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HOW BLACK FRIDAY WENT FROM LOSS LEADER TO PROFIT LEADER



TLDR:

• Black Friday has been the number one retail day for multiple decades in America, but it hasn’t always been that way for the mattress industry.


• In the early 2000's, many Mattress retailers tried to breakthrough with success and it often resulted in failure.


• Doorbuster specials drove all the traffic and conversions on those particular items at the beginning of the day, but didn't seem to move the needle in terms of getting customers to extend their interest into larger transactions.


• Mass adoption of the holiday, willingness to buy mattresses online, timing of the sale and technology advancements allowed Black Friday to become one of the most successful sales for the Mattress industry.


--story begins here--


Black Friday has been the number one retail day for multiple decades in America, but it hasn’t always been that way for the mattress industry? Labor Day, Memorial Day, Fourth of July, Presidents’ Day and even Columbus Day were far more successful for the mattress industry up until these last few years. What changed and who gets the credit for recent success?


Off to a Rough Start

In the early 2000's, we saw many Mattress retailers trying to breakthrough with success and it often resulted in failure. Running specials like, "Five dollar pillows and bed frames" was certainly driving traffic, but retailers struggled to convert those door swings into profit.


Doorbuster specials drove all the traffic and conversions on those particular items at the beginning of the day, but didn't seem to move the needle in terms of getting customers to extend their interest into larger transactions. Essentially, shoppers were showing-up to stores very early for the limited-availability doorbuster, but RSAs found themselves working extremely long days with little reward. It was not uncommon for an RSA to close 30 tickets with so little profit that there were no commission dollars to pay them for their extra hard work of opening early, stocking additional products, etc!


There were operational issues as well. Logistically, trying to get these door busters out to all of the stores was incredibly difficult and required a ton of coordination. An event that was supposed to drive sales amounted to a loss leader when taken as a whole.


So what happened to turn this all around?


Mass Adoption of Black Friday: There are a few factors that may have contributed to Black Friday becoming the most popular day for mattress sales. Chief among them is the proliferation of the holiday. Black Friday was initially regarded as a way for big box retailers to swing the door, but over time became widely adopted by all retail. This adoption allowed the mattress industry to validate their discounts and not just offer a small ticket door buster. And if you're a buyer seeking a mattress, shopping on Black Friday for a significant savings on a large item is certainly justified.


Internet Mattress Shopping becomes "a thing": As more and more Americans began doing their shopping online, the bedding industry has seen an unprecedented spike in the willingness to buy a mattress online site/unseen. This allowed retailers to shift the operational burden of carrying per-store stock to their standard distribution platform which was more efficient, lowered cost and less stressful for RSAs.


Perceived vs Actual Value: For many sales, there's a lot of "perceived" value. Essentially, prices are discounted to standard margins. However Amazon's Black Friday deals were not just "perceived", Amazon required the discount be significant and actual beyond standard discounts. Because of this forced policy, shoppers began to attribute Black Friday to "actual value" versus "perceived value" throughout the holiday across all retailers.


Timing: The timing of Black Friday (right after Thanksgiving) means that many people are off work and can take more time to shop. This is also an advantage for couples who are making a big decision and both often want to be available for the decision. The timing of the sale allows individuals more bandwidth for these large purchases.


DID YOU KNOW? JC Penny's coined the term "doorbuster" which was designed to "bust the door" offering limited availability specials "at cost" or "at loss" to generate attention and use the visit to sell other products. Penney’s ran an ad in Alabama's Tuscaloosa News on January 13, 1949.

Cyber Monday now makes sense: When technology began to find its way into the sleep category (adjustable beds, sound machines, etc) the extended holiday known as Cyber Monday (the Monday following Black Friday) became increasingly more relevant to the bedding category.


Black Friday is now a leading event for mattress sales due to an interesting confluence of circumstances from the growth of the holiday to how buyers shop for beds. As more bedding buyers adopt shopping for their mattress online, Black Friday will only continue to grow as an event in the category.





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