Black Friday has for many retailers become Grey Thursday as the traditional start to the holiday shopping season has moved from the day after Thanksgiving to late afternoon or early evening on the holiday itself.
That's an unfortunate thing for those who liked spending a day off with family, basking in the afterglow of a big meal, watching football, and resting up for the busy times ahead. It's also unfortunate for the retail employees who would rather not work that day, but like it or not, most large retailers have to open on Thanksgiving as long as their competitors do.
Each day is an opportunity. Retailers like REI are closing on Thanksgiving because of some misguided PR attempt that will ultimately be useless. Shoppers aren't going to shop there on Friday because it was closed on Thanksgiving. Shoppers don't think that way. They shop at places that are open.
It is a changing market
While not being open on Thanksgiving Day will cost a retailer sales that it won't gain back, the overall season is spreading out, with sales beginning in early November and more shopping moving online. Jayne Heggen, President of Heggen Group LLC, told The Motley Fool via email that she believes having an open website is enough for many retailers.
Brick-and-mortar sales on Thanksgiving Day dropped to $1.8 billion from just over $2 billion in 2014, she noted, adding that Black Friday sales suffered a similar dip. She blamed that partly on sales moving online and partly on stores offering discounts right after Halloween, blunting the effect of the Thanksgiving Day holiday shopping.
"No Brick and Mortar Retailers needs to be open on Thanksgiving," she wrote. "The economics simply don't justify it when there are so many more civilized online shopping opportunities available for those who feel they must shop on Thanksgiving Day."
Dan Rajaratnam, a clinical professor of marketing at University of Texas Dallas takes more of a middle ground. He cited a recent study by bestblackfriday.com, which showed that only 17.6% of Americans favor stores being open on Thanksgiving, while 54.69% want them to stay closed. But, he wrote, as long as some chains open, he believes it benefits a retailer to follow the trend.
"My suggestion is that retailers should open for a few hours in the evening of Thanksgiving Day, or better still, open at midnight on Thursday or the early hours of Black Friday to get a piece of the pie," he wrote. "Staying closed will only transfer sales to competitors."
The problem for big retailers is that as long as Wal-Mart (NYSE:WMT), Target (NYSE:TGT), Best Buy (NYSE:BBY), and other big retailers open, choosing not to follow suit will cost you money. Shoppers have a holiday budget, limited loyalty, and if some retailers are open on Thanksgiving, they will shop there.
This trend is not going away
Even with the season stretching out and more sales moving online, the American consumer has shown a willingness to line up outside of Wal-Mart, Target, Best Buy, and other chains before they have finished cleaning up from their Thanksgiving meals. That means there will be shoppers spending money, and any chain that chooses to close has almost certainly done so at the cost of sales it will never see back.
As long as Americans keep creating demand on Thanksgiving, stores have to open. Not doing so may be a nice idealistic stand -- and it might work for a specialty retailer like REI -- but for broad-merchandise retailers, staying closed is putting ideals ahead of dollars. That's ultimately a disservice to shareholders and employees, even if not opening on Thanksgiving seems like the right choice.