NEW YORK/BLOOMINGTON, Minnesota (Reuters) – Retailers declared their experiment with earlier store openings to kick off the holiday shopping season a success on Friday, with those new hours expected to be a Thanksgiving night staple for more retailers next year.
Stores such as Target Corp opened hours before midnight on Thursday to try to capture a bigger piece of the retail pie. The move seemed to bring out a different type of shopper than the usual one who grabs the “Black Friday” deals, analysts said.
That meant by Friday morning, some shoppers, like Christian Alcantara, 18, at a J.C. Penney Co Inc store in Queens, New York, had already made a lot of their purchases. J.C. Penney stuck to a more traditional 6 a.m. EST (1100 GMT) Friday opening.
“They should open earlier. I’ve been everywhere else and I’ve already shopped,” he said.
Shoppers like Alcantara are likely to force holdouts like J.C. Penney to move their post-Thanksgiving sales into Thursday night next year, said Liz Ebert, retail lead at consulting firm KPMG LLP.
“There will be pressure on them. There’ll be an expansion of it next year,” Ebert said.
Hard data on “Black Friday” store traffic will not come in until this weekend. But analysts said retailers who opened early brought in a non-traditional Black Friday shopper, with more families coming in together and buying more than just the “doorbuster” sale items.
“I’ve never seen parents bring so many kids on Black Friday,” Toys R Us Chief Executive Jerry Storch said.
The National Retail Federation expects sales during November and December to rise 4.1 percent this year, below last year’s 5.6 percent increase. That made store operators’ strategy important as they battled each other, rather than seeing a growing pie in a season when U.S. retailers can make a third of their annual sales and 40 to 50 percent of their profits.
“Retailers want them to buy now, they want to get that share of wallet early,” said Michael Appel, a director at consulting firm AlixPartners. He noticed that the Galleria Mall in White Plains, New York, was busy from midnight to 3 a.m., but that traffic, while still brisk, was less heavy by midmorning.
Shoppers used smartphones and tablets and a lot of research as they hit stores, a mobile phenomenon that started last year and seemed to be more prevalent this year.
Thom Blischok, chief retail strategist and a senior executive adviser with Booz & Company’s Retail practice, was waiting on line with one woman in Phoenix, who was shopping for a refrigerator. Using her mobile device, she found the appliance online for the same price and left the store without. She intended to buy it online instead.
“There’s a fundamental transformation of shopping,” he said.
Mobile devices account for 45 percent walmart.com traffic and online traffic coming from Walmart’s mobile app was three times bigger than last year, Joel Anderson, chief executive of Walmart.com, said.
Overall, online sales were up 20 percent versus the same period last year, through 3 p.m. EST (2000 GMT) on Friday, IBM said.
The National Retail Federation said 147 million people would shop Friday through Sunday, when deals are at their most eye-catching – down from 152 million the same weekend last year.
The NRF estimate did not account for Thursday shoppers and anecdotal evidence suggested retailers opening earlier may have cut into traffic on “Black Friday”, the traditional start of the holiday season that denotes the point when retailers in the past would turn a profit for the year.
“People seemed to be shopping quite a bit, although in talking to mall management, it seemed that traffic was not as busy as last year,” Deloitte retail analyst Ramesh Swamy said.
Retailers were also using technology better, allowing sales staff to match prices customers found online and having them use tablets as mobile “checkout stands” so buyers did not have to wait in line, a service consumers were quickly coming to expect.
“I even heard customers complaining about a retailer that didn’t have mobile checkout,” he said.
SAVING UP FOR CHRISTMAS SPREE
According to a Reuters/Ipsos poll, two-thirds of shoppers were planning to spend the same amount of money as last year or were unsure about plans, while 21 percent intended to spend less, and 11 percent planned to spend more.
“I definitely have more money this year,” said Amy Balser, 26, at the head of the line outside the Best Buy store in the Mall of America in Bloomington, Minnesota. “I definitely don’t think (the economy) has bounced back anywhere near as much as it needs to, but I see some improvement,” she said.
For others, Christmas is the focal point of their annual shopping.
“We cut back spending on birthdays and anniversaries so we’d have more for Christmas. We’ve adapted,” said Cheri Albus, 58, of Papillion, Nebraska, after shopping at J.C. Penney at Westroads Mall in Omaha.
Retail stocks rose in holiday-shortened trading on Friday, in line with gains across the market. Among the leaders, Wal-Mart ended up 1.9 percent and Macy’s Inc rose 1.8 percent.
STARTING EARLY
Across the country, store lines were long – in the hundreds or more in many places – with the move toward earlier opening hours appearing to help. By sunrise on Friday, it was commonplace, even at large stores in the major cities, to find many more staffers than shoppers.
While the shift to earlier openings was criticized by store employees and traditionalists because it pulled people away from families on the U.S. Thanksgiving holiday, many shoppers welcomed the chance to shop before midnight or in the early morning hours.
Some workers used the day to send a message.
OUR Walmart – a coalition of current and former Wal-Mart staff seeking better wages, benefits and working conditions – targeted Black Friday for action across the country after staging protests outside stores for months.
Nine protesters were arrested on misdemeanor charges after blocking a street outside a Walmart near Los Angeles, police said. Three of those arrested were Walmart workers, OUR Walmart said.
Wal-Mart Stores Inc’s U.S. discount stores, which have been open on Thanksgiving since 1988, offered some Black Friday deals at 8 p.m. on Thursday and special deals on certain electronics, such as Apple Inc iPads, at 10 p.m.
At the Macy’s store in Herald Square in Manhattan, the line at the Estee Lauder counter was four deep shortly after its midnight opening. The cosmetics department’s “morning specials” included free high-definition headphones with any fragrance purchase of $ 75 or more, and a set of six eye shadows for $ 10.
But for some people, cheap wasn’t cheap enough – like the Macy’s shopper who bought Calvin Klein shoes at 50 percent off but was still not satisfied.
“I was hoping for deeper discounts,” said Melissa Glascow, 35, of Brooklyn, New York.
That could actually be an intentional strategy to help retailers’ profits.
“It appears that manufacturers and retailers are making concerted efforts to drive margins, which may take some of the sales sizzle out of a traditionally big selling day/period, but should be positive to gross margins,” Credit Suisse analyst Gary Balter said in a note to clients.
Lines at Best Buy stores were similar to last year but the traffic to its website was “significantly” higher, Shawn Score, head of the company’s U.S. retail business, told Reuters.
(Additional reporting by Martinne Geller and Jochelle Mendonca in New York, Jessica Wohl and Nivedita Bhattacharjee in Chicago, Brad Dorfman in Milwaukee, Paul Ingram in Tucson, Arizona, Jason McLure in Littleton, New Hampshire, and Barbara Liston in Orlando, Florida; Writing by Brad Dorfman and Ben Berkowitz; Editing by Nick Macfie, David Holmes, Jeffrey Benkoe, Dale Hudson and Leslie Gevirtz)
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