When shoppers head out in search of Black Friday bargains this week, they won't just be going to the mall, they'll be witnessing retail theater.
Stores will be pulling out the stops on deep discounts aimed at drawing customers into stores. But retail-industry veterans acknowledge that, in many cases, those bargains will be a carefully engineered illusion.
The common assumption is that retailers stock up on goods and then mark down the ones that don't sell, taking a hit to their profits. But that isn't typically how it plays out. Instead, big retailers work backward with their suppliers to set starting prices that, after all the markdowns, will yield the profit margins they want.
The red cardigan sweater with the ruffled neck on sale for more than 40% off at $39.99 was never meant to sell at its $68 starting price. It was designed with the discount built in.
Here's how it works, according to one industry consultant describing an actual sweater sold at a major retailer. A supplier sells the sweater to a retailer for roughly $14.50. The suggested retail price is $50, which gives the retailer a roughly 70% markup. A few sweaters sell at that price, but more sell at the first markdown of $44.99, and the bulk sell at the final discount price of $21.99. That produces an average unit retail price of $28 and gives the store about a 45% gross margin on the product.
Another tactic involves raising selling prices ahead of the holidays before the discounts kick in. In an analysis for The Wall Street Journal, price-tracking firm Market Track LLC looked at the online price fluctuations of 1,743 products in November 2012. Prices climbed an average of 8% in the weeks leading up to Thanksgiving for 366, or about a fifth, of the products; the items were then discounted on Black Friday. Toys and tools had the biggest pre-Black Friday price increasesabout 23%.
Video was funny except for the sections showing the storming of the stores. That reality is scary.
Never have visited any store on Black Friday and never will. Don't like crowds and it's much more comfortable to shop online.
Video was funny except for the sections showing the storming of the stores. That reality is scary.
Never have visited any store on Black Friday and never will. Don't like crowds and it's much more comfortable to shop online.
I've been once in my entire life. It was at a Toys R US. This was when the first Zune player was released and they were selling it dirt cheap. Long story short, it was just like some of the scenes in the video. Never again will I take take part in any Black Friday mess.
However .... On Black Fridays around the afternoon time, I head over to Home Depot and find some amazing deals for myself. No craziness going on over there. Radio Shack is another sleeper on Black Fridays.
Hmm. Am in the market for a nail gun. Never thought of Home Depot on Black Friday. I may just have to deviate from my stay-at-home tradition.
Thanks for the tip!
EVERYWHERE is bad on Black Friday. Even Home Depot.
If there's a sale, there will be blood.
I like it.
The mix of Black Friday and Armageddon makes for a nearly perfect dark comedy moment.
EVERYWHERE is bad on Black Friday. Even Home Depot.
If there's a sale, there will be blood.
Seen some 'Black Friday' adverts over here for the first time ever. Hopefully it won't catch on like it has in the US. In my humble opinion, the entire thing bat**** insane
I've been once in my entire life. It was at a Toys R US. This was when the first Zune player was released and they were selling it dirt cheap. Long story short, it was just like some of the scenes in the video. Never again will I take take part in any Black Friday mess.
However .... On Black Fridays around the afternoon time, I head over to Home Depot and find some amazing deals for myself. No craziness going on over there. Radio Shack is another sleeper on Black Fridays.