Black Friday started earlier than ever this year, but the expected mad rush hasn’t happened. Shoppers are posting Instagrams and Tweets of empty stores, and even the New York Times is getting in on the laughs. So is this the last Black Friday EVER? Probably not. But the last one is likely coming sooner than you think.
In theory, the malls should be flooded. Unemployment is at record lows, 4.1% according to the Bureau of Labor Statistics. Wages have kept pace with inflation. Credit is easy to get. Discretionary income is steadily growing. All of that usually adds up to spending, and it has. Just not at brick-and-mortar retailers — which this year have seen record numbers of store closings while once-mighty retailers face the chopping block.
Part of this, of course, is Amazon, since nobody wants to have to risk getting punched to buy a TV. Amazon will likely end 2017 controlling 44% of the ecommerce market, with eBay a distant second at 6.8%. But while that’s an easy fallback, that’s not a perfect explanation; Amazon can’t even crack the top twenty of the fastest growing retailers in the world, according to the National Retail Federation. Amazon’s big contribution is price pressure. Its size allows the company to keep the price low enough on goods that it’s competitive with almost any store you can think of.
Another part is that we’re simply buying less stuff. Your average American spent 2.3% less on clothes, for example, last year, and growth on buying all the other stuff we don’t need slowed last year, too. You can chalk this up to anything from Millennials valuing experiences over things, to the fact that holiday revenue is so important Black Friday is increasingly just another day on the calendar of holiday deals, but part of the explosive retail growth over the last two decades has been Americans buying computers, smartphones, and other tools. Now almost everybody has one, and as neat as the Google Home Mini is, it’s not exactly a must-have bit of tech.
Finally, well, like we said, who wants to get punched buying a TV? Last year there were multiple shootings on Black Friday, and even though most of those events had nothing to do with shopping, we’ve all seen the videos of the brawls and heard the stories of the shoving matches. While the violence of Black Friday is exaggerated, if you can get it cheaper elsewhere, or have to spend $20 more and not get thumped in the nuts with some grandma’s purse, why bother?
Even if Amazon had stayed a bookseller, even if Black Friday crowds were kind and orderly, even if we had all the money in the world to spend on dancing Santas and discounted luggage, a lot of retailers would still be facing the hammer. The reality of the retail business is that a shocking number of chains have been bought by private investors who rack up as much debt as they can on the business, take their money out, and leave the chain to sink or swim. Whenever a retail chain closes a bunch of stores, they usually leave the landlord holding the bag for unpaid rent. So even solvent chains that have fended off the wolves, and there aren’t many, will still see their rents go up, even as Amazon continues squeezing their margins.
Brick-and-mortar retail won’t die tomorrow, of course. Even Amazon is getting into the game of selling things in big boxes of air, buying out Whole Foods for billions. But the way we shop, what we buy, and how we buy it is changing, and there’s less and less room for going to a store at 6am for a deal.
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