Boxing Day losing its appeal with Canadian shoppers

[People go shopping in the Eaton Centre shopping mall in Toronto, December 7, 2012. (Reuters)]

If you’re planning to skip the Boxing Day sales this year, you’re not alone. Once considered the best day of the year for deals, Dec. 26 is increasingly losing its appeal for Canadian shoppers.

“For the longest time, Boxing Day was considered to be the day — and realistically the week — to enjoy lower prices,” Robert Soroka, a marketing professor at McGill University, tells Yahoo Canada News. “It was really a very exciting time because it was considered to be that one day of the year where you could essentially walk off like a bandit."

Nobody’s quite sure how Boxing Day, a holiday in most Commonwealth countries, began, but it’s generally agreed that the day stems at least in part in the Christmas tradition of giving to those less fortunate. Over time giving alms to the poor after Christmas evolved into getting up at 5 a.m. to hit the sales. In the 1980s Boxing Day became a major shopping event in Canada and the United Kingdom, considered the best day of the year for sales.

But Canada’s changing retail landscape continues to lessen the appeal of Boxing Day, Soroka says.

“The fact is that things have changed significantly over the years,” he says.

For many retailers the last few months of the year are their fourth quarters and a time when up to 40 per cent of their annual profits are made. Twenty to 25 years ago you’d never see prices slashed before Christmas, he says, because retailers knew that shoppers were going to be in stores no matter what.

“Anybody going into a store was ready to buy, so why would a retailer drop prices,” Soroka says.

The change began during the recession of the early 1990s, he says, when retailers were desperate to increase sales.

“A lot of retailers started offering these ridiculously low price points prior to Christmas,” Soroka says.

That habit stuck — many stores now start their Boxing Day sales before Christmas Day, and extend them past Dec. 26 for “Boxing Week” events. And the deals often kick in online on Christmas Day, which means that consumers can shop from home.

“What has happened over the last couple of decades is that consumers have become accustomed to getting low prices even before Christmas,” Soroka says. “It’s hard to unring the bell."

The rise of Black Friday 

The increasing importance of Black Friday — the day after American Thanksgiving in late November — in Canada is another factor driving down the importance of Boxing Day for Canadian deal hunters.

Black Friday is the day when retailers open early, have door-crasher sales and slash prices similar to Boxing Day here in Canada, with the convenience of occurring before Christmas.

Though our own Thanksgiving is held in early October, in recent years Canadians have embraced Black Friday. The day’s influence in Canada began a few years ago when the dollar was around parity and shoppers were increasingly shopping online and heading to the U.S. to get deals, Soroka says.

“The notion was you’re trying to stave off cross-border shopping,” Soroka says. “Canadian retailers were looking for a way to keep dollars in this country."

Nearly half, or 19.3 million Canadians had planned to shop on Black Friday or Cyber Monday this year, according to an IPG Mediabrands survey released last month. And 1.2 million had planned to call in sick on one of those two days in order to take advantage of the sales.

Black Friday sales online are available to shoppers anywhere in the world, this country included. And retailers much farther afield than Canada are adopting the day as well. There’s concern in New Zealand that the increasing popularity of Black Friday and Cyber Monday will cut into Boxing Day sales in that country, for example.

But increasingly in Canada, Black Friday signals to shoppers that it’s the beginning of the holiday season—and that the deals won’t be better at any of time of the year, Boxing Day included.

“Not only do you have a second day where you have these great sales,” Soroka says, "it seems that the Black Friday sales are even more spectacular, in terms of the price points."

The growth of online shopping has also affected Canadian retailers, during the holiday shopping season and year-round. Online retailers have lower overhead costs and so can offer deeper discounts, or have sales more frequently, Soroka says.

And gift cards, which are increasingly given during the holiday season, also make a day for Boxing Day less successful for retailers. People buy the cards before Christmas and spend them after Christmas, when discounts are deeper and they’re getting more merchandise for the same amount of money, Soroka says.

A silver lining

Things might be a bit easier for Canadian retailers this year. The Canadian dollar having dropped so much in relation to the greenback reduces the appeal of shopping across the border or online at American websites. A Google Canada survey released earlier this month found that online searches for Boxing Day were at an 11-year high, and had begun rising in November.

Angus Reid polling released on Monday indicates that three weeks after Black Friday and Cyber Monday, Canadians aren’t yet done their Christmas shopping — which means there might be some financial gas still left in the tank on Dec. 26.

“One would anticipate that Canadian retailers will capture more retail dollars,” Soroka says.

But the decreasing importance of Boxing Day as a shopping holiday is likely to continue, he says — even if the rise of Black Friday might not be bringing in more money for retailers. From 2006, when Black Friday first became a factor in Canadian retail, to 2014, November’s share of total annual retail sales only edged up from 8.4 per cent to 8.5 per cent, according to data from Statistics Canada. So while consumers might be benefitting from the extra opportunity to shop at a discount, Canadian retailers are not necessarily making more money as a result.

But increasingly savvy customers expect to get good deals year round, Soroka says.

“With the growing trend towards online shopping and the flash sales that we see a lot of retailers enjoying before the holidays, this is all sending a very strong message to the consumer that you could have good pricing before Christmas,” he says. “Which is, again, remarkable considering where we were 25 years ago.”