October 23, 2007 4:00 AM PDT
Wal-Mart plays Black Friday spoilsport
For those who trawl the Web hoping for an edge in finding the best price on the most sought-after item on their holiday shopping lists, finding Black Friday ads ahead of time helps plot out a retail attack. Tracking down the best bargains available on the day after Thanksgiving has become a game for both shoppers and the site owners, who race to see who can get the ads bearing the lowest prices online the earliest.
But Wal-Mart Stores isn't sharing Black Friday fans' fun. A note sent to about 10 Web sites from a Washington, D.C., law firm on behalf of the retailer warned of "criminal penalties" if the sites post any of Wal-Mart's Black Friday advertisements prior to November 19, four days before Black Friday. So far, Best Buy and Circuit City representatives have said they won't be taking legal action if their ads show up on the Web too soon, according to Reuters.
"Over the last couple years it's been kind of an arms escalation between the Web sites and the retailers," said Stephen Baker, vice president of industry analysis for The NPD Group. "Three years ago it was just a few token Web sites and nobody cared. But the last couple years they've been aggressively soliciting people to find these ads and send them in. Retailers have threatened lawsuits, and since most of these sites are small operators or a single guy, (they) can't really stand up to that kind of (legal) pressure."
So far, it appears Wal-Mart's threat has worked. Many Black Friday sites have said they will comply, though they're not happy about it.
vice president, NPD
In fairness, while it seems like Wal-Mart is being a spoilsport, the retail giant's ire is understandable: The ads are a valuable part of its pricing strategy, and when its competitors know of Wal-Mart's price-slashing plans early enough, they can alter their own prices midstream. Plus, the ads are copyrighted information, whether we like to think of them that way or not.
It's no secret that Wal-Mart is able to offer some of the best bargains in the retail business. So why should the biggest retailer in the world be concerned with a few one-man Web sites? "In general, Wal-Mart's competition knows that Wal-Mart is going to be the most aggressive guy out there, this year they know that as well, they just don't know (for example) the specific notebook model that will be $199," said Samir Bhavnani, analyst with Current Analysis West.
By sending the notices, Wal-Mart is admitting that it (and most other retailers) can't keep a lid on its holiday prices thanks to the many different entities (printers, publishers and others) that have a hand in creating the Sunday circular ads. So when all else fails, bring in the lawyers.
Wal-Mart did not send this type of notice last year, said company spokesman John Simley. While the company has had communication with some Black Friday Web sites before, never has it taken action this early. But Wal-Mart executives want to make clear what's out of bounds before the ads head to publishers.
"The idea is by the time you send a cease-and-desist letter (which some retailers have done in the past) it's already too late," Simley said. "This really is to prevent that from happening in the first place."
Every major retailer has a Web presence now too, which complicates the price-slashing game among retailers even further. "Nowadays you can be a lot closer to the point of sale because of the Internet" and still react, said Baker. "You can do Web-only specials, you can try to drive people to your Web site (to) buy online and pickup (merchandise) in the store."
As is to be expected, many of the sites were none too pleased with Wal-Mart's threat. BFAds.net posted this comment on its front page: "Let's be real here. Walmart is a corporate conglomerate that crushes small towns on its way to world dominance. We're a site on the internet that posts Black Friday Ads. Even if we were in the right in posting Walmart's advertisements, we in no way have the means or time to bother with a potential litigation." The site says it has no alternative but to wait until after November 19 to post any ads it may have received from printers or publications.
Messages posted to the forums on GottaDeal.com, another Black Friday site, show many shoppers vowing to call and e-mail Wal-Mart to voice their displeasure. Some, like commenter "christib327," couldn't understand Wal-Mart's decision. "I think this is crazy and will also be sending an e-mail. Honestly, the early release of the ads is what gets me excited and out there. Wal-Mart is usually at the top of my list to shop BECAUSE I've seen the ad early and can get my game plan together."
Simley said Wal-Mart had received a "few" feedback messages from customers about the Black Friday legal notices, though he refused to characterize the nature of the responses.
But a few unhappy people is probably an amenable tradeoff for Wal-Mart, since there are far more bargain hunters that will shop in stores on Black Friday that are completely oblivious to sites like BFAds.net or BlackFridayAds.com. And those are the people retailers are targeting with their specifically timed ads.
Also, Black Friday Web site fans aren't necessarily the best customers of the retailer anyway, Baker said. "They go to cherry pick a couple things really cheap. That's not going to make a lot of money (for retailers) in the short term or even long term." And though they would say otherwise, the Web masters behind those Black Friday sites are probably "overestimating" the importance of their sites in driving customers to stores, he added.
In other words, people are going to shop anyway. So in the long run, even if some customers are displeased, clamping down on its intellectual property is not only Wal-Mart's right, but it likely won't hurt it at the register come the day after Thanksgiving.
"This is America, nothing has an effect on shopping," Baker said. "Truly the biggest impact on Black Friday is the weather."
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