| Black Friday is one of the most popular and profitable holidays, but there are many myths and misconceptions around it. |
For example, do you know why it’s called Black Friday? This holiday is much more interesting that people give it credit for, and it’s essential for many large chains and small businesses.
Why Is It Called Black Friday?
Many people think that Black Friday comes from the fact that many businesses “get into the black” from the great sales. While this does make sense, and it certainly is true for many stores, this isn’t where the term originated.
It started in Philadelphia in the 1960s. The day after Thanksgiving, there was an annual Army versus Navy football game that caused large and rowdy crowds to appear in the city. The police called it Black Friday due to the enormous problems that they had trying to keep the crowd under control.
It wasn’t until the 1980s that storeowners changed it into the modern meaning. They didn’t want any negative associations with shopping at their stores.
Average Consumer Spending
While many experts said that the Black Friday spending was slowing down in 2011 and 2012, this is far from reality. Black Friday spending increases every year by more than 10 percent.
In 2010, consumers spent over $45 billion. The average spending per consumer was $365. This increased to $52.4 billion in 2011 with average spending per consumer at $398. In 2012, nearly $60 billion was spent, and each consumer spent around $423.
Online Spending
While Cyber Monday is known as the official day for great online sales, there are still many people who get great deals by shopping online during Black Friday. Retailers are paying more attention to their websites because spending doubled from 2009 to 2012.
In 2009, consumers spent only $595 million. This increased to $1.04 billion in 2012. Many experts are assuming that online spending will overtake physical spending within a decade.
Making a Profit
How can a retailer reasonably make a profit when offering such great sales during Black Friday? Think of it this way. A retailer buys an HDTV for $500. The TV would normally sell for $1,000, but the retailer will decrease the price to $600 or $700. This gives the retailer more than enough room to make a profit, and will sell more product than usual. Not to mention, customers are more likely to pick up other items while they’re grabbing bargains.
Infographic: Interesting Facts About Black Friday
Source: Accounting Degree Guide
