Black Friday and the Capsim Connection

Okay, so if you’re like me, you’re already tired of all the annoying holiday shopping ads on TV that are all telling you that right now is the best time to buy (fill in the blank product here) right now!  And of course with Black Friday just past us, the ads were in full force with “door buster” deals and other extra perks for shopping early.  Added to the drama this year was the fact that value stores such as Wal-Mart and Target opened on Thanksgiving evening as opposed to 4 AM or whatever obnoxiously early time it was last year.  But now that the drama of the biggest shopping day of the year has died down a bit, I started to wonder if any of the ads and marketing strategies actually paid off for these brick-and-mortar stores.

In a Forbes.com article posted on November 28th, the author suggests that rather than Black Friday sales results giving us a glimpse of the holiday season’s hottest items or predictions on whether this holiday season will be better or worse than last year, consumers’ shopping and purchasing trends and habits are changing and that retailers should be cognizant of these changes if they are to have a successful holiday sales season.

For example, the traditional big shopping days such as Black Friday are less and less appealing to consumers with Black Friday sales down 1.8% from 2011.  Whether stores open on Thanksgiving night or at 4 AM on Friday, consumers find neither time convenient.  They are choosing to shop at more schedule-friendly times or even online.  With e-commerce and personalized electronic ads becoming more and more prevalent, is it any surprise that Black Friday online says were over $1 billion, which made it the largest (dollar wise) online shopping day of 2012 so far?  This is a 26% increase from online sales on Black Friday 2011!

Another message retailers need to interpret is that consumers may be becoming calloused to the inundation of sales ads.  As we learned in our marketing class last quarter, mass media is not nearly successful as it used to be.  Retailers need to create more personalized, relevant ads for their target market and cut through the incessant advertising noise that bombards consumers every day.

This article got me thinking about our Capsim simulation and how some of these concepts might apply.  Although we just started and we’re all still forming our strategy, there are some key concepts that we’re putting into practice this quarter.  It will be key for us all to identify our target market, know and understand the needs/wants of that market and then create products and a marketing campaign that our target market will be receptive to.   Although there is no Black Friday in the Capsim simulation (which I think we’re all thankful for!) for us to use as a basis for purchasing trends such as the Forbes.com article suggests, we will hopefully put into practice some of these key business concepts as we move through the 7 Capsim rounds.

Hurricane Sandy’s Effect on Shopping

 

After the devastating hit on the American East coast from Hurricane Sandy, so many conflicts have risen. Not only are people left without power and home, but business owners are having a tough time figuring out how and when to get products shipped to them from across the Atlantic. As mentioned in the article, “The New York area’s port system is the largest on the East Coast, and the third largest in the nation. Last year, it handled $208 billion in cargo”. Not only are the ports destroyed by Hurricane Sandy, but other modes of transportation are effected as well. The train rails, for example, are covered in debris and damaged by the debris.

As a result, many business owners are not receiving any of their shipments that were requested because there is no mode of transportation to reach them. Also, the holiday season is when entities gain the most profits. This has a huge ripple effect because if businesses are not getting any of their goods, then their customers and business to business transactions won’t receive products needed. In turn, no business will get sufficient profits and customers will not receive their desired good. I can only imagine the frustration on everyone’s minds.

With all this trouble, there is some positive attitude coming from business owners. Robert Van Sickle, the owner of Polka Dog Bakery, states that he considers, “Repackaging the [dog] biscuits and donating proceeds to storm relief efforts.” This is a thoughtful gesture that many business should think about keeping in mind. If owners are not able to get parts of products to complete their good, then he or she should donate it to those who could be in need. This way, not only are they giving back to the community, but the community will recognize their effort in helping, which could result in gaining customers and gaining loyalty from their current customers.

This scenario helps me link back to the leadership triad. Business need to work with the foundation/ condition they are given to try to squeeze as much profit as possible. If people don’t have power, maybe they need to post up printed ads all around the city to get the attention of consumers or have employees going from one house to another giving away coupons to their merchandise, just so they can bring customers through the door and allow those who have a limited budget to be able to purchase merchandise that he or she wants. This results to a customer focus by creating such strategic planning. With this storm, businesses need to focus and think about their local customers more than ever by giving the helping hand and showing how appreciated he or she is for being a loyal customer.

What are your thoughts about the situation? What are some strategies you would utilize to bring customers into your store to get rid of inventory and make as much revenue as possible without having any new products coming in?

 

To read more about the article visit this link: http://www.nytimes.com/2012/11/05/business/a-storm-battered-supply-chain-threatens-the-holiday-shopping-season.html?pagewanted=1&_r=0&ref=business