Black Friday has always struck me as an odd moniker for a major event during the typically cheerful holiday season.
In the last few years Black Friday (the huge shopping day after the annual Thursday holiday of the U.S. Thanksgiving Day) has seemingly become even more intensively publicized, with the new phenomena of Gray Thursday (stores opening early on Thanksgiving Day to get a head start of the shopping crush) and Cyber Monday (the surge in online shopping on the Monday after Thanksgiving where people return to their computers) and drive large amounts of traffic to shopping websites in search of bargains.
For the innovation practitioner observing or, indeed, participating in this frenzy of shopping, two aspects of this period are worthy of additional investigation and can provide insights into the art of new thinking.
The first insight is the power of a simple term to influence consumer behavior. While there are numerous factors that drive the surge in interest in shopping the day after Thanksgiving (such as the fact that many workers have that day off and there are only three to four weeks remaining until the Christmas holiday which means people need to start shopping for gifts), the intensity of devotion to Black Friday shopping suggests that something more than just a calendar attribute is driving shopping behavior.
Conventional wisdom asserts that the term “Black Friday” refers to the fact that in the highly competitive retail arena, the first day that a typical company becomes profitable (in the black, vs in the red), is on the heavy shopping day after the Thanksgiving holiday. However, in an article on the history of the holiday prepared by the Associated Press reporters Anne D’Innocenzio and Tom Krisher, the actual history of Black Friday is much more complex.
The first reference to Black Friday was related to the stock market panic of 1864, which had been influenced by legislation that tried to drive a reduction in the price of gold. The next manifestation of the term appeared in 1950 as factory managers noticed significant employee absenteeism on the Friday after Thanksgiving. A decade later, police in Philadelphia used the term to describe large crowds in retailers on the day after Thanksgiving. The term began to appear in newspapers in the 1970s as the official start of the holiday shopping season. The idea that Black Friday aligned to the profit and loss statements of the retailers did not emerge until the 1980s. In the 2000s, we began to see references to Cyber Monday and in 2012, the term Gray Thursday, whereby retailers open their doors before Black Friday, began to appear.
The insight for the innovator here is to think about the importance of a simple name as a unifying theme for an endeavor. The innovator should not underestimate the importance of the name of an initiative and the power of that phraseology to drive human behavior. Black Friday is a particularly powerful concept because of all the information it conveys in a short, simple phrase. Hearing that term gives one the day of the event and reminds the listener that the day is all about retail consumption, knowing that stores are focusing an intense amount of attention on the success of that day.
When we are brainstorming names for our initiatives, we should consider similarly powerful yet simple terms that can convey a great deal of information in only a couple of words. While there are caveats to this approach in the form of avoiding names that are too trivial (see my article on Pilgrim Innovation), the innovator should think about how perfectly Black Friday suits the post-Thanksgiving retail activity and try to find something similar for their initiatives.
A second innovative aspect of Black Friday stems from the creative, though somewhat deceptive, approach to pricing adopted by most retailers to enable them to drive significant discounts on Black Friday. Conventional wisdom suggests that retailers present dramatic discounts on their products for Black Friday and make money through a high volume of low-profit transactions. The reality, according to Suzanne Kapner from the Wall Street Journal, is that retailers carefully work with their suppliers to set manufacturer’s suggested retail prices at a point where they can provide significant discounts yet still make a decent profit on the sale. For instance, Kapner notes, a sweater that is priced originally at $68 then sold for $39.99 (a 40% discount), still makes a good profit margin for the retailer yet still gives the shopper a feeling of having achieved a hard-won bargain.
In the words of one 44-year-old shopper in New York at Macy’s recently interviewed by Kapner, “I don’t even get excited unless it’s 40% off.” The big sales of Black Friday, in some ways, can be seen as “manufactured” to the extent that significant adjustments to pricing take place prior to the actual sale day so that the retailer can create the impression of large discounts without having to take a big hit to its bottom line (otherwise Black Friday would be Red Friday).
For the innovation practitioner, we should study the tactics of the major retailers on Black Friday to determine if we can make use of their strategy to help move forward our own initiatives across an enterprise. For example, if we are trying to convince our colleagues to adapt to a new transformation initiative that will improve the performance of a particular business process, we should think if there are ways that we can make subtle adjustments to various elements of the process prior to implementing the initiative so that performance improvements resulting from the new process are easier to see. It could be something as simple as increasing the precision of a metric so that changes in that metric are more apparent to observers.
Just as retailers are not trying to deceive their customers in their pricing strategies on Black Friday, the intent of my advice is not to deceive those around us in how we measure the results of our initiatives. Few of the people interviewed leaving a store on a Black Friday after obtaining a “bargain” seem displeased with the results of their effort. Likewise, we should think about how we can make those who participate in the roll out of our innovation initiatives “happy customers,” even if this requires some creativity in the way we measure those results, such as focusing on one data element more so than others. The innovation lesson here is to spend time thinking about the importance of measurements in driving the perception of an initiative’s success.
Anne D’Innocenzio and Tom Krisher, “Thursday Shoppers Get a Jump on Black Friday,” Atlanta Journal-Constitution (November 23, 2012), A2.
Suzanne Kapner, “The Dirty Secret of Black Friday ‘Discounts:’ How Retailers Concoct ‘Bargains’ for the Holidays and Beyond,” Wall Street Journal (November 25, 2013).
image credit: blackfridaybradsdeals.com
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Scott Bowden works on Innovation Programs for IBM Global Services.