Retailers are going into hyper-drive to attract shoppers with the approach of Black Friday, the day after Thanksgiving that officially kicks off the holiday shopping season.
Unlike previous years, retailers are no longer tripping over one another to announce earlier-than-ever opening times on Turkey Day as they race to win shoppers away from rivals. Instead, merchants are heavily promoting discounts well before the turkey is carved.
For retailers, the last few months of the year are crucial, with some raking in 40 percent of their annual revenue during this time.
Anxiety in the retail industry has grown recently after some companies warned of surprisingly low consumer demand.
Macy’s and Nordstrom said this month that slow traffic led to disappointing third-quarter financial results and higher inventory levels.
Retail sales in October edged up only slightly after two flat months, according to the Commerce Department. Even months of gasoline savings have failed to spur spending, with many consumers choosing to bank those dollars or pay down debt.
The National Retail Federation, a trade group, forecasts that sales during November and December will climb 3.7 percent to $630.5 billion, slightly below the 4.1 percent growth of last year. Consumer spending accounts for more than two-thirds of economic activity, making retail sales a strong gauge of the nation’s economic health.
Shoppers will spend $1,463 on average during the holiday season, up from about $1,300 a year earlier, according to a survey by Deloitte &Touche. But most of that uptick isn’t going toward buying gifts but into other categories such as furniture and entertainment, the survey found.
“Spending will be a bit up from last year but not any great improvement over last year,” said Jackie Fernandez, a retail partner at Deloitte &Touche. “It’s probably going to be a pretty good holiday.”
Overall, analysts agree with that assessment of a decent – though not blockbuster – season for retailers.
Even that kind of showing during the holidays could be crushed if terrorists strike again after recent attacks in Paris and Mali. Poor economic news could also dampen shoppers’ enthusiasm.
Retailers started opening on Thanksgiving a few years ago, when companies worried about frugal shoppers nudged their Black Friday hours forward – and forward again in subsequent years.
But this year, some companies are bucking the trend and proudly advertising their resistance.
Recreational Equipment Inc., the outdoor gear company best known as REI, made a splash last month when it said its headquarters, distribution centers and all 143 stores will close not only on Thanksgiving, but on the day after. Fast-fashion retailer H&M will close its U.S. stores on Thanksgiving for the first time.
And department store chain Nordstrom, which has never opened on Thanksgiving, has been heavily promoting its restraint.
The backlash makes good branding sense for some companies, especially among retailers catering to wealthier shoppers or selling products in categories that don’t attract the deal hunters, analysts said.
“The retailers choosing to stay closed on Thanksgiving are now actively advertising the fact they are staying closed,” said Kevin Paul Scott, co-founder of ADDO Worldwide, a brand consulting firm. “They are communicating their values in the hopes of building brand affinity, and it’s not-so-subtle competitor shaming for the businesses that are choosing to stay open.”
That doesn’t mean merchants have given up on Thanksgiving. Many are sticking to the same Thursday openings as last year. Toys R Us said it will welcome customers starting at 5 p.m. that night, followed by Kohl’s at 6 p.m. and Kmart at 7 p.m.
Many companies are rolling out deals aggressively throughout November and December, and shoppers know that they can expect deep discounts in the days leading up to Christmas, analysts said.
“Black Friday isn’t what it used to be,” said Barbara Kahn, director of University of Pennsylvania’s Jay H. Baker Retailing Center. “It’s not concentrated in a few days anymore. The idea of shopping online has introduced this notion of 24/7, any time you feel like it.”
Last year, Black Friday weekend sales fell 11 percent and shopper traffic was down 5.2 percent from a year earlier, according to the National Retail Federation.
Macy’s Inc. Chief Executive Terry Lundgren set the tone for a cut-rate Christmas when he warned analysts nearly two weeks ago that the department store chain planned significant markdowns, particularly of apparel, to clear out old goods by the end of the year.
“That will be good for consumers, but it will obviously put pressure on our own margins in the fourth quarter,” Lundgren said.
For the first time, Wal-Mart Stores Inc. said it will make the majority of its Black Friday deals available online starting at 12:01 a.m. Thursday. Target rolled out “10 Days of Deals” beginning Sunday and a Black Friday presale Wednesday.
“We are looking for ways to offer guests deep discounts across a longer period of time,” Target spokeswoman Amy Joiner said. “It’s all about offering people options.”
That has become more important to bricks-and-mortar retailers, which are fighting to woo shoppers increasingly opting to avoid elbow-to-elbow crowds and order online. Nearly 50 percent of shoppers plan to shop for gifts online, compared with 44 percent in 2011, the Deloitte survey said.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
