With the announcement that it would open its doors at 6 p.m. Thanksgiving Day—just hours after its famous parade—Macy’s set the bar for retailers to start their “Black Friday” events, well, the Thursday before.
That leaves little time for Thanksgiving dinner, and opening up retail doors on such a traditionally quiet day has garnered much controversy in the past. Some retailers last year actually made a point of not being open on Thanksgiving.
But Macy’s move will likely lead other retailers to open on Thursday, if they hadn't already planned to, and maybe earlier in the day than last year.
“It's a smart strategic move by Macy's,” retail analyst Burt Flickinger, of Strategic Resource Group, told the Pittsburgh Tribune-Review. “Given that consumer income for the average family has declined, adjusting for inflation, over the last seven years, retailers know that consumers are more cash-constrained.”
Indeed, nearly half of consumers have already begun their holiday shopping, and they're looking for deals.
Tight household budgets
Despite strengthening fundamentals in the economy, many American households are feeling the need to spend less and save more, according to a report released in October by Bankrate.com. Two-thirds of 1,007 consumers surveyed said they’re limiting their spending each month, according to the study, with 32% of those saying that’s due to poor income growth and 29% saying they must save. The reason? Lower-income and middle income consumers aren’t seeing wages rising even in the face of increasing expenses, according to experts.
U.S. consumers also acquired their biggest surge in credit card debt in six years, according to a study released in September by CardHub.com. That will likely help translate to further discount pressures from consumers similar to last year, when bargain-hunting at the holidays cut into retail margins.
Although research has retailers seeing great benefit to starting Black Friday sales early, some experts don’t believe the hype. In fact, there’s evidence that making sales on Thursday simply takes away from Black Friday sales.
Still, many retailers are feeling the need to start as early as possible to capture those limited dollars before consumers close their wallets for the season.
Shopping starts early
Whether or not a retailer is open on Thanksgiving, studies show that many shoppers begin their holiday shopping even earlier, well before Halloween. Some 46% start in October, according to a study by coupon site RetailMeNot. Indeed, many sales begin in early November, well before Black Friday.
Last year, retail sales in physical stores on both Thanksgiving and Black Friday increased 2.3% from 2012, to $12.3 billion, according to brick-and-mortar retail analytics firm ShopperTrak. Evidence that Thanksgiving sales cut into Black Friday is seen in ShopperTrak’s finding that actual Black Friday sales decreased 13.2%.
Cyber Monday sales, which include online sales on Black Friday, however, last year rose 20% in 2013 from the year before. Still, brick-and-mortar stores account for some 90% of holiday shopping, according to ShopperTrak.
"Retailers stretched Black Friday deals and promotions across November — removing the focus from just one big day of shopping," ShopperTrak founder Bill Martin told NBC News.
All about discounts
The main reason Black Friday exists as a big deal for holiday shopping is that most people have the day off, and Christmas, once the turkey’s done, seems just around the corner. Indeed, sometimes Hanukah starts almost immediately.
One thing that seems clear: Consumers want deals, and they’ll shop on Black Friday weekend if they think they can get them.
Consumers, however, are also becoming increasingly savvy about what "deals" really means. Many are more aware of price-matching guarantees, and some will return an item bought before Black Friday in exchange for the lower price, if there is one. Consumers can use apps and other research to ensure that the “doorbuster” deal they’ve stayed up for is all that.
"The consumer today is just fanatical about saving money," Britt Beemer, chairman of consumer behavior and retail strategy firm America's Research Group told USA Today. "I think you're going to see more retailers jump into the sale strategy. I think they're going to be more aggressive and you may see bigger discounts earlier."