November 22, 2016
Let’s begin with a little history. The term Black Friday has nothing to do with the day retail stores move into the black, meaning they start earning profits.
Bonnie Taylor-Blake, a neuroscience researcher at UNC-Chapel Hill and an amateur etymologist, found the original reference to the term Black Friday. According to her research, it first appeared in a 1951 issue of Factory Management and Maintenance referring to the high absenteeism rates on the day after Thanksgiving, not the retail phenomenon. And the term as we know it today, which references the rush of shoppers to retail establishments to kick off the holiday season, was coined right here in Philadelphia.
Taylor-Blake found two references, one in 1959 and another in 1961. In both, they referred to Black Friday as the day after Thanksgiving, when crowds of people flocked to stores to find the best deals. The Philadelphia Police used the term to refer to the “irksome” traffic jams that resulted in the city from all of the additional traffic. A public relations firm wanted to change the term to Big Friday and Big Saturday to remove the negative connotation and draw people to Philadelphia to shop and see the beautifully decorated city streets and windows. Although merchants and the PR firm tried to change the term from Black Friday to Big Friday, it never stuck. Instead, “Black Friday” began to catch on, and by the mid-to-late 1980s, the term was used across the country to refer to the big crowds who turned out for the biggest deals of the holiday season.
It used to be traditional for the stores to open at 6 a.m. on Black Friday, but in the 2000s, stores began to open at 5 a.m., then at 4 a.m., and then even earlier. Now, stores such as Best Buy, Macy’s, Kmart, Michael’s, Sears, Target, and Toys-R-Us (to name a few) open as early as 5 p.m. on Thanksgiving. Is this a retail stroke of genius? Do these companies make gobs of extra money by being open for five or six hours on Thanksgiving?
Well, the financial results are mixed. Some stores, such as Macy’s, turn a healthy profit, but others do not. In a Nov. 16 article in The New York Times, Joel Arden, a partner in the retail practice of consulting firm A.T. Kearney, said, “There’s a number of things that can make it challenging to have two huge days, one right after the other. You can’t move inventory to the store when you have that much traffic in it.” While the bottom line is obviously important, losing customers will, over time, impacts that bottom line. Alden adds, “If you do a lousy job over the Thanksgiving period, it may be a while before those customers come back and visit you again.”
There is a growing list of stores that have committed to not opening on Thanksgiving. TJMaxx has been running beautifully executed “mini movie” commercials touting their decision, arguing that they value their customers and their employees and feel it is important to honor that family time. HHGregg Chief Executive Bob Riesbeck said in an announcement about it’s decision to close on Thanksgiving, “It’s important to us that our associates are able to be home with their families on Thanksgiving, and we are encouraging our customers to do the same – knowing great deals will be available online, on Black Friday, and through the weekend.”
One store, REI, is so committed to their non-opening stance on Thanksgiving that they are closed for Black Friday as well. According to an October 24, 2016 article in Fortune, not only will REI be closed on Black Friday, they will not process online orders, and they will pay all of their 12,287 employees for the day. They’re prompting people to instead spend time outside, which has sparked the hashtag #OptOutside. In the same article, REI reported a double digit gain last year, despite being closed, and the company is on target for a 6–7% gain this year, as well.
I think it is safe to say that the majority of stores, if they offer good promotions, will benefit from being open on Black Friday. Will they benefit more by opening at 4 a.m. or 5 p.m. on Thanksgiving? Unclear. If stores, like REI, honor their mission when making decisions about holiday operating hours, then they will likely benefit – even if that means they opt to remain closed.
Whether you will recline in a Tryptophan coma or rally with the crowds, enjoy!
Anne Converse Willkomm
Director, Graduate Studies