Canadians still seek Boxing Day sales despite Black Friday deals
Shoppers hunt for early morning Boxing Day bargains at a suburban electronics store in Toronto on Wednesday December 26, 2012. (Frank Gunn/ THE CANADIAN PRESS)
Lauren La Rose, The Canadian Press
Published Tuesday, December 23, 2014 7:03AM EST
TORONTO -- Boxing Day has traditionally been a bonanza for bargain hunters, but will earlier Black Friday promotions put a dent in post-Christmas sales?
Canadian retailers have sought to entice consumers to stick close to home with Black Friday sales, coinciding with price-slashing discounts offered in the U.S. after Thanksgiving in November. Yet as more homegrown businesses have started embracing the American shopping tradition, south of the border there are signs of fatigue.
Preliminary indicators suggested that the Thanksgiving and Black Friday weekend was disappointing for U.S. retailers. An estimated 133.7 million people shopped in stores and online, down 5.2 per cent from a year ago, according to a survey of 4,631 people conducted by Prosper Insights & Analytics for the National Retail Federation. Total spending for the weekend was projected to fall 11 per cent.
Michael LeBlanc, senior vice-president for digital retail with the Retail Council of Canada, said holiday promotions are "better seen as a marathon than a sprint" as retailers aim to meet consumers' needs as well as their own targets.
"Retail is such a fiercely competitive industry that different retailers are going to take different approaches to how they run their promotional calendar," LeBlanc said from New York.
"Some will choose not to participate in Black Friday and Cyber Monday. For some, Boxing Day is a major event and will continue to be. But for sure, Black Friday and Cyber Monday will take some purchases away from a Boxing Day sale potentially -- people doing self-purchase, as we describe it ,or early gift-giving."
Meanwhile, Boxing Day has become a prime time for shoppers to cash in gift cards obtained over the holidays, he added.
Ian Lee, assistant professor with the Sprott School of Business at Ottawa's Carleton University, said while the Black Friday phenomenon has extended the holiday shopping season until the week of Boxing Day, it is not generating net new sales.
"All they're doing is playing musical chairs and shifting the sales so maybe one company has a better sales promotion campaign, it's more aggressive, so they're attracting customers to come into their stores instead of the other guys' stores," Lee said from Warsaw.
LeBlanc said pricing is just one tool in the retailer arsenal, noting that companies can also distinguish themselves from competitors by offering exclusive goods.
"Retailers will start working on that in January of the year of what products are going to be offered," he said. "To get their best cost, that means they're buying well in advance. To the degree they want to set Boxing Day or Boxing Week as a couple of items to spectacularly gain attention versus their competitors, they'll do that."
Boxing Day was traditionally driven by retailers seeking to clear out leftover inventories to make way for winter merchandise, noted David Soberman, professor of marketing at the University of Toronto's Rotman School of Management.
"Boxing Day is a holiday that has its historical origins in the supply side argument as opposed to a demand side argument. I think that that will still be there," said Soberman. "Of course, given that there are specials on, it still raises the question as to whether or not people will come out in the same numbers.
"I think it would probably be pretty safe to say they won't simply because people these days are more oriented to shopping online; and when you shop online, what this means is that first of all, you're going to look for a bargain online. And the second thing is that you can even compare the prices that you see in Boxing Day sales to online sales.
"I would argue that smart online retailers will react to their competition, so the natural reaction to price reductions by one competitor is for you to reduce your prices as well."
Some retailers are already getting a jump on offering end-of-year bargains.
Amazon.ca announced plans to feature new Boxing Day deals daily beginning Tuesday until Dec. 29, mirroring an early promotional move made by the online retailer last year. Best Buy will launch its Boxing Day sale online on Christmas Eve.
A online survey commissioned by cash-back shopping site Ebates.ca found that about 40 per cent of Canadians plan to shop on Boxing Day, with most planning to buy clothing (69 per cent) followed by electronics (63 per cent), said general manager Adrienne Down Coulson. When the same question was posed about Black Friday and Cyber Monday in November, the categories were reversed.
Down Coulson said while participating in Black Friday and Cyber Monday promotions is "much less optional" for Canadian companies today, she doesn't foresee a huge impact on Boxing Day.
"Boxing Day is still one of the biggest shopping days if not the biggest shopping day in Canada. So as a retailer, they've got to be aggressive if they're going to compete," she said.
"The consumer wins. Pretty much anything is on sale all the time."
Lee said he thinks Boxing Day still has an advantage in the minds of consumers.
"I'm somewhat more skeptical about Black Friday and Cyber Monday because as they introduce and extend these sales, people become more cynical and they start to discount the sales saying: 'Well, you know they're not really that great a deal.' Whereas I think consumers understand intuitively the Boxing Day week sales are going to be better deals, although because there's a lot less stuff on the shelves, it's much more hit and miss."
With files from the Associated Press