Does Black Friday and Door Buster Deals Influence Customer Loyalty?

Black Friday is quickly becoming a national pastime; a shopping holiday tradition. In fact, over the past few years, Black Friday has become a major retail earnings indicator for the shopping season around the Holiday Season. In summing up the revenue share of the Black Friday weekend, Marshal Cohen, chief retail analyst at NPD Research Group, states that 25% of the total holiday spend will occur over the Black Friday weekend. But, the real question is whether the Black Friday activity is an indicator of sustainable shopping habits associated with particular brands. In the end, the retailers prefer loyalty and repeat business throughout the year, spending money on more profitable items.

 

The "Black Friday" phrase originated in 1966 in Philadelphia, but was really coined as a mainstream term associated with the Christmas Holiday season in 2003 after it achieved the #1 ranking of the busiest shopping day of the year. More recently, the clear objective around black Friday is to start the day off by attracting customers with door buster deals at 5am (or earlier) in hopes of each person walking out of the store with more than just loss-leading products.

 

Is there a loyalty factor amongst those that are lining up to barge through the doors at 5am in order to race their way to the best deals? I say maybe, but likely not. In order to understand whether a retailer is really capturing the long term earnings of these individuals, we need to make a few assumptions:

1. It is likely that any individual waking up at 2, 3 or 4am to get in a line (sometimes in the bitter cold) in order to score deep discounts on products that are limited (sometimes only 2-3 per store), is clearly acting on the motivation of pure savings and nothing else. If savings weren't the motivating factor, shopping during normal business hours would occur.
2. It is physically impossible to be in more than one place at a time. People have decisions to make and those that are braving the crowds at 5am are choosing one destination over another driven primarily by total net savings. Highest priority location is based on the best deal, not necessarily the loyalty of the consumer to the retailer.
3. Door buster patrons face the risk of being trampled and are doing so for the sake of getting a great discount on a particular item(s). Taking such a risk is usually not displayed by a person that is shopping purely for the sake of being loyal to a retail establishment.

 

On the flipside, there is an argument that supports consumer behavior and activity related to Black Friday shopping. Many brand loyal customers will in fact make their shopping rounds to preferred locations during the course of Black Friday. It is not clear to me that this same loyalty motivates the brand loyal consumers toward the door buster savings activity

 

Brand loyalty psychology is a vastly studied topic with numerous experts stating studies and research that support the reasons for brand loyalty. Bill Nissim, a brand management expert, cites research from Bloomer and Kasper that outlines the distinction between repeat purchases and brand loyalty. The clear distinction is based off of pre-meditated behavior prior to the action, which determines a loyal patron, versus a consumer that has repeat brand purchases. Of course, we aren't certain without conducting the right studies, as to whether or not the door buster consumer experience is in fact one that will sustain premeditated future purchases relating to the brand in question.

 

The consumer behavior black box model outlines buying patterns and breaks down the buying equation. However, I would jump out on a limb by stating that the key environmental factor in door buster deals is purely price motivation. Of course, with some consumers, it's the thrill of the chase and the experience of the season.

 

So, the original question "Do Black Friday and Door Buster Deals Influence Customer Loyalty?" still needs answering. My conclusion is No (to understand how loyalty is really captured, see Best Buy article). In reviewing many of the consumer loyalty equations and models, there are very few pieces of evidence that support the activity in creating such an experience to obtain future brand loyalty. Taking the motivational factors of the consumer and placing them against the retailer promotions, I can't see the mapping between the two activities. In fact, looking at the typical ratio of employees:consumers at any given door buster event, the consumer far outweighs the employee. One basic definition states that customer loyalty is achieved through satisfying, acknowledging, rewarding and following up with the customer. I find it hard to believe that any establishment can effectively and predictably map the long term benefit of customer loyalty to Black Friday. Of course, I'm willing to hear all arguments...