Retailers Hold Back on Black Friday Participation

The long-standing essence of discounts and promos during Black Friday seems to be weakening in the past, more so this year. JDA Consumer Survey conducted its own observation; found out that there will be lesser promo offers this coming Black Friday.

JDA Consumer Survey constitutes 1,000 shoppers, in which 47% said they plan to skip this year’s Black Friday or Cyber Monday. Furthermore, 73% of the respondents prefer to go shopping after the holiday season, waiting for better deals such as Amazon Prime Day. Another 34% said they change their mind in joining the 2016 Black Friday, even though they participated last year.

Responses from the survey indicate a decreasing trend of shoppers during the sale event that started last year. The obvious mindset of the shoppers affects the overall relevance of Black Friday.

According to Paula Rosenblum, the managing partner at RSR research and Forbes contributor said, “The basis of Black Friday is long since dead — the kick-off to the holiday season on a four-day weekend”.

The head of Your Retail Authority, Lee Kent said that “The only thing that makes Black Friday is the deals”. Shoppers come in for the discounts, Lee added, “If you offer them, consumers will come, but if you offer them on other days, the consumer has choices. It’s that simple!”

Online shopping factors in

Online shopping contributes in the diminishing Black Friday’s shoppers. Furthermore, retail stores started offering pre-holiday sales which grab more attention. This instance takes the focus off from the highly anticipated holiday retail sale.

Last week, in an online discussion of industry heads of the Retailwire Brain Trust, believed that e-commerce is not the only aspect affecting Black Friday.

As what Rosenblum stated, “E-commerce wounded the goose that laid that golden egg, but the year that retailers opened on Thanksgiving, they killed it once and for all.”

The CEO of Black Monk Consulting, Ryan Mathews thought otherwise. He said, “It isn’t online shopping that is killing Black Friday, it’s the fact that consumers have caught on to the hustle. Look how many people do their ‘holiday shopping’ after the holidays or even the New Year to capture real discounts.”

Bob Phibbs, the President, and CEO of The Retail Doctor believed that the widely available discounted sales of the retailer spoiled the essence of Black Friday. He said, “With the always-discounted retailer always available, the substance of Black Friday is gone, even if the marketing is still around,”

For employee’s sake

Apple, on the other hand, ignored last year’s Black Friday promotion in all of its stores. The company toned down the significance of the anticipated holiday season sale.

They want to eliminate ‘door busters’ stress and focus their attention on caring for their employee’s welfare during holidays.

BrainTrust members share Apple’s empathy towards their employees.

Rainmaker Solutions CEO ED Rosenbaum said, “It’s almost like the meal is over and the dishes are done so let’s get in line. This is what I object strenuously to. Retail employees deserve to spend the holiday with their family.”

He added that “If retailers learned to forget the greed and fear of being outdone by the competition, Black Friday could become a sales day with none of these openings before the sun comes up”.

Retailers amass a huge amount of profit during Black Friday promotions but “have a deleterious effect on associates”, according to Richard J. George, a Professor of Food Marketing at Saint Joseph’s University. For the Ph.D. graduate, Black Friday promotions can somehow label as one of the “failed retail experiments”.

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Yahoo’s Sudden Revenue Increase Places Merger with Verizon Under Hazy Cloud

Last Tuesday, Yahoo Inc. got an unexpected increase in their quarterly adjusted profit; this good news, however, has a slight effect on Verizon Communication due to the recent email hacking issue.

In 2014 almost 500 email accounts were hacked, which puts the $4.38 billion deal on shaky ground, Verizon’s general counsel said.

Customer loyalty

Recent profit increase shows that the data breach did not lead to a massive withdrawal of yahoo customers, as some had expected. Customer trends showed positive growth in page views and email usage, Yahoo said.

JMP’s securities analyst Ronald Josey says, even if the recent customer trends are “encouraging,” it’s too early for us to tell the long-term effect of the massive Yahoo hack.

“The message here is email and messaging is a very sticky product and people want to get to their messages,” Josey added.

The increase in page views and email usage could be “500 million people trying to figure out if they’re exposed,” says Fatemeh Khatibloo, a security analyst with Forrester Research.

Khatibloo added, loss of customers and lawsuits related to the breach, may affect the Federal Communications Commission’s vote to limit telecommunications companies to use customer data. Furthermore, it could encourage Verizon to back out of the deal.

However, the fact that Yahoo did not see a sudden decrease in users was a sign that email hacking may not lead to negative effects. For instance, results that could influence a deal with Verizon, says Scott Kessler, an analyst with CFRA Research.

“The bottom line here is from a fundamental operational and financial perspective, it doesn’t seem like much has changed at the company over the last quarter,” he added.

Verizon would need to prove that the breach leads to a material adverse change that would allow it to pull out of the deal, the legal expert says.

Profits still rising

Another bright spot for Yahoo was that profit from Mavens – short for “mobile, video, native, and social”, climbed up 24.2% to $524 million. This made Chief Executive Marissa Meyer brag about its growing businesses.

However, despite good standing with Mavens, Yahoo, in general, is still failing in major profit categories. Gross profit dropped 14.1% to $752.5 million.

According to Thomson Reuters I/B/E/S, Total profit hiked up to 6.5 percent to $1.31 billion, just beating the average analyst estimate of $1.30 billion. But after deducting fees paid to partner websites, profit went down to $857.7 million from $1 billion.

In a statement last Friday about Verizon deal, Yahoo said, ‘it would not hold a call or webcast after the release of the results’.

Meanwhile, Analyst at Needham & Co said on Tuesday that Yahoo’s decision to not disclose anything about the deal cast doubts, which lead to the downgrade of their stock rating from “Buy” to Hold.”

Yahoo shares closed up 1.3% on Tuesday extended trading session.

For the third quarter ended Sept. 30, net income attributable to Yahoo jumped to $162.8 million, or 17 cents per share, from $76.3 million, or 8 cents per share, a year earlier.

Excluding some items, Yahoo gained 20 cents per share, beating analysts’ average estimate of 14 cents.

Verizon acquired Yahoo for $4.4 billion last year, which includes Yahoo’s search, email, and messenger assets as well as advertising technology tools with its AOL unit

Major revamp after acquisition

The acquisition would revamp Yahoo into a holding with a 15 percent stake in Chinese e-commerce company Alibaba Group Holding Ltd and a 35.5 percent interest in Yahoo Japan Corp as well as Yahoo’s convertible notes, certain minority investments and its non-core patents.

The deal should close in early 2017, after which Yahoo plans to change its name and become a publicly traded investment company.

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