Black Friday refers to the day after Thanksgiving in the United States, which is celebrated on the fourth Thursday in November. Black Friday is considered the start of the holiday shopping season, and it's known for significant sales and promotions offered by retailers, both online and in-store.
Why Is It Called "Black Friday"?
The term "Black Friday" has historical roots in the retail industry:
Financial Term: In accounting, the color "black" is used to indicate profitability, while "red" signifies a loss. Retailers traditionally operated "in the red" (at a loss) throughout the year and only became profitable ("in the black") during the holiday season, starting with Black Friday.
Philadelphia Police: The term also originated in the 1960s in Philadelphia, where it was used by police officers to describe the chaotic, heavy traffic and large crowds of shoppers the day after Thanksgiving.
Over time, Black Friday became a nationwide shopping event, and now it's a global phenomenon, extending well beyond the United States.
Why Do E-Commerce Companies Offer Discounts on Black Friday?
E-commerce companies, as well as brick-and-mortar retailers, offer huge discounts on Black Friday for several reasons:
1. Kickoff to Holiday Shopping
- Black Friday marks the beginning of the holiday shopping season. Offering discounts encourages consumers to start their holiday shopping early, allowing businesses to capture sales early in the season.
2. Boost Sales and Revenue
- Offering significant discounts helps retailers increase sales volume in a short period. The deals attract a large number of shoppers, which leads to higher sales and revenue, even if individual profit margins are lower on discounted items.
3. Clear Inventory
- Black Friday is an opportunity for companies to clear out older stock or excess inventory. Retailers often use the event to sell products that haven’t moved during the year, making room for new stock.
4. Competition
- Retailers compete aggressively to attract customers during the holiday season. Offering deep discounts on Black Friday helps companies stand out among competitors, especially in the highly competitive e-commerce space.
5. Customer Acquisition
- Black Friday is a chance for businesses to attract new customers with enticing deals. Once customers make a purchase, companies can nurture those relationships through future marketing campaigns, loyalty programs, or by encouraging repeat business.
6. Cyber Monday Extension
- For e-commerce companies specifically, Cyber Monday, the Monday following Black Friday, has become an extension of the shopping frenzy. Many online retailers continue their discounts or offer special deals on this day to maximize sales.
Why Is Black Friday Popular Worldwide?
Black Friday has grown beyond just a U.S. event because of globalization, the rise of e-commerce, and the influence of U.S.-based companies like Amazon. Retailers in many countries now take advantage of the consumer excitement and extend discounts to shoppers globally, even if they don't celebrate Thanksgiving.
Summary of Key Reasons for Black Friday Discounts:
- Start of holiday shopping season.
- Boost sales during a high-spending period.
- Clear inventory for new products.
- Stay competitive with other retailers.
- Attract new customers and increase brand awareness.
Overall, Black Friday has evolved into a major shopping event worldwide, particularly in e-commerce, and it benefits both consumers (with discounts) and retailers (with increased sales and exposure)