If an alien with an accounting degree touched down in America, it might conclude that we’re a weird cult that spends 11 months living frugally and four crazy weeks buying tons of stuff we don’t need. It wouldn’t be entirely wrong, either. Retailers make around a fifth of their sales during the holiday season — close to half a trillion dollars — when the ratio of frivolous to necessary purchases spikes. It’s not unusual for large chains to operate in the red from New Years’ Day through Thanksgiving and then make it all up in those crazy weeks.
Black Friday, the day after Thanksgiving, is the single most manic, delirious shopping day of the year and, of course, the official beginning of the holiday-buying frenzy. Holiday binge-buying has deep roots in American culture: department stores have been associating turkey gluttony with its spending equivalent since they began sponsoring Thanksgiving Day parades in the early 20th century. And to goose the numbers, they’ve always offered huge promotions too.
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Black Friday relies on a few simple retail strategies that, with tons of customer data and forecasting software, have become fairly precise. One method is to sell everything as cheaply as possible and magnify a tiny profit through volume. Other stores mark down only a few high-profile items — even selling them at a loss — in hopes that customers will also throw a few full-priced items in their carts. Regardless, Black Friday is essentially a one-day economic-stimulus plan and job-creation program. Retailers use TV commercials and deep discounts, rather than tax breaks and infrastructure spending, but the effect is the same: billions of dollars, which would otherwise never be spent, make their way into circulation.