Walmart Is No Turkey for Ditching Thanksgiving
(Bloomberg Opinion) -- With a single sentence in a Tuesday press release, I suspect Walmart Inc. has just killed a holiday shopping tradition that was badly in need of rethinking.
The big-box retailer, in addition to announcing $428 million in bonuses for its workers amid the Covid-19 pandemic, said it will not open its brick-and-mortar stores on Thanksgiving, which had become the de facto kickoff for in-store Black Friday discount events in recent years. The retailer said it made the move so employees could spend time with their families during this time of crisis. You can bet, though, that many of its peers will follow suit, effectively marking the end of the recent ritual of scarfing down your turkey dinner in time to get a place in line to buy a big-screen TV.
This is for the best, because the economics of starting Black Friday on Thursday are making less and less sense for retailers. The pandemic and the attending change in shopping patterns have only made this clearer.
Back when Black Friday first began creeping into Thanksgiving, the retail landscape looked far different. E-commerce was a smaller share of overall sales. Shopping on smartphones, in particular, was still a relatively novel behavior and often a frustrating experience – no small thing on a day when millions of Americans are traveling.
But online shopping has grown explosively since then. Last year, U.S. shoppers spent $4.2 billion online on Thanksgiving, according to Adobe. That’s well below the $9.4 billion that was spent on Cyber Monday, but still makes for one of the biggest online shopping days of the year. Also, to retailers’ credit, their mobile shopping experiences are vastly better, thanks to simple improvements such as responsive website design and faster page load times. That has made it much more plausible to knock out some Christmas shopping on Thanksgiving without ever leaving Grandma’s couch or putting down your slice of apple pie. In other words, even before Covid-19 accelerated the shift toward e-commerce, the incentive to hit the stores on this particular day was dwindling with each passing year.
Meanwhile, retailers must offer holiday pay to workers who come in on Thanksgiving, making the in-store sales generated that day less profitable. Now, as shoppers adhere to social-distancing guidelines that look likely to be in place for months to come, it stands to reason these Thanksgiving events will see thinner crowds, further challenging their profitability.
In recent years, there had already been a retreat from the all-night deal bonanzas that the industry had once offered starting on Thanksgiving Day in a desperate bid to gin up excitement and sales. Best Buy Co., for example, recently has been opening from 5:00 p.m. on Thanksgiving until 1:00 a.m. Friday and then closing because overnight traffic wasn’t robust enough to justify staying open. Now, retailers should go a step further and ditch Thanksgiving openings altogether.
If any given chain had done this in another year, it likely would have been perceived as a retreat, a tacit admission that it wasn’t a hot enough destination to draw foot traffic on a major shopping day. But this year, it is easy to frame the decision as being little more than an adaptation for unprecedented times.
Retailers should, in theory, be getting plenty of practice at managing the crush of Thanksgiving web orders that is likely to come if they opt to close their doors on that day. Target, for example, has said that on an average day in April, it was fulfilling more online orders than it did on Cyber Monday in 2019. By the time November rolls around, that big-box chain and many others should be able to have developed and plan and built capacity for a surge in online ordering.
Of course, closing on Thanksgiving doesn’t solve the problem for retailers of how to manage foot traffic to their stores on Black Friday, when they’ll have to figure out how to serve as many shoppers as possible while adhering to social-distancing protocols. But it still has the benefit of allowing them to get rid of a routine that is a vestige of a bygone shopping era.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.
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