New Research Carves Up Thanksgiving Numbers
Half of American consumers think it is a bad idea for stores to be open on Thanksgiving, but the stores, and hours, keep expanding. For merchants and loyalty marketers, balancing tradition against demand requires a keen understanding of their best customers.
For merchants that operate loyalty programs, the question may not be whether to open their doors on Thanksgiving Day, but for whom.
One-third of Americans support the idea of stores being open all day on Thanksgiving, according to a survey of 1,000 consumers by LoyaltyOne. Half of those surveyed, however, think it is a bad idea. The remaining 17% cannot decide.
These findings underscore the fact that Thanksgiving shopping, even after a number of years, is still a relatively divisive concept. There is a degree of controversy in opening on what is considered a family holiday, and this requires merchants to balance tradition against demand, both of which are strong.
Achieving this balance entails a keen understanding of a retailer’s best customers.
"The sharpest retailers make their operating decisions following a thoughtful analysis of customer behavior, and holidays are no different,” said Dennis Armbruster, COLLOQUY editor-at-large. “Merchants should review the behavior of their best shoppers and use those insights to determine if it makes sense to open on Thanksgiving. It would not pay to appeal to a subset on occasional shoppers if it means upsetting a core group of loyal customers who shop all year round."
According to 2014 predictions, as well as 2013 shopping figures, a significant number of shoppers are providing the data.
26 million shoppers
The National Retail Federation expects almost 26 million people will shop on Thanksgiving Day this year, based on a recent consumer survey. This is down considerably from 2013, when 44.8 million shoppers hit the stores. Of those consumers planning to shop on Thanksgiving this year, 47% said that they will do so in a physical store between 6 p.m. Thanksgiving Day and 5 a.m. on Black Friday, according to an annual holiday shopping survey by Accenture.
Regardless of predictions, the number of stores planning to open, and their hours of operation, is expanding.
Macy’s, Target, Kohl’s and JCPenney are among the growing roster of retailers to open on Thanksgiving this year. Some are opening earlier – Old Navy is scheduled to welcome shoppers at 4 p.m. and Macy’s is dialing back its opening to 6 p.m. from 8 p.m. in 2013.
Most of these retailers have based their operating decisions on shopper activity during Thanksgiving 2013. When the Macy’s Herald Square store opened last year, more than 15,000 people were waiting, said Jim Sluzewski, senior vice president of corporate communications at Macy’s.
“What we learned is we didn’t open early enough,” Sluzewski said. “We had very large crowds just about everyplace, and what many of them told us is that (they) wished we had opened earlier.”
And because more merchants are opening earlier, many with special promotions, retailers that choose not to open risk losing sales on the holiday and possibly after, said Keith Platt, research direct at the Retail Analytics Council at Northwestern University.
“If Suzy wants to go shopping on Thanksgiving and she plans on filling out her list, and one store isn’t open and Target is, that’s where she’ll do her shopping. “That’s the reality,” said Platt, also director and research fellow at the Platt Retail Institute in Chicago.
Younger than 34
Sluzewski said many of Macy’s Thanksgiving shoppers were young, aged 13 to 30. This leads to the key question for loyalty marketers and merchants: Who are the shoppers coming out on Thanksgiving?
As Macy’s experienced, many are likely to be younger than 34, according to the LoyaltyOne survey. Almost 50% of those aged 18 to 34 said they support all-day shopping on Thanksgiving, while 16% of those aged 55 years and older are against the idea.
These findings do not surprise Britt Beemer, CEO of America’s Research Group, a consumer behavior consultancy. Last year about a third of people he surveyed sent their children out on Thanksgiving evening to make specific purchases. “But they sent them only to get the early bird special – nothing else,” he said.
This not only diminishes margins by eliminating unplanned spending, it can also skew the purchase data retailers collect. Then again, merchants are likely accustomed to such variables in behavior. Of the 44% of consumers who told Beemer they do not plan to shop on Thanksgiving Day and Black Friday, 67% added the caveat that they will look at advertisements and newspaper inserts and if they see a good deal, they will shop.
Do such offers increase the consumer’s engagement with the retailers that open on the holiday? Beemer does not think so. “You know why? They are all driven by the early bird specials,” he said.
Which is to imply that Thanksgiving is being treated as an opportunity to punch up sales early, not enhance loyalty. If so, merchants are missing an opportunity to engage new and existing shoppers through the holiday and beyond. A one-hour “pre-sale party” for loyalty members, for example, would provide members a special experience to remember with their purchases.
Some retailers are evidently using their data to promote specific items. Macy’s, for example, is offering its customers a chance to win prizes during Thanksgiving hours when they scan product QR codes with their Macy’s mobile apps. When asked if Macy’s has identified particular items that resonate with its shoppers, Sluzewski quickly ticked off a list: Rampage-branded boots, luggage, diamond stud earrings and cashmere sweaters.
As far as opening the stores on Thanksgiving, he has no doubt it will pay off.
“Thursday night into Black Friday is very much our largest shopping day of the year.”