Black Friday: Are retailers giving too much away?

Retailers are attempting to one-up each other ahead of Black Friday, but will these deals move the top line?

By TheStreet Staff Nov 24, 2010 5:20PM

TheStreetBy Jeanine Poggi, TheStreet

 

Retailers are going punch-for-punch this holiday season, trying to one-up each other with discounts ahead of the Black Friday rush.

 

But will these deep discounts, Black Friday ad "leaks" and offers of free-shipping really woo customers and boost the top line? The goal is to capture consumers' dollars before their holiday budgets run out, but these promotions might have the opposite effect -- desensitizing shoppers to discounts.

 

Retailers have spent the past year unintentionally "training" shoppers to hold out for the best deals. Now, they want consumers to open their wallets earlier. But shoppers are savvy, and most realize these sales (and potentially some even bigger deals) will still be there as Christmas approaches.

Unlike past years, the industry doesn’t have a handful of hot gadgets and gifts (think Tickle Me Elmo and Nintendo Wii) to entice shoppers, so retailers need to find other ways to create excitement, says Craig Johnson, president at Customer Growth Partners. Items that are considered must-haves, like Apple's (AAPL) iPad, are being offered everywhere, so customers know they will be able to find them.

 

Overall holiday sales are expected to rise 2.3% to $447.1 billion, according to the National Retail Federation.

 

For Black Friday, IBISWorld estimates sales will grow 1.9% from last year, to $11.68 billion. The weekend following Thanksgiving, is expected to generate $41.7 billion in sales, a 3.4% jump from Black Friday weekend in 2009.

 

Browse 15 deals planned for Black Friday

 

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