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🔥Hot Take Alert #9: No You Shouldn’t Do a Black Friday Promotion
The history of Black Friday, some of the best alternatives, and what I think should be on your holiday shopping list this year
Hi there, it’s Adam. 🤗 Welcome to my weekly newsletter. I started this newsletter to provide a no-bullshit, guided approach to solving some of the hardest problems for people and companies. That includes Growth, Product, company building and parenting while working. Subscribe and never miss an issue. I’ve also got a podcast on fatherhood and startups - check out Startup Dad here. Questions? Ask them here.
Welcome to another 🔥 Hot Take Alert 🔥 where I opine on something that I feel very strongly about and occasionally try to make it a little bit better. I don’t expect you to agree with all of them but please keep an open mind. Or don’t. It’s your subscription.
Past 🔥 Hot Take Alerts 🔥 have included:
My first job out of college was at the headquarters of the retail store chain Mervyn’s. If you’re familiar with this brand you either 1) grew up in California or 2) are old. Maybe both. Mervyn’s existed in a time before online shopping had really become ubiquitous—Amazon was only a few years past being a bookseller, Shopify hadn’t been invented yet, and Alibaba was a full 10 years away from going public.
So, Mervyn’s didn’t really sell stuff online, but we did have one special day to look forward to: Black Friday.
For those of you who are unaware of Black Friday: it’s the day after Thanksgiving in the United States and is increasingly “celebrated” in other parts of the world (or so I’m told). It’s a retail holiday that has become the official start of the holiday shopping season.
I hate Black Friday. Well, hate is a strong word, so I’ll just say that I strongly dislike Black Friday. More specifically, I think in recent years we’ve completely lost the plot; especially for those companies that don’t sell gifts or seasonal items.
I did a little spelunking through the history of Black Friday and thought I’d share it with you all as a fun holiday treat. Alongside some of my favorite Black Friday promotions of all time. And then I’ll end with why I think you shouldn’t do a Black Friday promotion.
Historically “Black” Friday has held a negative connotation. Its first use appeared in 1869 in reference to the crash of the U.S. gold market (not near Thanksgiving and not related to shopping). This crash put the U.S. into an economic tailspin for many months and we only narrowly averted an early version of the Great Depression (don’t worry, that would come 60 years later).
The first time Black Friday was used in the retail context was in Philadelphia in the 1950s. This time, it was used by the police. The Army and Navy football teams used to play each other on the Saturday after Thanksgiving. And on the Friday before that (the day after Thanksgiving) there would be mass chaos as giant hordes of shoppers and tourists rolled into Philadelphia in advance of the game. The police used the term “Black Friday” to describe this chaos!
Eventually Black Friday was usurped by the retail industry who wanted to put a more positive spin on the term in the late 1980s. The intention was good—let’s focus on the “good” elements of the holiday shopping season. The retail holiday became known for the day that physical retailers would get back in the “black” or profitable after three quarters of losses. This was because they finally had enough sales to overcome the high fixed overhead associated with all their physical space, logistics, etc.
In the decade from ~2009 to 2019 Black Friday continued to creep earlier and earlier with retailers starting sales and opening stores on Thanksgiving day. After all, who wouldn’t want to fill up on tons of food and then wait in line to get that special 60-inch television?!? COVID in 2020 ended this slow and steady creep because it was generally bad for huge hordes of people to gather in person. Most people turned online instead.
Now, as we enter the 2023 holiday season Black Friday is upon us once more. You’ve seen it already—your email inboxes are full of Black Friday promotions.
Beyond the fact that Black Friday is an “invented” holiday, much like Sweetest Day, the number of companies who have gotten into the act is astounding. Black Friday has become just another day to offer really steep promotions for just about everything. It no longer has any relationship to getting into “the black.”
We now have B2B SaaS companies offering Black Friday deals. Really? Does your AI powered workforce collaboration tool need a Black Friday discount? Are we trying to spread the holiday cheer with big savings on that sales automation platform?
Lest you think I’m a scrooge-like curmudgeon, here are a few of the practical reasons why I think most products offering Black Friday deals is silly:
It devalues your product. Yesterday your SaaS tool was $20/month and today it’s $10? Right. Why would I go back to paying $20?
It trains people to wait for discounts. If you’re a retailer with a relatively infrequent purchase cycle you’re signaling to people that if they just wait long enough you’ll offer them a promotion.
It doesn’t engender loyalty. Much like Groupon created an entire class of disloyal bargain-seekers so too does Black Friday.
It’s often a psychological trick. Many retailers inflate prices before the sales in order to make discounts seem more significant than they actually are.
Difficult to comp YoY. What do you do in the subsequent year(s) when you have to show an equivalent spike in revenue? Perhaps a deeper and wilder discounting strategy. This quickly becomes a race to the bottom.
So what should you do instead?
Great question. For pretty much every company it’s too late now. Their Black Friday strategy was baked months ago and it’s ready to come out of the oven.
But here are a few of the most interesting, historical Black Friday campaigns that created a lot of awareness without the headaches above. These companies leveraged the fervor around Black Friday to create some Company Generated Content that paid dividends for years in the future.
Cards Against Humanity (CAH)
CAH is the 🐐 of Black Friday campaigns. In 2013 they actually raised prices. They’re famous for their 99% off sale. And one year they actually sold nothing but collected money anyway. That’s right. They closed the store and told people they could “Give CAH $5.” They made nearly $72,000. In 2015 they asked people to pay them to dig a giant hole and live streamed the whole thing. It worked.
This works so well for them for a few reasons:
It creates real buzz and free attention. This is essentially company generated content that everyone wants to talk about. In a sea of deep discounting it’s the polar opposite.
It supports their brand. CAH has a “damn the man” anti-hero brand. This furthers that.
It positions them as an everyday affordable option. When you look at all the ridiculous things they’ve done and the big sums of money collected then $29 doesn’t seem all that expensive.
REI #OptOutside and Patagonia
Outdoor brand REI started closing their doors on Black Friday in 2015 and instead encouraged people to go outside. They have since made this permanent and introduced it as an employee benefit directly counter to the stories of companies having employees work on Thanksgiving day.
In 2011 the brand Patagonia took out a full-page ad in the NY Times showing one of their jackets with the headline “Don’t Buy This Jacket.” It was a nod to their opposition to the growing consumerism of Black Friday AND a message that their products last a very, very long time.
For both Patagonia and REI, two brands with similar missions, these campaigns brought attention to both the high value of their products as well as, in the case of Patagonia, calling attention to their Common Threads Initiative.
Both Imperfect Foods (my alma mater) and its parent company Misfits Market created programs to donate food rather when you travel (rather than skipping a box). Not only does this showcase their mission but it’s a way to continue to capture revenue when people are feeling charitable.
Wrapping it Up (plus my favorite products this holiday season)
We’re just a few days away from Black Friday and I expect to see a whole new set of entries in the “favorite campaigns” category. If you’re at all like me, and based in the U.S., you’ll be avoiding the stores and instead spending quality time with friends and family, feasting on leftovers and warming yourself by a fire.
But if you plan on braving the crowds and experiencing the majesty of Black Friday in person I wish you the best of luck on your journey. May your shopping cart be filled with some of the gifts below.
A few of my favorites (note: I don’t get anything for recommending these products):
Lomi - This is a countertop food composter. It turns your food scraps, napkins, coffee filters, etc. into sweet-smelling, earthy compost in a handful of hours. You can then walk outside and dump it into your garden. They’ve got a Black Friday deal happening right now, but I would gladly buy this product at full price.
Shure MV7 Microphone - I use this microphone for podcasting and all of my live, virtual meetings. It’s a unidirectional mic which means you have to be closer to it but it won’t pick up room sounds the same way an omnidirectional mic will.
Waterfield Laptop Bag - These leather bags are made in San Francisco in small batches. I have an older version of this one and it is my favorite minimalist laptop bag ever. I can’t tell you how many compliments I’ve gotten on this bag. Support a local business and buy from Waterfield.
Ten Thousand Interval Shorts - Perhaps the only product I exercise in. Comes in a whole bunch of colors, has a built in liner, amazing venting and even some non-intrusive pockets. Highly recommend.
For Kids: The Allowance Game - Slightly less advanced than Monopoly and equally fun. This game teaches younger kids about the concept of money since every turn involves earning an allowance or spending money. The numbers are single dollar and cents so it’s good for mental math too!
Happy Thanksgiving 🦃 🍁 to all who celebrate. See you next week!