Why is the TV still king of Black Friday? Although not the No. 1 seller, they entice shoppers

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Minneapolis Star Tribune

Shoppers are in the mood to shop this holiday season with a level of consumer confidence not seen in 20 years. Front and center in the Black Friday ads this year was the same item that stores such as Best Buy, Target and Walmart have been featuring for 15 years: the flat-panel, big-screen TV.

They’ve become such a hot commodity on Black Friday that Best Buy instituted a number system for limited-quantity doorbusters about a decade ago to minimize the chaos. Even retailers not known for selling electronics — J.C. Penney, Kohl’s and Menards, to name a few — often include them in their Thanksgiving Day circulars.

But why do retailers still count on TVs to seize shoppers’ attention when they aren’t one of Black Friday’s biggest sellers?

“They’re just plain eye-catching. They’re big and imposing and make a visual statement,” said Carol Spieckerman, a national retail consultant and strategist. “Retailers play on our fear of missing out on the latest technology. It’s all about the latest and greatest technology.”

It’s surprising on one level that televisions have remained so ubiquitous in Black Friday offerings. The number of televisions per U.S. household was 2.6 in 2017, down from 2.9 in 2012, according to market research from the NPD Group. And only 6 percent of TVs are purchased as gifts. The number of TVs sold, according to NPD, is expected to continue declining as consumers’ video viewing habits continue to migrate to computers, phones and tablets.

Despite lower overall sales, retailers aren’t concerned. “This year even more TVs than usual are being offered,” said Paul Gagnon, executive director of technology, media and telecom at IHS Markit in California. “It’s an indicator that it’s still a hot category. Improved technology and falling prices keep customers coming back for more, at least for their main set, often in the living room.”

Features such as 4K (the successor to 1080p) and High Dynamic Range (HDR) boost brightness, contrast and color for incredible resolution. Smart TV features connect a TV to the internet for an endless array of entertainment options. “These technologies are becoming more affordable for customers, so they’re especially exciting for holiday shoppers,” said Luke Motschenbacher, vice president of merchandising at Best Buy, in an e-mail. Consumers also find TVs easy to shop for, especially on Black Friday, because they know a good price when they see it.

Since the recession, many Americans have become more price-sensitive. “Regardless of social class or income levels, everyone wants a deal,” said George John, professor of marketing at the University of Minnesota’s Carlson School of Management. At sale prices that are hundreds of dollars less than the original price, many TVs promoted from Black Friday to Cyber Monday are loss leaders, sold for less than the wholesale price. But it’s unlikely that it’s the retailer footing the entire bill.

“Manufacturers pay for most of the loss,” said Stephen Baker, electronics analyst at NPD. “But even if the manufacturer is losing hundreds of dollars per set, each store has a limited quantity.” The attractiveness of the TV for retailers is that even if a store makes little or no profit, it can recoup on accessories. “TVs are now hubs for add-on purchases such as HDMI cords, soundbars, antennas and wall mounts,” said Spieckerman, the retail consultant. “These high-margin accessories make up for the low-margin TV.”