NEW YORK – Target joins Walmart in closing its stores on Thanksgiving Day, ending a decade-long tradition of boosting door opener sales on Black Friday.
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.
Stores have always relied on large holiday crowds and work with manufacturers up to a year in advance to secure exclusive items. Now the virus has turned the Christmas shopping model on its head. Shops have cut orders and the crowds are an horror. With fears of a wave of virus cases in the fall, the biggest nightmare would be for retailers to close again during the most critical time of the year, analysts said.
“In the past, bargain hunting and Christmas shopping can mean crowded events, and this is not a crowded year,” Minneapolis-based Target said on a corporate blog. It said its vacation deals would be coming sooner than ever – starting in October.
Walmart, the country’s largest retailer, announced its move last week.
First opened on Thanksgiving in 2011, Target, along with other stores, kicked off Black Friday sales a day early, creating a new tradition for shoppers to go 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 ended on Black Friday and many critics berated the stores for failing to honor the holiday and allowing their workers to spend it with family. In response to the backlash and poor sales too, some stores and malls such as the Mall of America in Bloomington, Minnesota, have reversed in recent years and haven’t opened on Thanksgiving. Costco and Nordstrom have stayed closed on Thanksgiving, among other things, and have indicated that they want to respect the holiday.
The bigger question still arises of 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 best or the second day of sales of the year.
Thanksgiving isn’t even in the top 10 as sales start around 5pm. However, according to Adobe Analytics, which tracks the online sales of 80 of the top 100 retailers, the day ranked third in online shopping last year behind Cyber Monday and Cyber Monday.
Walmart and Target declined to comment on their plans for Black Friday, but analysts believe 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 add to the crowd.
Jeff Gennette, CEO of Macy, said earlier this month that the department store will be moving its Black Friday business more online and will likely go “at full speed” right after Halloween with Christmas marketing. It will also be breathtaking events to reduce customer traffic in the store.
Still, it will likely be more expensive for retailers to continue selling online due to shipping costs. And while many stores like Macy’s will be ramping up roadside pickup for the first time this holiday season, that strategy will present logistical challenges to meet shoppers’ vacation 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 profits they make on buying the same item in-store.
“This is going to be a very difficult Christmas season in terms of revenue origins,” said Joel Rampoldt, director of the retail practice at AlixPartners.