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Friday, Mar 29, 2024

For Shoppers, Gray Thursday Is Fading to Black

Like pumpkin pie, flag football and cornbread stuffing, the uproar over retailers’ decision to open or close on Thanksgiving Day has become an American tradition. Store management must decide whether “Gray Thursday” sales are worth the hassle, or if they should take a stand against “Black Friday creep” by giving employees the holiday off. For some shopping centers, the decision is fairly simple: Find out what anchor stores are doing and follow suit. Westfield Fashion Square in Sherman Oaks had its two largest tenants in mind when it decided to open the entire mall for shoppers from 5 p.m. to midnight on Thanksgiving Day this year, an hour earlier than in 2015. “Our hours are reflective of our retailers in the center, particularly of Macy’s and Bloomingdale’s,” Colleen Sherfey, senior marketing director for the Los Angeles district at Westfield Group, said of the Thanksgiving weekend hours at Fashion Square. The decision is also in line with current market trends, she said. But this season, some retailers are breaking from the pack by shuttering stores on Thanksgiving Day – and, by publicizing their decision to do so, boosting their brand. Outdoor superstore Recreational Equipment Inc., or REI; Minnesota’s Mall of America and national mall operator CBL & Associates have all garnered praise from customers for giving employees Thanksgiving Day off. On the other hand, online activists are calling for boycotts of stores that will open on Nov. 24, including Macy’s Inc., Kohl’s Corp. and J.C. Penney Corp. Inc. While the debate continues, the demise of “shopping holidays,” or seasonal spikes in store traffic, may already be underway for brick-and-mortar retailers. Some in the industry speculate that Amazon.com Inc.’s Prime Day and the popularity of retailers offering perpetually reduced merchandise will render traditional discount days obsolete. Bob Phibbs, chief executive of consulting firm Retail Doctor, expects sales on Thanksgiving Day will be the first to go. “I think it’s a matter of time before people are not going to open up their stores on Thanksgiving,” he said. And if customers are shopping for deals throughout the year, he added, the “substance” of Black Friday is gone. While this may be welcome news for anyone who has braved 5 a.m. November chill to snag a new TV, retailers who depend on the annual doorbuster madness to meet sales goals will need to rethink their marketing strategies. Weakening weekend While the day after Thanksgiving has been considered the start of the holiday shopping season since at least the 1950s, the concept of opening stores on Thanksgiving Day did not gain traction among retailers until 2011. “The idea was to make it sound like they’re doing a service to people by opening on Thursday rather than Friday, so shoppers don’t have to get up early,” Phibbs said. Retailers also hoped that consumers’ enthusiasm for Black Friday might spill over into the day before, fueling additional hours of record sales. As it turns out, opening a day early appears to do little to boost weekend revenues. Last year, in-store sales on Gray Thursday, Black Friday and the following Saturday dropped nearly 5 percent from 2014, according to business analytics company RetailNext Inc. That hasn’t dissuaded local shopping centers from opening on Thanksgiving Day this year. Westfield Topanga and The Village in Woodland Hills will open one hour later than Fashion Square on Nov. 24, from 6 p.m. to midnight, as will the Glendale Galleria and Northridge Fashion Center. Greg Udchiz, marketing director for Westfield Topanga, The Village, and Promenade, said the decision to open The Village an hour earlier than last season was based on consumer preference. “Given the enthusiasm and appetite for early openings, Westfield welcomes the opportunity to support our retailers and customers who are eager to get a jump on Thanksgiving Day and Black Friday shopping,” he said. “A variety of factors are considered when making this decision, including market trends and local customer demand.” Independent retailers at Westfield Topanga and The Village have no obligation to open on the holiday, Udchiz noted, though he expected most of them would. “We respect the decision of individual retail partners who may choose not to open on Thanksgiving,” he said. “However, all will be expected to continue the tradition of extended holiday hours beginning on Black Friday and carrying through to the end of the season.” Loss leader strategy If shoppers want stores open on Black Friday, does that mean they’ll buy on that day? Thanks to the proliferation of year-round deals – not to mention online shopping – Phibbs isn’t so sure. From Macy’s coupons to Amazon’s warehouse section, the savings-conscious consumer has no shortage of options for discounts any time of year. And if Black Friday sales no longer offer die-hard deal shoppers the lowest prices, they see little to gain by rushing to stores, Phibbs said. “Realistically, they’re not coming out early in the morning anymore. You don’t see those stories about someone being crushed over a TV at Walmart,” he said. “That was your competitive advantage – offering the doorbusters earlier – and if people aren’t coming out for the doorbusters anyway, then what’s the point?” While there is little question that the internet has fundamentally changed holiday sales – Adobe Systems Inc. expects 2016’s “Cyber Monday,” Nov. 28, to generate $3.4 billion as the largest online shopping day on record – the theory behind the Black Friday model may have been flawed from the start, according to Phibbs. “The fundamental trend in retail is that customers are coming in and cherry-picking to find the deal, but they’re not buying anything else with it,” he said. “That doesn’t really work with the model, which was that when someone came in to get the $200 TV they’d also buy everything else.” Instead, customers are typically leaving with just the item they came in to purchase, making the loss-leader promotion a “total loss,” Phibbs said. What’s next? It’s unlikely that the Black Friday sales holiday will go extinct entirely. After all, around 74 million customers shopped on that day last year, according to the National Retail Federation. While that’s about 15 percent fewer than the 87 million who turned out in 2014, it’s still a lucrative figure – especially for department stores, which have been hit particularly hard by retail’s shift to e-commerce. Thanksgiving sales are a different matter, according to Phibbs. “There’s a lot of pushback, (with customers valuing) the quality of life over having the malls open on the holiday,” he said. For example, REI has decided to close on both Gray Thursday and Black Friday for the second year in a row. The company has stores at the Westfield Topanga and the Devonshire Reseda Shopping Center in Northridge. As an independent retailer, REI can offer little in terms of deep discounts anyway, so the company won’t miss much by foregoing the Thanksgiving weekend. But by drawing attention to its employee-first policies, REI has positioned itself for success during the holiday season and beyond. REI’s “#OptOutdoors” campaign, which encourages consumers to spend time with loved ones rather than shop on Thanksgiving weekend, is a strategy more retailers should consider, he suggested. For stores that can’t afford to miss out on potential sales from Thanksgiving shoppers, the best approach might be somewhere in between. Retailers at both the Glendale Galleria and Northridge Fashion Center will be complementing Thanksgiving and Black Friday sales with holiday activities for customers and their families, according to Brooke Whitebread, director of marketing services for centers owned by General Growth Properties.

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