This Thanksgiving holiday brought with it a little more than just turkey, stuffing, and a serving of pumpkin pie. It also brought a mild bout of controversy. The decision by some retailers to open their doors before what is traditionally considered the start of Black Friday caused a bit of a national stir by some folks that believe Thursday should be sacred and kept to families crowding around their tables and their TVs for a feast and some NFL football. In hindsight it's hard to justify opening early when early retail results show customers only moved up their purchases by half a day and did not continue to buy throughout the holiday weekend. At least part of the rationale by these retailers for opening early is the late date of Thanksgiving and the loss of six shopping days this holiday season. It's unclear whether these "lost" days can be recovered this year or if they would make a difference any how.
The Race to Open Earlier
Walmart and Macy's are two of the more prominent retailers to open earlier on Thanksgiving and jump the traditional start of Black Friday door busting sales. To listen to some of the interviews by the CEOs of each of the retailers in their explanations for opening on Thanksgiving a tone of defensiveness could be detected. The CEO of Macy's, Terry Lundgren, indicated that his company was in the service industry and that his customers wanted the store open on Thanksgiving. In defending his company after reports of violence at some Walmart stores, U.S. CEO Bill Simon explained that out of the millions of shoppers hitting the stores during Black Friday, some incidents should be expected, and that not all of Walmart's customers are nice people. The spin is that this is the trend and it's what the customer wants. But who are these customers that are demanding that these stores change their hours to accommodate their shopping needs? And is Walmart competing with Macy's and vice versa? And is Walmart so egregious when Kmart opens at 6 A.M. on Thanksgiving?
Moving Sales Forward?
Empirical evidence seems to indicate that sales made on Thanksgiving may only have been brought forward from the traditional start of shopping on Black Friday. People interviewed outside of shopping malls over the weekend seemed to think foot traffic was no different than any other weekend. If this is true, do retailers really benefit from opening early? Do sales made on Thursday beat sales made on Friday? Some folks actually think they might. Based on Master Card Advisors' data and the finite amount of funds consumers allocate to shopping for the holiday season, getting first crack at those shopping dollars is critical to retailers. Studies seem to indicate that consumers will spend most of their holiday budget at the first two stores they patronize. This would seem to illustrate the importance of getting to customers before your competition.
Bad Publicity?
But does getting first crack at customers justify the bad publicity that some of these retailers received in the media over the holiday? In the case of Walmart, bad publicity seems to be a way of life. Between gender bias suits, near poverty level wages, and just plain poor public relations gaffes, such as having employees receive food donations from customers over the holidays, it seems no publicity is bad enough publicity for the retail giant. Based on the lines outside of Macy's flagship store in New York on Thursday, publicity seems to be anything but bad for this middle tier retailer.
Online Competition: Cyber Monday
As more and more consumers have access to electronic tablets, such as iPads and the sort, and become more comfortable shopping online, are brick and mortar retailers under more pressure to offer something the online retailers such as Amazon and eBay cannot? Does the retailer need to stress the shopping "experience" of being out with the kids and the family to compete with the online behemoths? As more consumers transact online, traditional retailers will need to fight back with their own online stores as a convenience and offer their stores as sites to pick up merchandise. Although the data in many cases is "top secret", it is widely believed that online sales still only make up a small portion of total retail sales. The combination of providing an online store and presence along with their brick and mortar stores seems to give the traditional retailers the advantage, for now.
What's It All Mean?
The world and the U.S. is undergoing a seminal change in how shopping and consumerism is transacted. If 70% of our economy is made up by consumer spending than the importance of this sea change cannot be underestimated. The rise of Apple's mobile devices such as the iPad are one big example of what is facilitating this evolution in consumer habits. As our habits change it is not surprising that big retailers feel the need to evolve as well. With regards to the traditional holiday season that means breaking down old boundaries once thought sacrosanct. There is no going back once we've moved forward. The irony of this consumer evolution: Will Black Friday and even Cyber Monday go the way of the dinosaurs?
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