No Black Friday Here!

The stores snubbing Black Friday's mega-sales

Many retailers flaunt rock-bottom prices the day after Thanksgiving, but others opt out of the shopping frenzy. Ethics, image and margins all play a part in the calculus.

On Black Friday, REI's 181 storefronts will go dark. None of the US outdoor cooperative's 16,000 employees will clock in at retail locations, warehouses or offices – they'll all be on paid leave instead. Bucking the trends of many major brands, the day after Thanksgiving, REI will be closed.

For many shoppers, Black Friday kicks off the zenith of the shopping season – in the US, nearly 73 million people visited a brick-and-mortar store during 2022's Thanksgiving holiday weekend, with billions spent online, too. And even without the US-based November holiday on their calendars, other parts of North America and Europe have jumped on the consumer trend.

Every year, shoppers mob stores for steep markdowns. Widely circulated videos on social media often highlight the chaos wrought on stores themselves: display banners torn down; shelves stripped bare; and even occasional spats of violence (although these aren't usually due to lack of stock). But some retailers balk at Black Friday's consumerism culture.

A few retailers, like REI, don't open at all. Others take different approaches: Everlane, the online apparel retailer, used to shut its entire site down for Black Friday, but now donates money to a variety of causes through the Everlane Black Friday Fund. In several countries, Ikea's 'Green Friday' campaign in 2022 doubled the store credits of customers who chose to sell their old Ikea furniture back to the company for the entire month of November. (Ikea hasn't yet announced whether it will bring back the programme this year.)

For some brands, the decision is motivated by their corporate values and image. Retailers that appeal to environmentally and socially conscious shoppers often don't feed this frenzy for profit. "They just don't feel comfortable participating in a day, or in a sales promotion, that really promotes unnecessary consumption," says Lisa Hutcheson, managing director of retail strategy at J.C. Williams Group. "They really want to make sure that they're staying true to their brand purpose."

Yet many of these brands aren't simply snubbing Black Friday out of the goodness of their hearts – there's cachet and even money on the other side of these decisions. Ben Steele, REI's chief customer officer, says when REI announced in 2015 that it would opt out of doing Black Friday, the resulting press attention generated more than seven billion impressions – someone hearing about REI through TV, radio, print, websites or other media. "A lot of people became aware of REI, and what makes REI unique and special and different in that moment," he says.

Beyond corporate values, a brand's image also drives this decision. Would it seem out of place for a business to offer sales – would it devalue the brand to do so? David Soberman, professor of marketing at the University of Toronto's Rotman School of Management, says this calculus is a factor. "Let's assume you have an Omega watch store," he says, referring to the luxury Swiss watchmaker. "How often do they participate in Black Friday? The answer is never – and it has to do with brand fit." Brands including Apple and Tiffany's also decline to participate for similar reasons.

Aside from reputation, for some stores, Black Friday simply isn't a practical business move.

Part of the strategy of Black Friday, says Soberman, is using rock-bottom prices on select premium products to lure in customers to spend money on other goods they might not otherwise consider buying, many of which aren't on sale. This works well for retailers with high volumes and massive distribution networks, even if they take a loss on the deeply discounted items.

Yet this strategy relies on shoppers' willingness to impulse buy – and that isn't as likely at a higher-end store. Take outdoor retailer Patagonia: even fans of the brand might only visit their stores a couple times a year, when they have a specific need, and are willing to drop a few-hundred dollars to satisfy it. They're not going to be moved to buy on a whim, says Soberman: "You might go into a Patagonia store to buy a jacket, but what's the likelihood that you also want to buy a knapsack or a pair of hiking pants? It's much lower." Indeed, Patagonia doesn't participate in Black Friday sales.

Robert Overstreet, assistant professor of supply-chain management at Iowa State University's Ivy College of Business, US, also points out that some retailers don't want to go through the pain of advertising and discounting to a customer base that might not be very dedicated to them in the first place. "They're not looking for the bargain shoppers," he says. "They're looking for people that are loyal to a brand."

In retail marketing, prevailing trends show loyal customers often become repeat customers and offer longer lifetime value to a brand. They are also generally easier to maintain than constantly finding new ones. Soberman adds appealing to bargain hunters through massive Black Friday discounts may even turn core shoppers off if hordes of bargain hunters plough through a store looking for deals and disrupt them.

There are many reasons retailers take decisions to snub Black Friday, but at the core, it's about how the shopping bonanza plays into a store's business strategy. Ultimately, the long-term view is what matters. "Their value is about every day," says Hutcheson, "and not just using a sale to promote their products."

Source: BBC Worklife 

Black Expressions