A November 26-27 Wall Street Journal article described what Macy’s did to successfully run its day after Thanksgiving Black Friday sale based on knowledge. In my 25+ years researching business success and failure patterns, I have looked at how businesses use knowledge. The way Macy’s used knowledge about Black Friday fits patterns of business success that I find in my research. Thus, Macy’s made Winning Moves in its approach to Black Friday. And, what Macy’s did offers valuable lessons about the use of business knowledge.
Businesses succeed when they build on their strengths. Knowledge contributing to the understanding of the dynamics of the business is an important component of strengths. Formal market research studies are one source of knowledge, but they are hardly the only source. That’s why my March 2010 newsletter titled “Should Starbucks Do Market Research? Yes, But…” stresses the importance of paying attention to less formal sources of knowledge as well. Basically, knowledge can come from various sources ranging from extensive experience, to formal research methodology, to simply paying attention to what works and what does not.
Macy’s approach to Black Friday is an excellent approach to building knowledge. It incorporates a stepwise, evolutionary approach, which my research–and increasingly the research of others–finds associated with business success. It makes the effort to look for indications of what works and what doesn’t. And, what works is applied more broadly to the business.
Even back when opening at midnight for Black Friday was still rare, there were indications that it was very successful for the few who did so. In fact, I can personally attest to the fact that when the Premium Outlet Mall in Aurora, located on the far periphery of suburban Chicago, was one of the rare places opening at midnight for Black Friday, traffic on Interstate 88 approaching the mall was virtually at a standstill. Traffic backed up, not only on the exit ramp near the mall, but for a good part of the way to the previous exit, located four miles east, as shoppers approached the mall around midnight. Thus, Premium Outlets seemed to be doing well as an early adopter of midnight opening for Black Friday.
In the aftermath of the early adopters’ success, Macy’s tested its midnight opening for Black Friday. The Wall Street Journal article described what Macy’s did. Macy’s ran the midnight openings test last year in just six locations. Those midnight openings were both successful and informative. Then, after these early indications of success, Macy’s took its knowledge building a step further. It held a November 16 sale, so it could see what promotions worked best. In its knowledge gathering, Macy’s not only looked at which products were selling, but also at who was shopping. With this information from its pre-Thanksgiving sale, as well as with what it learned from last year’s six location test and from staying open 24 hours right before Christmas last year, Macy’s determined what promotions to run on Black Friday and who to target. As a result, Macy’s did very well on Black Friday.
Based upon my research into Winning Moves, what are the lessons from Macy’s Black Friday? Paying attention to what works and what does not, and applying what works in ways that fit your business is a Winning Move. The way Macy’s used this to target the teen market is also a Winning Move. Taking a stepwise, evolutionary approach, like Macy’s did, is a Winning Move. And, Winning Moves are what drive business success.
