What is Black Friday?

By Albert Phung AAA
A:

Black Friday is a popular label attached to the Friday following Thanksgiving Day in the US. This day marks the beginning of the busy shopping season during which most consumers typically start their Christmas/holiday shopping.

While the word "black" often has a negative connotation, the use of black in this case alludes to profitability, which is traditionally noted in black ink (losses are noted in red). Traditionally, brick-and-mortar retailers see a surge in retail sales on this day as a result of the holiday shopping, putting their books "in the black".

Doorcrashers, special deals and heavy discounts on the most highly sought after holiday gifts are often offered by retailers in order to lure consumers into their stores in the hope that they will purchase other, higher margin goods. Some bargain hunting consumers have even been known to camp out overnight in order to secure a place in line at a favorite store. The contents of Black Friday advertisements are often so highly anticipated that retailers go to great lengths to ensure that they are not leaked out to the public beforehand.

For online retailers, there is a similar type of day on the Monday following Thanksgiving. Cyber Monday is known as the unofficial start of the online holiday shopping season as internet-savvy shoppers go to their favorite online retailers to do their holiday shopping. Similarly, online retailers also start promotions and sales on Cyber Monday in order to compete against the Black Friday offerings at brick-and-mortar stores.

There is also another, more infamous historical event linked to a disastrous Black Friday on September 24, 1869. On this date, speculators hoarded as much gold as they could get their hands on, causing the price of gold to skyrocket. However, on Friday September 24, 1869, the government Treasury intervened and the price of gold fell from $160 per ounce to $130 per ounce. This caused a ripple effect throughout the financial markets that resulted in a fall of more than 20%.

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