Business

Black Friday losing appeal for cross-border shoppers

With the weak Canadian dollar and the growth of online shopping, analysts predict more Canadians will stay home this year rather than join the mass shopping hysteria that pervades U.S. retailing the day after American Thanksgiving.

Popularity of online shopping and weaker loonie contribute to waning enthusiasm

An exhausted shopper sits on the ground of the 34th Street subway station on Black Friday in New York during last year's shopping frenzy. (Carlo Allegri/Reuters)

With the weak Canadian dollar and the growth of online shopping, analysts predict more Canadians will stay home this year rather than join the mass shopping hysteria that pervades U.S. retailing the day after American Thanksgiving.

Friday's shopping event could also be losing steam because retailers now offer sales year-round, instead of focusing on traditional shopping days like Black Friday or Boxing Day in Canada, according to Warren Shiau, the director of buyer behaviour research at IDC Canada, a market research firm.

"It's not necessarily the be-all and end-all anymore," he says.

Black Friday has also been embraced by retailers on this side of the border, reducing the need for Canadians to travel south.

And a backlash has been growing against the consumer shopping frenzy, prompting some — even retailers — to call for a time-out.

Weak dollar

The Canadian dollar, hovering around 75 cents US, is much lower than it was in November 2014, when it was around 88 cents US, and November 2013, when it was about 95 cents US.

"When we're close to parity or even somewhere over 85 cents US, a lot of U.S. prices look more attractive to us, and of course they do even more so when they're discounted on Black Friday," says Ambarish Chandra, an economics professor at the University of Toronto.

"But at 75 cents, what that means is it's suddenly a whole lot more expensive."

Chandra says many deals are so good on Black Friday that some Canadians are still willing to suffer the exchange rate. But there is a direct relationship between the strength of the dollar and how much people will shop in the U.S. 

Michael LeBlanc, the senior vice-president of the Retail Council of Canada, expects fewer Canadians will cross the border this year in pursuit of discounts.

"Shopping becomes far less compelling when the dollar is where the dollar is today," says LeBlanc. 

People sort through boxes of shoes in Macy's to kick off Black Friday sales in New York last year. The shopping event is notorious for big deals and even bigger crowds. (Andrew Kelly/Reuters)

Changing retail cycle

Meanwhile, more Canadian stores are participating in Black Friday.

"Canadian retailers are adopting the holiday — they're competing, so to speak, on a level playing field," he says. 

Shiau sees a decline in Black Friday shopping overall because the retail cycle has changed — there used to be big sales on days like Black Friday or Boxing Day in Canada.

"But now, the reality is that there's a deal every week from somewhere."

Both Shiau and LeBlanc say the retail cycle has been accelerated, and the increasing popularity of online shopping has created more competition.

Before, Shiau says, consumers were limited to local stores and mail orders. Now, they have dozens of choices from all around the world.

That means the once tempting Black Friday deals are now often far less enticing.

"The actual deals on Black Friday have become lesser and lesser in the actual discounting," says Shiau. "In a lot of places now, Black Friday is 10 per cent off. And what kind of deal is that?"

Although some retailers have cut back on opening their stores at the crack of dawn, Chandra still expects a busy shopping day.

"Maybe the initial novelty has worn off, but those deals are still there, and at least in the U.S., U.S. shoppers will be out in force just as much as before."

A protester demonstrates outside of Macy's in Herald Square during Black Friday in New York in 2014. Some companies, like Seattle-based REI, are encouraging people to enjoy nature instead of participating in Black Friday. (Carlo Allegri/Reuters)

Backlash against consumerism

Some U.S. stores prepare for the onslaught of shoppers like they're going into battle — a prime example from last year is a video of a Target employee giving an enthusiastic pep talk to his team ahead of the store's Black Friday opening.

An anti-consumerism attitude is also growing. The movement isn't new — Canadian alternative magazine Adbusters started Buy Nothing Day movement in the '90s — but it's been slow to gain mainstream popularity.

Last year, outdoor clothing company Patagonia encouraged its customers to trade their worn-out clothing for credits they could use to reduce the price of new items, or to trade for other used items. 

Now REI, a Seattle-based outdoor gear and clothing retailer, is taking a stand against Black Friday (while perhaps gaining some marketing points in the process). The company announced it would close all 143 of its stores in the U.S. on Nov. 27. The company is also giving its employees the day off — paid.

"Black Friday is the perfect time to remind ourselves of the essential truth that life is richer, more connected and complete when you choose to spend it outside," company president and CEO Jerry Stritzke said in a statement.

Others are organizing events like nature hikes throughout the U.S. on Nov. 27. 

And California-based non-profit Save the Redwoods League is sponsoring free admission to the state's national parks on Black Friday, presumably to encourage people to get fresh air, sun and exercise instead of basking in the fluorescent light of an electronics store, wrestling with other customers over the last discounted tablet.

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