Retailers Want You in Stores on Black Friday

Don’t let locked display cases and finicky self-checkout stations fool you. Retailers really want you in their stores this holiday season.

That goes double for Black Friday, with brands hoping for a surge in foot traffic on the day after Thanksgiving. Experts say companies would rather ring up customers at registers than online, where widespread promotions and shipping costs eat into margins, while businesses have a better shot at nudging people to buy more stuff in their real-world shops. 

Many retailers are trying to capitalize with in-store specials this year. Target (TGT) will launch sales of a book about Taylor Swift’s “Eras” tour in brick-and-mortars, along with vinyl and CD versions of her last album, before offering them online a day later. Kohl’s (KSS) will hold a sweepstakes with prizes including a Florida vacation. JCPenney (JCP) will hand out snow globes.

Their goals are the same: get you in the door. 

“A lot of [retailers] frankly prefer it—even with store labor shortages, even with raising minimum wages,” said Kelly Pedersen, U.S. retail leader for consulting firm PwC. “It’s a more profitable way of doing business.” 

Spending Expected to Rise for the Holidays

Consumer spending this holiday season is generally expected to rise 3% from last year, according to consulting groups. That’s a relatively modest growth rate, Bain & Co. said, with the inflation seen in recent years still weighing on many Americans. (Spending online is expected to grow somewhere between 7% and 9%, according to Deloitte’s estimates.)

Still, Black Friday could be a blockbuster. Bain is forecasting that Americans will spend a record-setting $75 billion in stores and online from the day after Thanksgiving through Cyber Monday.  

Stores see about three times more traffic on Black Friday than they do during a typical day in the holiday season, according to Joe Shasteen, global head of advanced analytics at RetailNext, which tracks store visits and advises retailers—though many of those visitors are merely browsers, with actual sales peaking on the Saturday before Christmas Eve. 

“From a traffic standpoint, Black Friday is still king,” Shasteen said.

Why Retailers Like Having You in the Store

Companies are eager to engage people on shop floors. In-store purchases are less likely to be returned than digital transactions, industry consultants said. They also have higher profit margins. Shipping costs are lower, Pedersen said, while online prices tend to be less expensive since e-commerce is a more competitive market, rife with promotions.

Retailers want in-store shoppers to go away satisfied. On a Wednesday conference call, Target executives said the company will sometimes make items unavailable for same-day shipping to increase the chance that someone in a store can walk out with a desired item.

Brick-and-mortar shops have trained employees to upsell customers, suggesting – for example – items that might pair well with something they’ve already chosen. Shop floors are set up to encourage splurges and impulse buys, Shasteen said. And making the most of a brand’s aesthetic is harder online, where fabrics can’t be felt, lotions can’t be smelled, and products are shown in small, thumbnail images, he said.

“If somebody walks into a store, you have a captive audience,” Pedersen said.