While it might have cost them some money in the short term, it was a very savvy business decision for many reasons.
The most obvious reason… all the free publicity REI is getting as business reporters and bloggers attempt to list and defend the company’s possible reasons for this decision.
What follows is a list of some of the factors that the company might have considered before making its announcement on Monday.
Black Friday Sales Are Not the Event That They Once Were
“Shoppers can see the deals way before the day they become available, compare the products, and if they’re enterprising and on the ball, they can find deals just as good or better right now – in fact, there are now price trackers that will help shoppers predict when the price will be the lowest, and apparently that more often happens the Friday before Thanksgiving, not after,” writes Baird.
With this in mind, it is not surprising that The National Retail Federation reported that there was an 11 percent decline in total spending in the four-day period between Thanksgiving Thursday and Sunday in 2014, when compared to the previous year.
It is also interesting to note that according to Google, about one in four consumers who responded to a survey conducted in January of 2015 said they had done some holiday shopping before Halloween last year. If this is true again this year, many consumers are already in stores looking for the best deal on the perfect gift.
Many Shoppers Are Turning to the Internet for Their Holiday Shopping
According to the National Retail Federation, “Almost half of holiday shopping, consisting of browsing and buying, will be done online: average consumers say 46 percent of their shopping (both browsing and buying) this holiday season will be conducted online, up from 44 percent last year.”
An Emphasis on Employees and the Outdoors Resonates With REI’s Customers
In an effort to capture more of a consumer’s holiday budget, many stores are opening earlier and earlier each year. In fact, many retailers will be open in the early evening on Thanksgiving Day.
While people often turn out in droves, many consumers (and retail employees) complain that retailers are missing the point. They feel that the holidays should be reserved for family time, not shopping.
By closing on Black Friday and giving their employees a paid vacation day, REI is sending a message that the family, employee well-being, and getting outdoors during the holiday is important to them, too.
Part of the reason that REI is able to make this unorthodox business decision is that REI is one of the few large retail cooperatives in the nation, not a publicly traded company.
“That basic structure frees up the business to do things that don’t really make sense in conventional market terms,” says Erbin Crowell, executive director for the Neighborhood Foods Co-op Association in a recent Washington Post article.
“Even if an observer called it a marketing strategy, it’s a really intriguing one that points to the fundamental difference between co-ops and traditional public corporations,” says Crowell.
“Clearly they’re seeing their social purpose, their cooperative structure, has value again,” Crowell continues, “and it’s something they want to lift up and share.”
REI made a bold move when it decided to announce that its brick and mortar stores will be closed on Black Friday and that employees will receive a paid vacation day in honor of the holiday.
Many factors may have played a role in this decision, including the fact that many consumers have been getting some of their holiday shopping done before Black Friday. In fact, many start before Halloween.
It is also important to point out that while the brick and mortar stores will be closed, customers can still purchase items from REI online.
The free publicity that REI is getting is also an added bonus.
In the end, REI’s management are undoubtedly hoping that this decision will resonate with consumers and create loyal customers who identify with the brand and the values that REI feels are important.
Photo credit: Chris Phan on Flickr.
Video credit: CNNMoney on YouTube.