Large and small retailers this year have focused on unloading excess inventory. Black Friday, when shoppers anticipate promotions, is a time to unload that inventory. But some retailers have made the choice to close on Black Friday this year — or even permanently.
Specialty outdoor retailer REI announced Oct. 4 its decision to close once again on Black Friday this year. REI will still pay its employees for Black Friday, and the merchant encourages them to spend the day outside.
“From this year on, all stores, distribution centers, activity centers, call centers and headquarters will close every Black Friday,” REI wrote in an announcement.
Holiday weekend closures can aid fulfillment process
The retailer added that although shoppers can still place orders on its website, REI.com, order processing and fulfillment will not begin until Saturday, Nov. 26.
This is a “genius” move, said Emily Pfeiffer, principal analyst at research firm Forrester Inc., as it allows REI to more strategically fulfill orders during a busy time.
“As someone who looks at order management systems and the operations of fulfilling digital commerce, literally announcing even a one-day delay in fulfillment gives a retailer the chance to programmatically assess the orders they’ve received and to route them really intelligently,” Pfeiffer says.
For instance, she says, if REI takes every order as it comes in and routes each one, it could wind up sending a truck to a remote area three different times. REI and other retailers that process orders on the same day “could wind up not consolidating” because they look at orders “in a vacuum” and just try to route each one.
“If you sit back and take 24 hours during potentially the busiest 24 hours of your online shopping season, and then route intelligently all of those orders, you have a much better opportunity to optimize,” Pfeiffer said.
Other retailers closing for Thanksgiving
Similarly, Dick’s Sporting Goods and Foot Locker Inc. are closing their distribution centers in addition to their physical stores on Thanksgiving in 2022. Although, both Dick’s Sporting Goods and Foot Locker will open on Black Friday, at 6 a.m. and 10 a.m., respectively. In both cases, like with REI, the retailers have chances to optimize online order fulfillment because of the pause, Pfeiffer says.
Both Walmart Inc. and Target Corp. had stores open on Thanksgiving in 2019, with Black Friday deals starting on Thanksgiving evening. Both retailers then closed on Thanksgiving in 2020 and 2021. This year, Walmart and Target announced their stores will be closed on Thanksgiving moving forward.
Apparel retailer Old Navy, however, is expected to open stores at 3 p.m. on Thanksgiving.
How the Black Friday experience shifts when stores close
Pfeiffer says REI announcing the Black Friday store closure creates goodwill with customers who are concerned about employees’ experiences. It also creates goodwill with the employees, and helps the retailer avoid staffing concerns.
“It gives the employees enough notice that they don’t have to wonder whether they’re going to be called in or obligated,” she says. “And the retailer doesn’t have to run the risk of booking employees and having them call out sick, or not show up, or quit the day before because they didn’t want to come in on the holidays. It lets them get out ahead on all of that.”
Plus, many consumers are shopping for the holidays before Black Friday, making the day not as “needle moving,” Pfeiffer says.
“If consumers are shopping earlier anyway, then the day is less important,” Pfeiffer says. “And it does give the retailer a chance to assess the orders that have come in.”
Closing physical stores doesn’t mean sales will move online
Physical store closures on Black Friday will impact retailers’ online sales, but not in the exact way merchants may think, Pfeiffer says. For example, with stores closed, shoppers can’t pick up their online orders in store that day.
Plus, it is a misconception that if a store is unavailable, the orders retailers are missing will automatically move online, she said. Many consumers enjoy the in-store curation that retailers put together of their products.
“There are still many consumers who are shopping (in store) for the experience of shopping. They want to browse; they want to be surprised; they want to put their hand on something,” Pfeiffer said. “That is not the experience they have online, and we know — because they tell us — it’s not the experience they want online. Consumers tell us they don’t want to be surprised or tempted when shopping online with products they’re not expressly looking for. They want digital retailers to understand what they’re looking for with purpose in that moment, and to show them those products.”
REI ranks No. 68 in the Top 1000, Digital Commerce 360’s database of the largest North American online retailers by global web sales.
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