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Labor Market Information Center SD DEPARTMENT OF LABOR |
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LMIC Home South Dakota Home Department of Labor Home Search Feedback Contact Us |
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Holiday shopping: What will they think of next? |
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This article was published in the January 2008 South Dakota e-Labor Bulletin. Turkey Thursday … Black Friday … Cyber Monday … Green Monday … What will retailers think of next? With so much holiday marketing, even the Grinch wouldn’t be able to pass up those bargains! Are all of these newly-coined holiday shopping days making your head spin? You are probably in the majority if you are not even sure what a few of them are and whether they actually exist. Most of us think of Turkey Thursday as the traditional Thanksgiving Day, a time spent at home with family and friends eating excessively and watching football. However, it is now emerging as a “pre-shopping” day to get a jump on the mad holiday rush. Retailers are opening earlier and earlier every year, worried that the housing-market meltdown, credit crunch, and higher food and fuel prices will crimp consumer spending. Let’s move on to the infamous Black Friday. According to Wikipedia (the online encyclopedia), Black Friday is the day after Thanksgiving in the United States, marking the kick-off of the traditional retail season. Black Friday was so named because of the heavy traffic on that day and was an implicit comparison to extremely stressful experiences such as Black Tuesday (the 1929 stock-market crash) or other dark days in history. However, most contemporary uses of the name refer instead to a profitable business period, harkening back to when accounting records were recorded in red for loss and black for profit. Black Friday is the busiest shopping day of the year in terms of customer traffic. Although it is the day with the largest number of shoppers traipsing through the stores, it is not necessarily the biggest day of the year in terms of dollars spent. The image of shoulder-to-shoulder crowds rushing around grabbing bargains makes many choose to stay home and avoid the hectic shopping experience. This brings us to Cyber Monday. This holiday shopping day was invented in 2005 by the National Retail Federation’s online division, Shop.org, to create a marketing buzz around online shopping. It is the Monday immediately following Black Friday, when online retailers, offering special promotions and low prices, see a surge in online purchasing. For those who avoided the crowds on the previous weekend, who did not grab all the bargains they wanted or who are just looking for more great buys, shopping in the privacy of their own home or office has a certain appeal. Similar to Black Friday, Cyber Monday is touted as the busiest online shopping day of the year, with more than 4.6 million online visitors a minute. However, it does not generate the biggest online sales, although 2007 sales totaled more than $700 million. Finally, our newest shopping holiday is Green Monday. eBay, Inc. and its companies recently named this second Monday in December as the heaviest online shopping day of the season. No, this is not a day of eco-friendly purchasing. The name refers to the economic impact, rather than an environmental one. With total online sales of more than $880 million, Green Monday definitely has a big economic impact for retailers.
While the above figures reflect national data, South Dakota also sees a large increase in holiday spending. Taxable retail sales reported to South Dakota’s Department of Revenue and Regulation increased nearly 25 percent from the 2006 to the 2007 holiday reporting periods. The graph below and Table 2 show the percent change in reported taxable sales figures for retail trade in South Dakota. Usually the largest increases of each year are due to holiday spending in December, with other sizable increases during the summer tourism months.
Table 3 breaks down the taxable sales for the 2006 holiday period into various sales categories.
Sioux Falls and Rapid City continue to account for nearly half of the state’s taxable sales dollars due to their larger populations and the wider variety of shopping opportunities. Many shoppers travel there to shop at stores that exist nowhere else in the state. Table 4 shows the 2006 holiday retail trade sales for South Dakota’s top 10 cities.
With the passing of the holiday shopping season, it is not a surprise that consumers modify their spending habits. With credit card bills coming in and with everyday debt a continuing reality, they once again tighten their purse strings. Following the hustle and bustle and the onslaught of retail marketing efforts, retail trade in South Dakota decreased nearly 30 percent (see Tables 2 and 3) after both the 2005 and 2006 holiday spending seasons. We now have less than a year to recover from the whirlwind of 2007 holiday spending. Will the marketers create yet another shopping holiday before the 2008 season swings into view? Who knows? What will they think of next? |
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If you have questions or need more information, contact Hayley Hilton of the Labor Market Information Center at (605) 626-2314 or e-mail her at hayley.hilton@state.sd.us. |
