Shopping Centers Today International

JAN 2016

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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Outdoors retailer REI paid all 12,000 associates at its 143 stores, its headquarters and its warehouses, to take not only Thanksgiving Day off, but Black Friday as well. Nordstrom posted its sentiments at conspicuous places in the stores: "We won't be decking our halls until Friday, November 27. Why? Well, we just like the idea of celebrating one holiday at a time. From our family to yours, Happy Thanksgiving." (See list of stores closed this past Thanksgiving.) The "Boycott Black Thursday" Facebook page had an- other go-round this year with upwards of 142,000 likes. On- line petitions sprung up too, including one on Change.org titled "Do Not Open Deptford [New Jersey] Mall on Thanks- giving Day," which drew some 3,000 signatures. The mall did open on Thanksgiving Day, thankfully, without inci- dent. A New Jersey state senator says, however, that he plans to introduce legislation this year to bar retailers from open- ing before 9 p.m. on Thanksgiving Day. Some industry professionals complain that retailers are sacri- ficing margins with aggressive Black Friday promotions, but oth- ers disagree. "Gross-profit margins for retailers are actually highest during the holiday season," said an LPL Financial report. Retail- ers tend to negotiate with suppliers for special seasonal prices to hit margins, with such pricing actually luring in purchasers of higher-margin items, according to LPL. The early-November sales give retailers a heads-up on which products are in great demand, allowing them time to adjust strategies for the big December shopping days, accord- ing to Jun Li, an assistant professor of technology and opera- tions at the University of Michigan. The longer season also spreads out logistics requirements, she said, "which becomes increasingly important as consumers get more demand- ing." The expansion of pre–Black Friday promotions is also boosting consumer expectations, according to Birdie. "Once shoppers get used to huge discounts, any pullback from sale prices is the death knell," Birdie said. Though sales are designed to spur peripheral spending, one pie can be sliced but so many ways. A preholiday survey by Plainfield, N.J.–based Levin Management, which leases and manages 13 million square feet of space, supports the idea that the expanded season simply dilutes sales performance on Black Friday, according to Matthew Harding, the company's presi- dent. About 36 percent of respondents said they thought sales would peak before or through Black Friday week, and 45 per- cent said they expected peak sales between mid-December and the weekend before Christmas, according to Harding. "This all points to the likelihood of a continued reduced buying surge on Thanksgiving and Black Friday," he said. Black Friday remains the day on which most spend the bulk of their shopping money, however, followed by Thanksgiv- ing Day, according to BestBlackFriday's Jones. "And it's also important to note that not only is there a trend of big sales be- ing spread out before Black Friday, they're being spread out after Black Friday as well," Jones said. Though the name Black Friday is often identified with a pe- riod in which retailers emerge from the red into the black, oth- ers hold that the term was coined by stressed-out Philadelphia police officers in the 1960s, for the sea of traffic and humanity that converged on the city that day — including Christmas shop- pers, commuters, additional commercial traffic and attendees of the annual Army-Navy football game. The encroachment of Black Friday into Thanksgiving ac- celerated after 2009, when Walmart opened that day to help diffuse the Black Friday crowds, following the death of an employee in a stampede at a New York store the year before. In the ensuing years, department stores and big-box retailers moved the start of their Black Friday sales from early on Friday to midnight just after Thanksgiving. By 2013, many retailers had crossed into Thanksgiving night with 8 p.m. openings be- fore moving those back to 6 p.m. in 2014 and to even earlier in 2015. Old Navy opened at 4 p.m. on Thanksgiving Day 2015. The trend is unlikely to reverse, according to Jones. A fall 2015 survey by BestBlackFriday.com showed that 68 percent of the respondents were set to begin Christmas shopping be- fore Thanksgiving, he says. Some countries might do well to tweak the dates of their big- gest price-off promotions, Bamfield says. "Many commentators feel that the U.K. Black Friday falls too early in the Christmas season and diverts too much trade from December," he said. "If you are going to have a sales period during Christmas, it would be better to do this in mid-December." In the U.S., the usual pre–Black Friday 2015 sale com- prised fairly narrow product assortments, though this year's increased frequency "tended to reel shoppers into making multiple purchases that added up to be a greater spend than one giant sale would," Jones said. "Retailers are really looking to squeeze every penny out of shoppers to maximize profits, and one way to do that is to offer more steep-discount days through the holiday shopping months." SCT J a n u a r y 2 0 1 6 / S C T 47 "Retailers are really looking to squeeze every penny out of shoppers to maximize profits, and one way to do that is to offer more steep-discount days through the holiday shopping months."

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