SANTA CLARA, Calif.--Web sites that post Black Friday advertising circulars days before the traditional kickoff to the holiday shopping season are forcing major retailers to enter a cost-cutting arms race that results in even more online sales.
Bargain hunters who like to plan their Black Friday attack strategy are probably already aware of ad sites like BFAds.net and BlackFridayAds.com. And retailers are no strangers to the sites either.
The sites leaked the circulars advertising the day-after-Thanksgiving prices of electronics at major retailers such as Best Buy, Circuit City, Wal-Mart, Target and others. Consumers weren't the only ones who benefited from the information. Electronics manufacturers and retailers were also able to use the leaked ads to their own advantage, analyst Stephen Baker of the The NPD Group told attendees at a DisplaySearch holiday sales forecast here.
"This year BlackFridayAds.net (and others) made it so no retailers could sneak up on each other," he said. "They knew ahead of time and could formulate a response. They took advantage of that to drive traffic and sales in these big categories."
Being able to match the aggressive prices of competitors could have driven the growth of this season's success stories: flat-panel televisions and notebook PCs, both of which experienced huge increases in unit sales during the post-Thanksgiving shopping period. Sales of liquid crystal display televisions were up 200 percent, and notebook PCs were up more than 50 percent compared to the same week in 2005.
Baker added that retailers began to strategize and integrate their online and in-store prices on Black Friday. There was a lot more pricing activity on the Web than before, which retailers used to react to strategies of other brands or competitors. Some manufacturers and retailers also had online-only sales and secret sales that only consumers who happened to go to a particular Web site would see, he said.
But what effect will this have on the Black Friday shopping ritual cherished/abhorred by so many? Baker said he wasn't sure, but some may find it unfair that those who casually surf to the Web site of a manufacturer or retailer could get a similar or better price as those who queued up outside stores at 3 a.m. in the cold.
He was sure, however that Dec. 23 falls on a Saturday this year. "Don't go anywhere near the malls," he jokingly advised attendees--NPD is predicting it will be the biggest shopping day in consumer electronics history.
Consider yourselves warned.