NEW YORK – Target is closing its stores with Walmart on Thanksgiving Day, ending a decade-long tradition of selling Black Friday door openers.
The move, announced on Monday, comes as stores rethink this year’s Black Friday shopping bonanza weekend – along with other major retail days during the holiday season – as the country battles the coronavirus pandemic.
The stores always relied on large holiday crowds and worked with manufacturers to secure exclusive items up to a year in advance. Now the virus has turned the vacation shopping model on its head. The stores have cut the orders and the crowd is an abomination. Given fears of a wave of virus cases in the fall, the biggest nightmare would be if retailers had to resume business during the most critical time of the year, analysts said.
“Historically, deal chasing and vacation shopping can mean crowded events, and this isn’t a crowded year,” Minneapolis-based Target said on a corporate blog. It said its vacation deals would come sooner than ever – starting in October.
Walmart, the country’s largest retailer, announced its move last week.
Target first opened on Thanksgiving in 2011. Black Friday sales began a day earlier along with other stores, creating a new tradition of shoppers going to stores after their turkey festival. Many retailers did this because they were trying to better compete with Amazon and other online players.
But sales spun into Black Friday and many critics lambasted stores for not observing the holiday and allowing their workers to spend it with their families. In response to the backlash and poor sales, some stores and malls like Bloomington, Mall of America, Minnesota, have reversed course and don’t have to open on Thanksgiving for the past few years. Costco and Nordstrom were always closed on Thanksgiving and wanted to respect the holiday.
The bigger question still remains, how to deal with Black Friday itself, which also attracts large crowds – and sales. Despite the competition from Thanksgiving shopping, Black Friday is either the top or the second biggest sales day of the year.
Thanksgiving isn’t even in the top 10 as sales start around 5:00 p.m. According to Adobe Analytics, which tracks the online sales of 80 of the top 100 retailers, the day ranked third in online shopping after Cyber Monday and Black Friday last year.
Walmart and Target declined to comment on their plans for Black Friday, but analysts believe that retailers will move their business more online and focus on limiting the number of shoppers in stores. Like Target, other retailers are likely to start their Christmas sales even earlier to increase the crowd.
Jeff Gennette, CEO of Macy, said earlier this month that the department store will be turning its Black Friday business more online and likely to “go full steam” with holiday marketing right after Halloween. There will also be mind-boggling events designed to reduce customer traffic in the store.
Still, it will likely be more expensive for retailers to continue driving online sales due to shipping costs. And while many stores like Macy’s will be speeding up roadside collection for the first time this holiday season, that strategy will create logistical challenges to meet customers’ holiday needs.
Sucharita Kodali, an e-commerce analyst at Forrester Research Inc., said the profit margins retailers make on their online sales are between 50% and 80% of the profit they make from buying the same item in-store becomes.
“This is going to be a very difficult Christmas season when it comes to where the sales are coming from,” said Joel Rampoldt, executive director of the retail practice at AlixPartners.