So when is the best time to buy consumer items? Is it always right at the start of the holiday season? According to an analysis in the Wall Street Journal, Black Friday ain’t necessarily when the best deals are to be had (The Myth of the Black Friday Deal, Oct 8). Check out the eye candy:
These numbers are from a study by a firm called Decide, which aims to be like Farecast for consumer products. It tracks online prices and flags when it is a good time to buy. The results show that different categories follow different patterns.
It turns out that gifts from Barbie dolls to watches to blenders are often priced below Black Friday levels at various times throughout the year, even during the holiday season, and their prices follow different trajectories as the remaining shopping days tick down.
Watches and jewelry, typical last-minute quarry for well-heeled shoppers, get more expensive as the season progresses, according to Decide Inc., the consumer-price research firm that gathered and analyzed the data for this article. Blenders, which might sit around for months if they aren’t bought in the holiday window, get much cheaper at the end.
At some level this isn’t all that surprising. Retailers want some deals at the start of the holiday season to create excitement but they cannot afford to have everything be a door buster. The pattern of jewelry and blender price then makes sense. If a watch is the fall back gift of the affluent (although that is not why I gave my wife a watch last Christmas), running up the price makes sense.
Two things strike me about these patterns. First, I wonder to what extent some external factors drive them. Take the watch example.
Decide tracked the price of a Citizen men’s black watch from 2008 through 2011 and found that the best time to buy it was early March, when the watch sank to $350 from its $600 list price. The average price for the watch on Black Friday and Cyber Monday was $379.
A March price drop could easily be driven by the supplier. If Citizen wants to release new models, it — like automakers — may need to throw some extra promotional cash at its channel partners in order clear out old inventory. Early spring when we are past the holidays but people haven’t spent everything on their summer wardrobes may be a very sensible time to do that.
A second consideration is whether this information is all that helpful to shoppers. Many of these items are purchased so sporadically that I wonder how useful it is to plan months out. For example, Elmo toys bottom out in March. My only take away from that is that your lucky if your niece’s second birthday falls in March because you can save a few bucks on making her happy. However, the window on when a kid wants that gift is so narrow it makes no sense to buy in March for the holidays.