Is Black Friday Passé?

Christmas decorations seem to appear in stores earlier every year. Maybe that’s just one of those false impressions we have as we get older – like baseball players were better when we were kids. But what is not a false impression is that the discounting is starting earlier this year.

Sears started the whole business by announcing that it was “Black Friday Now” on Oct. 28. Everyone from Wal-Mart to CVS to Ace Hardware has followed suit in some way or another, rolling out commercials and flashing the type of deep discounts normally reserved for those willing to camp out outside of major retailers on the morning after Thanksgiving.

But the problem for shoppers, retailers, and suppliers, may be that there won’t be anything to buy at those fabulously low prices.

“In anticipation of weak demand, many retailers scaled back on inventory levels to prevent unplanned markdowns at the end of the season,” says NRF President and CEO Tracy Mullin in a press release. “Once the most popular items are gone, retailers won’t have anywhere to get them, so if there was ever a holiday season to buy early, this is it.”

So we may be moving into the mother of all out-of-stocks by early December. If the heavy and early discounting does what it should do – generate demand – then what happens when prices go even lower on Black Friday, and shelves begin to get bare?

Here I insert my standard admonishment about the need to have solid forecasting tools and processes in place.

The other problem retailers and suppliers are going to face is that we have created the same situation for next year. Early shoppers will be reluctant to buy anything not discounted. In addition, there will be the problem of hitting the previous year’s numbers, which began an uptick weeks earlier, and also the fear that a competitor will jump the gun. In other words, there will be multiple pressures to continue early discounting even when the recession is over. It will take discipline to resist.