Shoppers are in the mood to shop this holiday season with a level of consumer confidence not seen in 20 years. Retailers have released sneak peeks of their Black Friday ads all month to whet their appetites.
Front and center in the Black Friday ads is the same item that stores such as Best Buy, Target and Walmart have been featuring for 15 years: the flat-panel, big-screen TV.
They've become such a hot commodity on Black Friday that Best Buy instituted a number system for limited-quantity doorbusters about a decade ago to minimize the chaos. Even retailers not known for selling electronics — J.C. Penney, Kohl's and Menards, to name a few — often include them in their Thanksgiving Day circulars.
But why do retailers still count on TVs to seize shoppers' attention when they aren't one of Black Friday's biggest sellers?
"They're just plain eye-catching. They're big and imposing and make a visual statement," said Carol Spieckerman, a national retail consultant and strategist. "Retailers play on our fear of missing out on the latest technology. It's all about the latest and greatest technology."
It's surprising on one level that televisions have remained so ubiquitous in Black Friday offerings. The number of televisions per U.S. household was 2.6 in 2017, down from 2.9 in 2012, according to market research from the NPD Group. And only 6 percent of TVs are purchased as gifts.
The number of TVs sold, according to NPD, is expected to continue declining as consumers' video viewing habits continue to migrate to computers, phones and tablets.
Despite lower overall sales, retailers aren't concerned.
"This year even more TVs than usual are being offered," said Paul Gagnon, executive director of technology, media and telecom and IHS Markit in California. "It's an indicator that it's still a hot category. Improved technology and falling prices keep customers coming back for more, at least for their main set, often in the living room."
Features such as 4K (the successor to 1080p) and High Dynamic Range (HDR) boost brightness, contrast and color for incredible resolution. Smart TV features connect a TV to the internet for an endless array of entertainment options.
"These technologies are becoming more affordable for customers, so they're especially exciting for holiday shoppers," said Luke Motschenbacher, vice president of merchandising at Best Buy, in an e-mail.
Consumers also find TVs easy to shop for, especially on Black Friday, because they know a good price when they see it.
"Nearly every consumer knows that $80 for a 32-inch flat panel isn't typical. It's enticing," said Jim Willcox, senior electronics editor of Consumer Reports, referring to a Polaroid 32-inch set in Target's Black Friday ad preview.
But it's the deals on bigger sets, 55 to 65 inches, that get shoppers to line up for hours, even days, in the cold, he said. Target tempts with an Element 55-inch set for $199.99, Kohl's a 58-inch Samsung for $549.99 with $165 in Kohl's Cash, and Walmart features a 65-inch TV from Sharp or TCL for $398.
Such doorbuster prices have conditioned shoppers to wait until Black Friday to buy TVs, said Gagnon. "A 32-inch TV in 2008 was under $400. Today it's the same price for a 60-inch," he said.
Since the recession, many Americans have become more price-sensitive.
"Regardless of social class or income levels, everyone wants a deal," said George John, professor of marketing at the University of Minnesota's Carlson School of Management.
At sale prices that are hundreds of dollars less than the original price, many TVs promoted from Black Friday to Cyber Monday are loss leaders, sold for less than the wholesale price. But it's unlikely that it's the retailer footing the entire bill.
"Manufacturers pay for most of the loss," said Stephen Baker, electronics analyst at NPD. "But even if the manufacturer is losing hundreds of dollars per set, each store has a limited quantity."
The attractiveness of the TV for retailers is that even if a store makes little or no profit, it can recoup on accessories.
"TVs are now hubs for add-on purchases such as HDMI cords, soundbars, antennas and wall mounts," said Spieckerman, the retail consultant. "These high-margin accessories make up for the low-margin TV."
Baker said manufacturers and retailers work in concert to choose TVs that will be featured on Black Friday. Retailers' reps go to the factories in Asia to work out the specifications and pricing, and by July and August they've placed their Black Friday orders.
Retailers are counting on a stellar holiday, with sales expected to increase nearly 5 percent, according to the National Retail Federation. It will be the best sales increase in a decade if the estimates are met.
When planning which products will be featured in Black Friday ads, retailers look for products with broad, popular appeal.
"They like to choose products that consumers know the price of and can recognize a good price," Baker said. "Things that have seasonal appeal from an easily recognizable brand."
Many products are chosen because the manufacturer is helping to offset the cost of advertising, but TVs are often a good signature item because they help execute a theme, such as tech gadgets. "Nothing else checks off so many boxes for retailers like a hi-tech TV does," Spieckerman said. "It serves up entertainment, content delivery, engagement and visual appeal. And a guy can watch a game while his wife makes purchases."
A downside to low prices is that consumers are rarely getting the latest, greatest technology.
None of the doorbuster TVs offered this year include the jaw-dropping color and clarity of OLED TVs. A few retailers are selling them, but not as doorbusters, which are usually less than $500.
There's an LG 55-inch model from Best Buy for $1,700 and an LG 65-inch set from Costco for $2,650. Those prices seem steep now, but a few years ago, OLEDs sold for $5,000 to $8,000.
Experts say that because few manufacturers even make them, prices are coming down more slowly due to lack of competition. Prices are likely to decrease a bit next year but not significantly.
Don't expect the TV to fall from its Black Friday perch anytime soon, especially when manufacturers have already developed the next-gen of temptation: an 8K, 85-inch set with 16 times the number of HD pixels as 4K.
It's priced at $15,000 now, but wait five years. It could be the doorbuster of 2023.
John Ewoldt • 612-673-7633
