Shadow over Black Friday
Customers showed a cynical reaction to the Korean equivalent of Black Friday, which ended Wednesday. The event was orchestrated by the government to create a shopping boom to boost domestic consumption amid the alarming economic slowdown. Despite the government’s reassurances that the event helped fuel consumption along with the expectation of a 0.2 percent growth in the economy, one can hardly feel much fervor when shopping at major department stores across the country - except for that emanating from Chinese tourists who came to Korea during national holidays in early October.
On Black Friday in America, department stores usually sell fashion items, electronic appliances and luxury brands at discounts of as much as 70 to 90 percent. In Korea, however, consumer electronics firms and luxury goods companies didn’t participate in the event and no big discounts applied to fashion products. At every department store, a 70-percent discount applied to products in stock only, and most goods were sold at 10 to 30 percent discounts.
Market analysts point out that the government-driven event was destined to fail because it ignored Korea’s distribution system. But a bigger problem can be found in the motivation of the government in the first place. The government only underscored a need to “boost domestic consumption and raise our growth” through the event. It did not have any philosophy or detailed strategy on how to pique the interests of consumers, a primary goal of such marketing events. The government only tried to help department stores make money.
Manufacturers also disappointed consumers by devising sly ideas for the event. The Black Friday event in the United States cherishes the principle of “small profits and quick returns.” In other words, distributers seek to embody the interests of customers by giving up their profit margins in a big way. In Korea, big discounts are impossible because of distribution companies’ unwillingness to give up their commissions.
If department stores had really wanted to promote the interests of consumers, they should have given up some of their commissions and increased their total sales. But department stores didn’t do that. Black Friday should be a festival for companies and consumers alike. If the government wants to rejuvenate our lackluster economy, it must find effective ways to raise the interests of consumers.
JoongAng Ilbo, Oct. 16, Page 34