OP #278: I'm The Grinch of BFCM

Author

Darren Herman
December 04, 2024

Happy Wednesday,

I hope you had a wonderful start to the holiday season last week.  Sherri and I took the kids to Grenada (pronounced: grə-NAY-də), an island we’ve never explored before and had a great time. I was blown away by the topography of the island: it felt like we were in Jurassic Park. The food on the island was delicious as it was rich with spices (cocoa and nutmeg are their primary) and the people were all incredibly kind. If you are a history buff, in 1983, the US invaded Grenada which you can read more about here.

Lets start right into the normal flow of the Operating Partner.. Starting with a few things that stood out to me this week.

🥓 Hey NYCers, Fred Wilson inspired a new restaurant around Union Square: Leon’s. Fred’s post reminds me of my time in Manhattan where I had my stable of meal spots. Breakfast spots: Trump Soho, Pershing Square Cafe, and 12 Chairs. My lunch spots: Aqua Grill and Sarabeths, and drinks-before-train at Cipriani’s in Grand Central. If you know me from my time in New York, you are probably smiling because we met at one of the above places.

📈 Black Friday Cyber Monday are big moments for consumer brands here in the United States. This year, online sales have been up 4-7% depending on whose numbers you listen to, but in-store foot traffic is down 3.2% YoY.  We’ll discuss more about BFCM below.

🍔 I like this piece on In-N-Out, which turned a simple $4 burger into a cult favorite. Believe it or not, it now brings in $2B a year. I am a fan of In-N-Out and often like taking the family to grab a double double when in California. Is it the best ever? Probably not, but the brand is iconic and it’s a fun spot to hit up. Fun story: one late night in Las Vegas, my wife Sherri wanted In-N-Out, so we Ubered over after a night out and was dropped off, to find ourselves amidst a gang battle. We got back into that Uber as fast as we could and headed to the strip.

💡 Benedict Evans released his new presentation, AI Eats the World. This is a nod to Marc Andreesen’s 2011 presentation, Why Software Is Eating the World. I’m particularly interested in AI as it has clear use cases in areas I cover around Growth.  If you work in marketing, customer experience, sales, customer service, or software, you should read this presentation.

Some more reading to get us started:

I think I just wrote my first opening without mention of the NY Knicks… wow.

Darren

Why I’m the Grinch of Black Friday Cyber Monday

It’s the most wonderful time of the year—or is it? For businesses, Black Friday and Cyber Monday (BFCM) are often portrayed as golden opportunities to drive revenue, acquire customers, and make a splash in the holiday shopping frenzy. But peel back the shiny marketing veneer, and you’ll find a different story. For many brands, BFCM is less a gift and more a grinch-worthy trap that erodes margins, strains operations, and chips away at long-term brand equity.

Here’s why I’m the Grinch when it comes to BFCM.

The Discount Dilemma

At its core, Black Friday Cyber Monday is a race to the bottom. Competing effectively means offering deep discounts that slice into already thin margins. In 2024, U.S. online sales on Black Friday reached $10.8 billion, a 10.2% increase from the previous year. Cyber Monday was projected to hit $13.2 billion, up 6.1% from 2023. While these figures showcase impressive top-line growth, they often come at the expense of profitability. For smaller brands, this discounting cycle can feel like a no-win scenario. Either they play the game and sacrifice margin, or they opt out and risk losing relevance in the eyes of deal-hungry consumers.

For premium and luxury brands, the problem is even worse. Discounting devalues the perception of exclusivity and quality. It has the potential of training customers to wait for sales rather than purchasing at full price, undermining the brand's long-term pricing power.

Operational Chaos

The operational strain of BFCM is another hidden cost. Warehouses and fulfillment teams are stretched to their limits, and shipping carriers are overwhelmed. In 2024, physical store traffic declined by 3.2% on Black Friday, indicating a shift towards online shopping. While large-scale retailers may have the infrastructure to handle these spikes, smaller businesses often end up overpromising and under delivering. Late shipments and stockouts can tarnish a brand’s reputation, leading to unhappy customers and increased support costs. If participating on Amazon, stockouts can lead to the loss of the buy box.

And let’s not forget the ripple effect: supply chains stretched thin, returns flooding in after the holidays, and a demoralized workforce just as the crucial year-end wrap-up begins.

A Band-Aid, Not a Strategy

For brands that lean heavily on BFCM, it’s worth asking: what’s the end game? A single weekend of promotions doesn’t make a sustainable business strategy. Relying on aggressive discounting to hit revenue goals creates a feast-or-famine cycle that’s difficult to break. Worse, the reliance on short-term tactics often distracts from building long-term levers like loyalty, customer experience, or differentiated product offerings.

A Marketing Mess

Ever tried to get someone’s attention in a loud room? It’s not easy. In and around the holiday season, inclusive of BFCM, media (ad) markets are at a yearly high. The ad you are buying on any given day during the holiday season is priced higher than any other time of the year (with exceptions). So, what does everyone do? Send email.  How many of those emails actually reach your inbox? If you are like me, they mostly all go to the Promotions tab of Gmail. And I definitely do not want the SMS messages that sometimes accompany. 

So, What’s the Alternative?

The brands that win during BFCM—or avoid its pitfalls altogether—are the ones that stay true to their values and focus on playing the long game. Some create limited-edition products or bundles instead of discounts. Others focus on experiential perks, like VIP access or charitable giving tied to purchases. And some brands have taken a stand by opting out of BFCM entirely, choosing instead to champion sustainability or slow fashion.

The goal should be to prioritize the health of your business over participation in the noise. If a marketing tactic doesn’t align with your margins, your customer experience, or your brand values, it’s worth asking: why are we doing this?

Embracing My Inner Grinch

Don’t get me wrong—I understand the appeal of BFCM. The sales spikes, the customer acquisition, the energy—it’s seductive. But as the Grinch of Black Friday Cyber Monday, I can’t ignore the downsides. For many brands, the glitter fades quickly, leaving behind eroded margins, stressed teams, and diminished brand equity.

This season, my advice to businesses is simple: focus on strategies that sustain your brand’s health, not just its weekend sales chart. Sometimes, stealing away from BFCM is the best gift you can give yourself.

To wrap this all up, Shopify released some interesting stats around BFCM and thought I’d share some highlights below:

📈 $11.5 billion in global sales from merchants, an 24% increase in sales from 2023

🎉 76+ million consumers worldwide bought from Shopify-powered brands

1️⃣ 16,500+ entrepreneurs made their first sale on Shopify

💰 More than 67,000 merchants had their highest-selling day ever on Shopify

🛍️ Hottest product categories: Clothing Tops, Cosmetics, Fitness & Nutrition, Pants, Activewear

🛒 Average cart price: $108.56 ($109.70 on a constant currency basis)

🌎 Top selling countries: US, UK, Australia, Canada, Germany

🏙️ Top selling cities: Los Angeles, New York, London, San Francisco, Miami

🕜 Peak sales per minute: 12:01 PM EST on Black Friday

🚚 Cross-border orders represented 16% of all global orders

💳 58% year-over-year increase in sales made via Shop Pay

📦 91M+ packages globally were tracked on the Shop App

Adobe also has their Holiday Shopping Report. Looking at their Conversion Rate by Desktop vs. Mobile reports are interesting.

Giving Wednesday (a day late…)

I’ll keep this short and simple.

A huge shoutout to those who donated to Team Daya and Tremont School after OP #277.

The two non-profits I’d love to call attention to for the OP Community in 2024 are Team Day and Tremont School. Both organizations are in the education impact space. This is an area that is near and dear to me.

If you have a spare $5 or $10, it’d be make a huge difference.

Jobs

As many of you know, I work at Bain Capital, an investment firm with a range of funds at all life stages of a company.

If you are interested in looking at publicly posted roles at our portfolio companies, below is where to begin.

Bain Capital Ventures (BCV): https://jobs.baincapitalventures.com/jobs

Example Roles:

Bain Capital Tech Opportunities (Tech Opps): https://jobs.baincapitaltechopportunities.com/jobs

Example Roles:

Example Roles:

Example Roles:

And if interested, here are some open roles at Bain Capital.

Below are a few articles I came across this past week that I found interesting. While I may not agree with everything in each one, I think they're worth a read. If you stumble upon an article you think I or the Operating Partner community would enjoy, feel free to share it with me. Of course, I reserve the right to decide what gets featured in the OP.

Thank you very much for reading. Please always reach out with any questions, feedback, or comments. Or just to say hi.

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