In 1966, a small publication in Philadelphia was the first to refer to the day after Thanksgiving as “Black Friday.” Since the 20th century, Black Friday has turned into the biggest shopping event of the year, with die-hard shoppers waiting days in advance outside of their favorite stores. It wasn’t until recently that Black Friday became associated with companies “staying in the black,” or making a profit.
This year Walmart has chosen to advertise its Black Friday promotions earlier than ever. A physical catalog through direct mail and a digital catalog at Walmart.com were released this past Thursday, November 10th. Along with the catalog consumers have also been exposed to a YouTube video called “The Walmart Report,” which emphasizes Walmart’s Black Friday hours and specials:
Walmart has a strong social media presence, including highly interactive Facebook and Twitter pages. Retail giants such as Walmart look to social media as a way to increase awareness of their deals and gather customer feedback. On Twitter and Facebook Walmart already released their Black Friday deals, far in advance of TV and print advertisements. By giving “fans” of their Facebook page and “followers” of their Twitter page an exclusive first look, Walmart provided value to their customers. The early Black Friday buzz has been substantial for traditional media and online coverage to an overwhelming popularity among bloggers. Sites such as Blackfriday.com even threw a Twitter party so fans could discuss the deals after they were announced.
In terms of pricing strategies, most retailers use Black Friday as an opportunity to implement a sales-oriented pricing strategy. Once Thanksgiving is over, consumers tend to start shopping heavily for the holidays. Retailers use Black Friday and the weekend to lower prices and maximize their sales. The companies hope to increase their market share and clear out large amounts of stock at low profit margins to increase total revenue.
With its already low prices, Walmart is implementing a status quo pricing strategy. While Walmart may be able to beat competitor’s low Black Friday prices, they are settling with matching them. Walmart recognizes that stores will be flooded with customers on Black Friday, so attempting to beat competitor’s prices will not increase store traffic. Leaving prices above those of competitors, however, will turn customers away.
Walmart faces a plethora of competition in the retail industry. With Black Friday, they are also competing with consumer electronic giants such as Best Buy and Fry’s Electronics. One main strategy Walmart is using is to open at 10pm Thursday night instead of traditionally midnight or early Friday morning. In fact, this strategy can generate more sales because consumers will go to Walmart before shopping at competitor’s stores. Walmart has also developed a dual-time strategy, where some products are sold at 10pm and electronics at 12am. While waiting for the big discounts on electronics, consumers will buy the other items on sale.
It is clear that social media and pricing strategies have played a monumental purpose in achieving sales and maintaining customer relationships. If used correctly, companies can become extremely successful in their industry just like Walmart.
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Note: The preceding post was written and researched by students in my Honors Marketing 351, Fall 2011 class, from the Mihaylo College of Business and Economics, Cal State Fullerton University, Fullerton California. Many thanks to their time, talent, and contributions to both their career and this marketing blog. Go Titans!
