17 Oct Macy’s and the Black Friday Conundrum
Macy’s has officially adjusted the definition of the after-Thanksgiving sale to mean right after Thanksgiving – the department store announced in a press release Tuesday that doors will open at 6 p.m. on Thanksgiving Day. This is two hours earlier than their 8 p.m. opening last year, which marked the first time Macy’s moved their Black Friday sales to open on Thanksgiving night.
They’re the first to announce such plans this year, but surely they won’t be the last; last year, Target, Sears, and Toys “R” Us all opened their doors to shoppers on Thursday night, known as the “Thanksgiving creep.”
Macy’s announcement brings the Black Friday conundrum to center stage. By promising deep discounts and so-called “doorbuster sales” for Black Friday events, Macy’s and other big-name retailers essentially turn into flash sale sites for the day.
The conundrum lies in trying to understand the strategy behind this tactic. Clearly, there is profit to be made from determined deal-hunters, and it’s proven to be a fantastic way to offload last year’s leftover inventory. However, Black Friday is supposed to mark the beginning of the holiday shopping season, not the entirety; these stores are clearly hoping for continued business from customers past November 28th. This begs the question: are such tactics really the best practices for engaging and keeping your customers?
We think not. It’s been proven time and again that deep discounts don’t equal retainable repeat-buyers. This is especially true when online shopping has become such a game-changer in the industry: according to reports by the National Retail Foundation (NRF), online purchases made up 44% of Black Friday’s total sales in 2013. Black Friday is based purely on promotion, not on brand or customer loyalty – as such, it makes for buzzy headlines but not a whole lot else.
Perhaps this explains why Black Friday sales saw a 2.7% dip last year even with earlier hours, whereas Cyber Monday sales surged to a record 21% growth. With comparably low prices and the convenience of online shopping, consumers were less compelled to visit these retailers during actual Black Friday events.
Such a trend only reinforces our emphasis on building brand loyalty over depending on promotions and discounts to attract and retain customers. Sustainable customer relationships are built through personalized engagement and emphasis on the customer’s lifecycle journey, not one-off sales that focus on price over value.
Macy’s move to kick off Black Friday sales even earlier on Thursday may very well give them an edge over other retailers for the weekend. That said, perhaps it’s time for retailers to rethink Black Friday entirely – before the after-Thanksgiving sale creeps into taking place before Thanksgiving.