Black Friday the ‘pinnacle’ for businesses in a struggling economy

David Gens, CEO and founder of Merchant Growth, outlines some challenges small businesses face on this crucial Black Friday weekend.

If it seems Black Friday deals have been going on for weeks, retail experts say you’re not wrong. In recent years, the one-day shopping event has transformed into a month of deep discounts that retailers can’t do without.

“It’s sort of snowballed and it’s really important because it’s the major shopping period for the holidays,” said retail analyst Bruce Winder.

Winder says Black Friday started around 2010 when the Canadian dollar was at par with the U.S. dollar. He says traditional retailers from clothing stores to electronic companies started offering discounts to encourage shoppers to spend their money in Canada instead of in the United States.

“It’s sort of the pinnacle, if you will, of holiday shopping in Canada and everyone is in on it now, it’s not just traditional retailers,” he said. “Anyone who is selling anything for the holidays… is leveraging Black Friday because shoppers are in the mood to spend.”

Patti Taggart starts shopping for the holidays in May or June. She owns a small independent toy shop in Ottawa, Tag-Along-Toys, and says it takes time to research and choose toys for the holiday season.

“We start looking at what’s available, what’s going to be the trends,” she said. “We start ordering in May and June and thank goodness we have lots of space to store things.”

Taggart says she is looking for good play value in her toys, items that can be used for years and often for multiple purposes. Her shop offers about 10 per cent off the entire store on Black Friday, or what she calls Fabulous Friday.

“Right now, people are a little hesitant. They still aren’t sure what they want, but all of a sudden after Black Friday, or Fabulous Friday, it becomes quite busy,” she said. “It’s only ten per cent, but it’s something and it gets people in and then they can start making their lists.”

While Taggart says the shopping “holiday” isn’t a huge deal for her store, she says it does help kick off the holiday season and get shoppers in the mood to look for gifts.

“Definitely this week is a busier week,” she said.

Retail experts say the month of sales benefits both consumers and retailers. The longer sales period often translate into more and deeper sales, with fewer crowds in stores and more predictability for retailers looking to fill their shelves and hire staff.

“If you are a retailer, the more times you can engage in shopping with your consumer by having daily deals, or weekly deals you can get them to spend more perhaps at your store than otherwise,” Winder said. “If you are a consumer, you have a lot more choice too because you have a lot more items that are on sale for the whole month that you can pick from at deep discounts.”

Adjusting holiday spending plans

This year, those discounts may count for more than ever. A recent survey from BMO found that three-in-five Canadians will adjust their holiday spending plans amid tariff concerns and the rising cost of living. The same survey found nearly half of respondents said holiday sales and discounts cause them to spend more or purchase more gifts than they originally intended.

“With concerns about the rising cost of living and economic uncertainty shaping holiday plans, Canadians are showing resilience by budgeting earlier, shopping mindfully, and prioritizing what matters most,” said Anthony Tintinalli, head of specialized sales at BMO.

The BMO survey also found that about 42 per cent of Canadians are planning to shop for sale and or clearance items, 31 per cent intend to shop at more affordable or discount brands and 38 per cent intend to buy fewer gifts overall.

RedFlagDeals monitors promotions and sales says the tradition of Black Friday deals have changed Canadians shop. The Canadian-based website says it has seen bigger discounts than usual, with deals coming in from a wide array of retailers.

“Part of it is retailers realize that Canadians don’t have the ability to spend like they used to, but still wanting to capitalize on consumer purchases and so you have to meet shoppers where they are at and that means greater discounts,” Erickson said.

In addition to deeper discounts, Erickson says people are changing how they shop to take advantage of the earlier deals.

“RedFlagDeals.com has been around for 25 years and I would say, certainty over the last couple, we have noticed a real shift in people changing their shopping habits based on these big tentpole events that happen,” said RedFlagDeals.com Content Coordinator Kari Erickson.