Black Friday deals no guarantee of retail bonanza

Canadian retailers are pulling out more stops this year to lure bargain hunters on Black Friday, but the promotional blitz may not reap the bottom line rewards many stores are hoping for.

From B.C. to the Atlantic provinces, malls are opening before sunrise as the U.S. shopping phenomenon pegged to the day after American Thanksgiving makes further inroads north of the border.

Very simply, the consumer in Canada hasn't really become comfortable with the concept.- Ryan Brain

But as much as retailers are hoping shoppers will be in a buoyant mood this far ahead of the traditional Christmas shopping season, there's no guarantee their purchases will have a significant impact on retailers' fortunes.

"Very simply, the consumer in Canada hasn't really become comfortable with the concept," says Ryan Brain, a partner and consumer expert with consulting giant Deloitte Canada in Toronto.

Brain sees a couple of reasons Canadian shoppers have not fully embraced the Black Friday phenomenon.

"We haven't grown with the concept here in Canada, so like anything, it perhaps will take some time," he says.

But another key factor is that Canadian consumers are turning more and more to retailers' websites rather than just heading to stores.

Online shopping is increasing "to such a degree in popularity that it's really the customer that dictates when they shop, how they shop, what they want," says Brain.

"The notion of a Black Friday just doesn't really mean much if you’re totally in control of the shopping experience."

Trying to take control

Retailers, however, are doing what they can to exercise some control over the consumer dollar by offering shoppers plenty of opportunities to go to stores in search of Black Friday deals across Canada. In some cases, the retailers and shopping mall managers have ramped up their Black Friday strategy significantly over last year.

Shopping centres across the country that are managed by Cadillac Fairview are opening a few hours earlier Friday in response to what company officials considered was a good pilot project at nine properties — mostly in Ontario — a year ago.

"It was very successful," says Wendy Greenwood, director of marketing for Cadillac Fairview's Ontario portfolio.

"Our traffic was up an average of 22 per cent and this year we expanded the program nationally."

That means centres will be opening generally at 7 a.m. (8 a.m. in Quebec), while in Toronto, the flagship Eaton Centre downtown opened at 6 a.m.

The first 100 shoppers to arrive at the guest services desk at each centre were set to receive a $10 card that can be used at any store in any Cadillac Fairview property.

This year's early openings are something of an evolution for the company. A few years ago, it would receive a few requests for early openings on Black Friday from U.S. retailers operating stores in their centres.

"But we've now found even our Canadian retailers just love Black Friday," Greenwood says. "They like to kick-start the holiday shopping season early. It helps to keep the dollars in Canada, keep people shopping locally instead of going across the border on Black Friday, because it's a big shopping day in the U.S."

'Significant sales occasion'

At Future Shop stores across Canada, doors open at 6 a.m. (8 a.m. in Quebec), the same time as they would open on Boxing Day and a Black Friday first for the electronics retailer.

Communications manager Elliott Chun says Black Friday has become a "very significant sales occasion" for Future Shop.

Chun wouldn't disclose specific figures, but said the company is "seeing double-digit growth in terms of our sales when you look at both the Black Friday weekend and Cyber Monday," which falls on Dec. 2 this year.

Cyber Monday is another American marketing term, designed to encourage consumers to shop online for even more prospective bargains on the first Monday after U.S. Thanksgiving.

Every year there seems to be a heightened interest for Black Friday.- Elliott Chun

Chun says the move to earlier Black Friday openings this year was prompted by the "year over year foot traffic, web traffic and sales increases we're seeing since 2009."

"Every year there seems to be a heightened interest for Black Friday."

Other retailers also appear to pulling out more stops with Black Friday promotions this year.

At RedFlagDeals.com, a website and app for bargain hunters, a "Black Friday and Cyber Monday" page is chock full of flyers for major retailers like Wal-Mart and Best Buy.

Spokeswoman Fiona Story says the website has been seeing "exponential growth" since it started offering Black Friday deals about five years ago. At that time, there were just two Black Friday deals from Canadian retailers.

"We're now looking at 200 deals as of last year … and we expect that number to grow as well," she says.

What about Boxing Day?

Story says she expects growth "could approach Boxing Day level in terms of retailers getting involved. But Boxing Day is still really the largest one in Canada. It will still be smaller than that but we are seeing it start to catch up a bit more."

Still, for all the efforts retailers are putting into trying to lure customers, there is no guarantee their bottom lines will be significantly bolstered once all the Black Friday sales have been tallied.

Marion Chan, principal of TrendSpotter Consulting in Toronto, says that within the retail landscape of Canada, competition has "just been ratcheted up so much" with the arrival of so many U.S. retailers.

"The big push is promotion, promotion, promotion and all that is doing is just driving down the profit margins of everybody involved." 

"It's great for the consumer," Chan says. "But it's not so great for the overall economy. Our retail economy … can't survive on this kind of constant promotion and so to have yet one more day when they're going to slash their prices, something's going to have to give."

In her mind, that means retailers "can't have both Black Friday and Boxing Day."

She's not sure Black Friday is the day for Canadians because "it doesn't mean anything to us," and doesn't seem to have much context beyond being a big kickoff day for holiday shopping in the U.S.

"Canadians will vote with their dollars," she says.

"If consumers come out in droves for these Black Friday sales, then we know they want it, but it's not going to help our retail economy at all."