Black Friday is two weeks away, but the annual shopping pilgrimage — some might say, self-flagellation — is already in the headlines, in part thanks to a retailer that is refusing to participate.
Outdoor and sporting goods store REI has declared that it will be closed the day after Thanksgiving. It's paying its employees full wages to stay home and encouraging its customers to spend the day outdoors through its #OptOutside social campaign.
“This fits with their image and sets them apart from other retailers,” said Susan Mantel, a marketing professor at Ball State University. “Besides that, their employees will be happy, and that always makes for great customer service.”
The Black Friday Experience
As for other employers ... how many of the billions of dollars at play that day can they grab, and how many employees will they make work at 4 a.m. to do so?
That may be a cynical view, but it's a strain of view that's apparently growing among consumers who are becoming more and more demanding, and less and less tolerant of long, ridiculous lines and potential violence on Black Friday, all in a competition over a limited number of steeply discounted, “loss leader” items.
In fact, certain customers are willing to forgo any discount for a better shopping experience, said Johann Wrede, SAP’s global senior director for solution marketing and customer engagement.
He cited American Express research that suggests two-thirds of customers would actually pay more for better service. About 16 percent of consumers are willing to spend 20 percent more.
"Retailers, as almost any major enterprise, are always slower to change than their customers. As the digital economy continues to evolve, consumers are rapidly becoming more demanding," Wrede said.
The Sound of Money
In the case of Black Friday, it's understandable. The name of the holiday, after all, comes from how retailers go into the black for the year because of Black Friday revenue.
And the origins of Black Friday advertising, as related in a white paper from Balboa Capital, go nearly back all the way to the first holiday sales extravaganza held by Macy’s in 1924.
Back then, retailers wouldn’t advertise holiday sales until the Friday after Thanksgiving, so all the feelings of surprise and urgency are ingrained in the minds of both consumers and retailers. It’ll take some effort to rewrite nearly a century’s worth of learned behavior for both parties,
"Changing the business to focus on year-round customer engagement requires establishing new processes, implementing new systems and training employees, which not only takes time but also eats into margins," Wrede said.
Social to the Rescue
But all is not lost. There could be a transition away from the Black Friday brick-and-mortar horror stories. Social media. Being able to embed a purchase button in a customer's feed could be the key to "upping the convenience of mobile commerce and eliminating barriers to purchase," Wrede said.
But he stresses, the key again is customer service.
"That the order placed via Twitter can be tracked in the web store, call center or retailer’s mobile app later on, that the reaction of new audiences is captured and used to shape and personalize future interactions, and that after-sale customer service is just as personal and convenient as the purchasing process was," he explained.
Old Habits Die Hard
Still, don’t expect social media or year-round customer-centric engagement efforts to replace the kind of Black Friday that Macy’s pioneered back in the Roaring ’20s.
As the Irvine, Calif.-based finance company Balboa Capital reports in its white paper, brick-and-mortar retailers served — some would say, engaged in mortal combat with — 87 million shoppers last year on Black Friday (with another 45 million on Thanksgiving Day), reaping $51 billion in sales.
And all indications, according to Balboa, are that strong sales will occur again in 2015. The entire holiday season could be a “massive” success, with the National Retail Federation forecasting $630 billion in sales through Christmas Eve, up 3.7 percent over 2014.
With that in mind, Balboa’s recommendations for retailers are less about changing old ways than about doubling down on them.
Its steps to success include identifying sales goals based on past numbers, getting your pricing right, staffing and stocking up in anticipation of the rush and advertising. Here, the reports’ authors focus more on small businesses, recommending they not discount the value of local print advertising while promoting sales and hours on digital channels as well.
Or perhaps the solution is a hybrid approach, between tradition and REI’s approach: Shop at an outdoor mall.
Title image by Daniel Nanescu