Black Friday Definition - Deepstash
Black Friday Definition

Black Friday Definition

Curated from: investopedia.com

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Black Friday has two relevant meanings

Black Friday has two relevant meanings

  • In history, Black Friday was a stock market disaster that happened on September 24, 1869, when, after a period of uncontrolled speculation, the price of gold crashed, and the markets crashed.
  • The contemporary meaning refers to the day after the U.S. Thanksgiving holiday, which has been a holiday itself for many employees. It is known as a day full of shopping deals and heavy discounts and is considered the beginning of the holiday shopping season.

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Black Friday and retail spending

  • Retailers may spend an entire year planning their Black Friday sales. They use this event as their chance to offer special prices on overstock inventory and discounts on seasonal items, such as typical holiday gifts.
  • Retailers also offer significant discounts on top-selling brands of TVs, smart devices, and other electronics, tempting customers in the hope that, once inside, they will purchase higher-margin goods.
  • Consumers often shop on Black Friday for the hottest trending items, which can lead to stampedes and violence in the absence of adequate security.

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"In the Black"

There is a theory stating that, when it comes to "Black Friday", the term "black" refers to being profitable, which comes from the old bookkeeping practice of recording profits in black ink and losses in red ink.

Retail businesses should be able to sell enough on this Friday (and the ensuing weekend) to put themselves "in the black” for the rest of the year.

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The origins of Black Friday

The term was made-up by the overworked Philadelphia police officers.

  • In the 1950s, crowds of shoppers and travelers flooded Philadelphia the day after Thanksgiving.
  • Philadelphia stores hosted major sales that day, but the city also hosted the Army-Navy football game on Saturday of the same weekend.
  • Because of the crowds, traffic cops were required to work 12-hour shifts, and they were not allowed to take the day off.
  • Over time, the annoyed and fatigued officers started to refer to this dreaded workday as "Black Friday."
  • The term became popular and spread to store salespeople who used "Black Friday” to describe the long lines and general chaos they had to deal with on that day.

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How Black Friday evolved

  • Black Friday become the shopping phenomenon event it is today in the 2000s when Black Friday was officially designated the biggest shopping day of the year.
  • Until then, that title had gone to the Saturday before Christmas.
  • Today, Black Friday is becoming an increasingly lengthy event: a Black Weekend

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Cyber Monday competition

  • For online stores, a similar tradition to Black Friday has arisen on the Monday following Thanksgiving. Cyber Monday is seen as the unofficial start of the online holiday shopping season.
  • The idea is that consumers return to work after the Thanksgiving holiday weekend, ready to start shopping.
  • Online shops often promote their sales prior to the actual day in order to compete against the Black Friday offerings at brick-and-mortar stores.
  • In terms of sales, Cyber Monday has proven to be a success among shoppers.

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The economic significance of Black Friday

  • The sales registered on Black Friday are frequently seen as a litmus test for the overall economic situation of the country and a way for economists to assess the confidence of the average American.
  • Those who follow the Keynesian hypothesis​ that spending drives economic activity view lower Black Friday sales figures as a harbinger of slower growth.
  • Some investors and analysts look at Black Friday numbers as a way to gaugemeasure the overall health of the entire retail industry.
  • Others suggest that it only causes very short-term gains or losses.

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