REI’s decision to keep its doors closed on Black Friday 2015 was almost as divisive as the debate over how to cook the best turkey.

While many analysts felt this was a brilliant PR campaign, others had significant concern over the risks of missing out on one of the largest shopping days of the year.

But after the dust settled on yet another holiday shopping season, it became clear that REI’s move belonged solidly in the “win” category. In fact, other retailers should take note: REI’s example shows us that the industry trend of expanding the holiday season battlefield earlier and earlier may be a battle to the bottom, and the need to extend hours may be a signal of brand weakness, not brand strength.

Black Friday Blues

The earliest known use of “Black Friday” as it’s used today originated in 1961, and while many retailers disliked the moniker, it stuck.

Recently, many retailers have spread the joy onto “Black Thursday,” starting in 2011 with a slew of big brands opening at midnight, including Best Buy, Target, Walmart, Macy’s, Kohl’s and Toys“R”Us. Thursday opening times crept earlier from there.

Of course, this brinkmanship is a natural consequence of a hypercompetitive environment in which retailers think being first will help them capture a finite number of consumer dollars before their competitors can. Additionally, in some cases, mall-based retailers have been obligated to open their doors whenever the mall is open for business, leading to a domino effect.

Fast forward to 2015, when over 151 million shoppers hit the stores (or screen) during the four-day Thanksgiving weekend.1 And even though the number of shoppers sounds impressive, in-store traffic has dropped and sales have been falling since 2012. Only the number of web shoppers has increased.

As shown in Exhibit 1, double-digit increases in online sales from 2014 to 2015 were not enough to bolster sagging brick-and-mortar sales, bringing sales down an estimated 4%.2

zoom iconEXHIBIT 1: In-store Thanksgiving and Black Friday sales slumped in 2015.Why? Several reasons, chief of which may be a new phenomenon some analysts are calling “Gray November”—an arms race to offer holiday promotions days or even weeks before Thanksgiving. Amazon even launched its Black Friday deals during the first week of November.

Another reason is that at least some consumers are starting to shrink away from a desire to shop before their tryptophan high has worn off.

A Kurt Salmon survey of more than 1,200 consumers in May 2016 found that 34% and 36% dislike or strongly dislike shopping on Thanksgiving and Black Friday, respectively, the highest for all holidays. (See Exhibit 2.)

zoom iconEXHIBIT 2: Consumers are fed up with Black Friday and Thanksgiving shopping.This may be in part thanks to labor groups and other advocacy groups, who have become increasingly vocal in their efforts to reduce or eliminate Black Friday and Thanksgiving Day store hours in the past few years.

As a result, opening on Thanksgiving doesn’t necessarily boost overall holiday season sales. Opening earlier can cause some retailers to actually cannibalize their own Black Friday sales while having to pay holiday wages on Thursday.

And in an omnichannel world, customers who feel the urge to shop on Thanksgiving can do so online even if stores are closed. In 2015, Walmart decided to offer its Black Friday deals online for the first time, starting at 12:01 a.m. on Thanksgiving morning. This tactic was one major reason why Walmart’s e-commerce sales contributed 25 basis points to the retailer’s same-store sales growth (SSSG) of 1.2% in the fourth quarter.3 Given all of this, it’s not surprising that some stores are staying closed on Thanksgiving, hoping to send a family values signal to both their consumers and their employees.

Retailers who had previously opened on Thanksgiving but changed their minds in 2015 included Staples, H&M and GameStop, joining purists of Thanksgivings past like lululemon, Urban Outfitters, TJX, Ross, Nordstrom, DSW, Lowe’s, Costco and PetSmart. They faced off against pro–Black Thursday retailers like Michael Kors, Coach, J.Crew, Victoria’s Secret, Abercrombie, Gymboree, JC Penney, Walmart, Target, Big Lots, Old Navy and Best Buy.

How did each camp fare? A Kurt Salmon audit of 53 retailers across apparel and hard goods found that retailers open on Thanksgiving saw -0.2% SSSG on average for Q4 2015, while retailers closed on Thanksgiving reported +2.0% SSSG in the same time period, compared to an average of +0.7% across all retailers surveyed. (See Exhibit 3.) Kurt Salmon also found that retailers open longer hours over Thanksgiving and Black Friday averaged lower SSSG.

zoom iconEXHIBIT 3: Thanksgiving closure correlated with better average SSSG.REI’s Revolution

Not only did REI join many other retailers in remaining closed on Thanksgiving, the retailer didn’t open a single one of its 143 doors on Black Friday either. Even more significantly, REI leveraged its decision into a huge media statement.

REI paid its 12,000 employees to join thousands of consumers and to choose #OptOutside on Black Friday. REI announced the campaign in a video of its CEO posted on its website and social media platforms and got more than 175 other organizations to join in—expanding the campaign’s reach for free. For example, nonprofit Save the Redwoods League and 49 California State Parks partnered to offer free admission on Black Friday.

Even REI was surprised at how well its campaign resonated. “The idea has struck a chord—far more than we expected,” CEO Jerry Stritzke said in a press release. “We did this to share our passion for reconnecting with the people we love, in the outdoor places we love. Honestly, we are surprised by—and very grateful for—the number of groups joining in. Clearly people are looking to do something a bit different with their time.”

The idea paid off—REI says its web sales increased 26% during Thanksgiving weekend, while its #OptOutside campaign garnered 1.4 million social media hits, the vast majority of which were incredibly positive. Meanwhile, for 2015 as a whole (REI doesn’t report quarterly results), REI’s same-store sales grew 7%, online sales grew 23% and a record number of over 1 million new members joined its co-op program.REI also had record-high revenues of $2.4 billion—an increase of 9.3% over 2014.

In addition to these financial wins, the #OptOutside Black Friday campaign brought other benefits, as shown in a Kurt Salmon survey of more than 1,200 consumers.

First, the campaign had staying power. Even in May 2016, when the survey was conducted, 34% of people aware of REI and 47% of people who’d shopped at REI in the past year remembered it.

Not only did people remember the campaign six months later, they said it improved their perception of REI. Seventy-seven percent of current consumers and 65% of people who don’t even currently shop at REI had more positive brand perception, which may lead to new customers and more sales.

More importantly, 49% of REI consumers still made a purchase at REI during Thanksgiving weekend, and 75% of REI’s core consumers did (people who shopped there six or more times in the past year), with only 12% of consumers saying they were inconvenienced by the store closure. These high numbers were in spite of Black Friday closures—that’s because 87% of consumers who had planned to shop at REI on Black Friday made their purchase on another day or online. (See Exhibit 4.)

zoom iconEXHIBIT 4: Black Friday closure didn’t deter the majority of REI consumers.Closing Time?

While this strategy clearly paid off for REI, it’s not the right fit for every retailer. Retailers with weaker brand pull and more commoditized products may find that they have to stay open on Black Friday, and even Thanksgiving, to make themselves the destination for shoppers to buy products they could get from several other competitors. Consider JC Penney, which has chosen to open earlier and earlier on Thanksgiving each year, from 6 p.m. in 2013 to 5 p.m. in 2014 and 3 p.m. in 2015—three hours earlier than rivals Macy’s and Kohl’s. At least in 2015, the move paid off for JC Penney in the form of stronger comps.

But for retailers whose brand has a strong pull, this strategy of closing for Thanksgiving and Black Friday could pay dividends, as many consumers can wait to purchase exactly the product they want on another day without expecting as deep of a discount and may also feel the retailer has some holiday spirit.

  1. National Retail Federation, 2015
  2. ShopperTrak, Adobe, 2015
  3. TheStreet, 2016
  4. Retail Dive, 2016