friday and 30% on during the holiday sales season after Black Friday including Cyber Monday, Cyber Week, and right up to Christmas.
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