We should cancel Black Friday and start our holiday shopping early
Bloomberg Opinion — Decades ago, it was taboo to sell Christmas products before Thanksgiving. Marketers wanted to focus on a day of mass shopping that came just after Americans celebrated and dined with their families – it was the big commercial candy they were counting on to get out of the black spot. That’s how Black Friday began.
The taboo has long since been broken, and stores offer Christmas items earlier every year. Costco ( COST ) even sold Christmas trees in August. Now, selling these products before Thanksgiving is more acceptable. Even the celebration of Halloween, very traditional in the United States, has been sidelined as Christmas decorations take up shelf space.
More traditional people might be upset about this, but it will surely be a positive for a strained supply chain. If retailers can get consumers to shop earlier to ease the problem December period, products can flow more easily.. Holiday sales that begin in October are great for United Parcel Service ( UPS ), FedEx ( FDX ) and Amazon ( AMZN ), which ramp up capacity for six weeks each year to handle increased purchases. If demand becomes more distributed, the need for more employees and storage capacity is reduced. Retailers would also not have to hire more temporary staff.
Last year, holiday gift shopping was dramatically anticipated with warnings that supply chain problems would leave shelves empty and ruin Christmas. The supply chain, normally an obscure step behind the scenes of global trade, has become a household term as problems in ports, railways, highways and warehouses hit the headlines late last year. Merchants did their promotions in advance and the public reacted accordingly.
The result was that UPS and FedEx shipments increased in October and November compared to the previous year, and decreased in December. Overall, monthly retail sales fell 2.5% in December, after rising 1.8% in October and 0.2% in November, according to the Census Bureau.
The early buy campaign is expected to be repeated this year to encourage the habit of spacing physical and online sales by two or three months instead of concentrating them in a frenzy of a few weeks at the end of the year. Just to give you a sense of the load this spike puts on the mounts: UPS has announced plans to hire 100,000 temporary workers by the end of this year – the same number as in recent years.
Rising demand for e-commerce during the pandemic, especially during the holiday season, has allowed UPS and FedEx to increase shipping rates by more than 20% since 2019. Both companies have limited the amount of packages transferred, forcing retailers to look for alternatives . Delivery startups have responded to this demand, including even the delivery company DoorDash. If there had been more deliveries in October and November, retailers would not have been so tight in December.
The convenience of e-commerce has become ingrained in our lives, so we will continue to see an increase in shipments during the traditional peak period, even as more people shop in advance. But the pace will be more normal, says Marc Gorlin, who founded and still runs same-day delivery company Roadie, which UPS bought last year.
Retailers will be more motivated to improve their holiday offerings as inflation erodes consumer budgets, Gorlin said in an interview. Retailers are also very interested in releasing merchandise to reduce overstocked inventory.
Traders have already started bringing their products this year. Retail imports, measured by used containers, rose more than 5% in the first six months of 2022 compared to the first half of 2021., according to the US National Retail Federation. In July, the number of retail containers fell compared to the same period last year, which is only the third drop in two years of consumer spending during the pandemic. Volume is expected to fall 3.2% in the second half of 2022, according to the federation.
This should somewhat ease the supply chain, which is certainly better this year than last year, but is still in trouble. The warehouses are full of products and do not have enough staff to unload the trucks quickly. Railways suffer from poor service, which affects the movement of containers and can cause congestion at ports.
This year’s port congestion has reached the eastern US, hitting the port of Savannah, Georgia, hard as carriers diverted their cargo from the West Coast amid fears of a possible strike by officials over contract negotiations. Even more ominous is the possibility of a railroad strike if the unions do not reach a labor agreement with more than 30 railroad workers by September 16. Any of these events would be terrible for the holidays.
Whether you’re looking to beat the competition with holiday discounts, reduce inventory, or keep your order shipping costs down, it makes sense to start your holiday shopping season now. And next year too. This should become a new tradition, not the news of shoppers swarming stores and chasing discounted merchandise right after the Thanksgiving holiday.. The lifespan of Black Friday, and even its latest version – Cyber Monday – has come to an end. The December sales peak should level off permanently.
This column does not necessarily reflect the opinion of the editorial board or of Bloomberg LP and its owners.
Thomas Black is a columnist for Bloomberg Opinion covering logistics and manufacturing. He wrote about American factories and shipping and about Mexican industry, economy and government.
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