Let the frenzy begin

Let the frenzy begin

With just days before the official kickoff of the year’s biggest
shopping season, consumers are hitting the dozens of websites that
track holiday sales and finding TVs, eBook readers and other items
at their deepest discounts of the year.
With just days before the official kickoff of the year’s biggest shopping season, consumers are hitting the dozens of websites that track holiday sales and finding TVs, eBook readers and other items at their deepest discounts of the year.

The day after Thanksgiving, or Black Friday, No. 1 electronics retailer Best Buy Co. will offer its $150 Nook eReader from Barnes & Noble Inc. for $99.99. Wal-Mart Stores Inc. will sell the “Ice Age” Blu-ray movie, currently already on sale at its site for $20, just for $5.

Target Corp. will have a 40-inch Westinghouse LCD HDTV on sale for $298, a discount of over $250, so far the best deal for such TV, according to bfads.net, which tracks Black Friday promotions.

As the economic downturn led shoppers to increasingly buy things closer to when they need them and driven to shop by events such as the holiday season, the annual Black Friday “doorbuster” specials, sometimes at a loss for stores, have become a big feat for retailers to grab the attention of consumers in the hope that they will spend their money on things beyond what’s being promoted and shop with those stores the rest of the season.

“It’s an important holiday,” said Home Depot Inc. Chief Financial Officer Carol Tome in an interview. “We want to get our fair share. We are expecting more sales this year than we had last year.”

Black Friday got its name because it’s traditionally the turning point when retailers become profitable, or “in the black for the year.

It’s again expected to rank as the top sales and traffic day this year after holding the top spot in at least the past five years, according to mall traffic-tracker ShopperTrak.

Still, Black Friday does not the season make, analysts said. While shoppers have increased their budget for the day, it still only represented 6.4 percent of sales between Thanksgiving and Christmas last year, according to ShopperTrak.

“It does matter,” said Morgan Stanley analyst Michelle Clark. “It’ll set the tone for the rest of the holiday season. But you still have the rest of the season. You have to have strong December sales as well. Price is important, but product newness is also key.”

This year, retailers’ hot categories for Black Friday include flat-panel TVs, e-readers, mobile phones and tablet computers. As the price of Blu-ray disc player has declined to under $100, the doorbuster specials from retailers including Wal-Mart and Target also focus on Blu-ray movies for $5 to about $15, well below their regular prices.

“Blu-ray is a huge thing this year,” said Michael Brim, founder of bfads.net. “It’s going to start to cut into DVD sales.”

Other deals include a $139.99 7-inch Android tablet computer from Kmart, a discount of $40, and cashmere sweaters for $34.99 from an original ticket of $100 at Kohl’s Corp. Gap Inc.’s Old Navy chain will give away a Dance Central Kinect game for the Xbox 360 console with a $25 purchase.

With the importance of Black Friday promotions, retailers such as Sears Holdings Corp. said they begin to study what and how much to promote as early as a year in advance, right after they wrap up the previous Black Friday sales.

At the same time, they hold off finalizing deals until the very last minute to “take the temperature checks” and include customer feedbacks, said Sears spokesman Tom Aiello.

Guarding the deals’ secrecy and timing their release is another big exercise.

Home Depot, for instance, in October sent a letter to sites including dealtaker.com, threatening legal action against any site that posts its Black Friday promotions before its official publication date on Nov. 25. Wal-Mart also sent a similar letter in October, bfads.net’s Brim said.

“We had over 100 versions of the ad based on local market demand and product availability,” said Home Depot spokeswoman Jean Niemi. The unofficial release “causes confusion.”

Other retailers such as Target and Best Buy said they also don’t “leak” their Black Friday ads to various sites and declined to confirm their authenticity. Target’s official ad doesn’t come out until Wednesday, while Best Buy will release its ad on Sunday.

Still, with the type of the traffic many of the deal tracking sites generate, the leaked Black Friday ads often get implicit consent from retailers. Between 2004 and 2006, Brim said he received 10 to 15 cease-and-desist orders each year from big retailers. This year, he got only about 3 or 4 from mostly smaller companies.

“We’ve become a huge marketing machine for these companies,” said Brim, who said his site received 135 million page views in November 2009 alone with 750,000 subscribing to its mailing list.

“The ad will inevitably leak. Once it’s out there, it doesn’t make sense for them to stop it,” he said.

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