That Thanksgiving is shopping holiday, or at least a reasonable opening act for the four-day festival of commerce that commences on Black Friday and caps off on Cyber Monday, is pretty much accepted commerce cannon. What most people don’t realize is how long this has been the case in the United States. Thanksgiving, as we know it, has only been around since the 1930s.
When Abraham Lincoln released the first Official Thanksgiving Day Proclamation in 1863 as a means to bring the divided — and war-weary — American people together, the date was set as the last Thursday in November. Thanksgiving outlived Lincoln, and every president that followed him offered the same proclamation every year declaring a national day of Thanksgiving to be celebrated on the last Thursday in November.
Until 1939 that is, when the last Thursday in November fell on the 30th and retailers flooded President Franklin Delano Roosevlents office and begged him to consider moving the date. There was the small matter of a raging depression — and retailers argued that the shortened shopping season could do them in.
And so Roosevelt — months away from embarking on U.S. history’s only third presidential election campaign — got a jump on rewriting traditions and moved Thanksgiving to the fourth Thursday of November instead of the last one. Some complained, some insisted on celebrating on the 30th that year and Congress settled the matter by passing a law Dec. 26, 1941 declaring the fourth Thursday in November as Thanksgiving — all because retailers needed a more extended holiday shopping season.
It is a system that mostly works out for retailers, but for the 12 times in the last 80 years that were like this year (2019), when Thanksgiving fell on the latest possible date it can be in November — the dreaded 28th. And, as has been their custom for the last eight decades, retailers by and large are not happy with the calendar this year — with many warning that it could kick off a shaky end to the year — because the holiday shopping season in 2019 is a nearly a full week shorter (6 days to be exact) than it was in 2018 when Thanksgiving was early.
But do those complaints hold water this year the way they did when Roosevelt decided to tweak the national holiday calendar to better prime the pump for holiday spending? A look at some expert opinions and PYMNTS' fresh Black Friday spending data tells a somewhat different story. That isn’t to say that some retailers might not be coming in for a hard landing to close off 2019 — just that more likely than not, it won’t be the calendar that does it to them.
The Sky Is Falling
Unlike the unpredictable weather, last year’s preferred scapegoat for retailers which endured slower than expected sales, the 2019 calendar has been a long-anticipated problem among retailers. As early as March of this year, Dollar Tree started warning investors on its earnings call that the six-day-shorter period would likely hurt year-end sales.
In its earnings call last month, toymaker Hasbro also worked to temper investor expectations, repeatedly noting that a holiday shopping season that is six days shorter will take a bite out of toy sales, as parents will have fewer weekend hours with which to shop this year. The toymaker also promised to partner directly with certain (unspecified) retailers to buoy demand to counterbalance the shortage of hours in the shopping season.
Macy’s saw its stock price hit hard 2019 after over-promising and under-delivering on its 2018 shopping season and thus was perhaps more circumspect in predicting this season. CEO Jeff Gennette, in the firm’s last earnings call with analysts, noted that the short season was one of several headwinds that the department store is facing as the 2019 shopping season is getting up and underway. Gennette also called out retail tariffs, uncertainty about the economic environment and unseasonable weather patterns as issues the long-struggling department store retailer is expecting to face this shopping season. One could find similar sentiments on both Kohl’s and JC Penney’s earnings reports for Q3 — and all three retailers revised down both their Q4 and 2019 revenue predictions.
And while it might be easy to write off these complaints as the excuses of firms otherwise struggling — notably, not only the struggling are publically grousing about the short shopping season. Target just came off a blockbuster Q3, but CEO Brian Cornell still pointed out that six-day shopping shortfall — albeit in a much less fatalistic manner than some of his retail fellows.
“It’s a very compressed holiday season. Every day counts,” Cornell noted.
But is it all that compressed a holiday season? Retailers think so, but the analysts (and the early data) don't seem to entirely agree with them.
The Sky Is Not Falling
For all the grim prognostications out there of the effects of the so-called shortened season, many have their doubts. First, as previously noted, the late Thanksgiving has happened quite a few times in the last 80 years — and retailers, as a rule, have found ways to adapt to it.
In 2013 — the last time it happened — retailers opened up on Thanksgiving night to stretch out the shopping season and get a day back. When Thanksgiving fell on the 28th in 1996, Walmart briefly turned all their store locations into 24 hours locations for the duration of the shortened holiday season. Moreover, when one compares those years to the longer seasons around them, the lost week didn’t make much of a difference in terms of how much money consumers spent, though it had some small effect on how consumers spent it.
And there is a reason for that, according to Craig Johnson, president of Customer Growth Partners LLC — we no longer live in 1939 when it was essential to have a big, single day kickoff event for the holiday shopping season because mass advertising as we know it didn’t yet exist. It’s why things like the Macy’s Thanksgiving Day parade come into existence during roughly the same time (1924) — it was an easy way to light up a beacon to the consumer community.
“The reason some retailers are caught up on this is that in the olden days, meaning long before internet, even before TV advertisements, the traditional Christmas shopping season began the day after Thanksgiving,” said Johnson told Bloomberg. “Of course, the internet and 24/7 shopping has made those old formulas obsolete.”
And, he noted, retailers more or less know that already and have for the better part of the last decade as shopping trends have pushed the start of the shopping season right up to Halloween’s backdoor on Nov. 1. This year, in fact, Walmart even crossed the invisible barrier that covered Halloween and decided to roll out its holiday shopping deals on Oct. 26, and within the next seven days nearly every major retailer made similar moves with sales, shipping offers and almost countless social media ads pushing their wares. The shopping season isn’t shorter, Johnson noted, because it more or less begins on the same day for everyone in early November.
“Statistically, the holiday shopping season is November and December, and unless I’m mistaken, that means it’s 61 days every year,” Johnson said. The retailers talk about a shortened holiday, but “they’re using it as an excuse.”
Because for some retailers, particularly the brick-and-mortar players, it does look like some excuses are going to need to be made come January.
According to PYMNTS latest Black Friday spending data — it was a good news, bad news day for retailers when it came to consumers changing spending habits. The goods news is that people are still venturing out into the world to shop that day — the not so good news for brick-and-mortar players is the number keeps falling. According to PYMNTS data, roughly 60 percent (59.5) bought at least one thing at a store on Black Friday, down a shade from the 61.8 percent who did so the year before.
Among the roughly 40 percent who didn’t hit the shops, leading reasons for staying away were store crowds, that they did not need anything, could not afford it or they prefer to spend their time doing other things.
Those who did went hunting for deals. This year, 53 percent of consumers who bought at least one item in-store said that they did it to get access to those special deals, but even that number is slipping. Last year, 59.1 percent of Black Friday shoppers said they specifically went to the physical store to get a deal.
Consumers are, however, shopping online. About 20 percent shopped online and online only on Black Friday. Meanwhile, 18.2 percent of Black Friday shoppers this year were omnichannel shoppers buying online and picking them up in the store. That is up slightly from 2018, as a result of fewer people going to the physical store to shop.
Consumers were also spending more than they did last year — roughly one-third (34.1 percent) more. The largest increase in spending was, perhaps unsurprisingly, among those earning more than $100,000 in annual income, who spent $143.70 more than last year. But, though the increase was larger among the highest bracket of earners, notably all income brackets — including those who make less than $50,000 a year — reported an increase.
Spending was also heavily influenced by generation, with millennials winning the big spenders' crown by dropping an average of $509.50 on Black Friday purchases this year, up from $382.40 in 2018. Bridge millennials, those between 30 and 40 years of age who “bridge” the age gap between Generation X and millennials, spent big too, shelling out an average $479.40 on Black Friday this year — the second-highest average of any age group.
And while more spending is doubtlessly good news among retailers — it is notably better news for some than others. Because the biggest spending groups making the most significant increases in their spends are also the most digital shoppers least likely to hit the store if they can snap it up on their tablet or smartphone instead. According to PYMNTS data, 48 percent of millennials and 54.1 percent bridge millennials reported their Black Friday spending happened online and not in physical stores. In this light, it should come as no surprise that Amazon — the bridge millennials favored shopping destination according to previous PYMNTS data — was the big Black Friday winner this year, with some 73 percent of consumers reporting they made a purchase there.
So will a “shorter season” be the Grinch that stole the Christmas spend in 2019? Probably not, it seems for digital retailers that the holiday shopping season started a month ago — and will carry on through the end of the month unabated.
Still, we imagine it will catch an awful lot of blame come January when the numbers start rolling out, particularly the ones that disappoint. But we might submit that the problem isn’t the Gregorian calendar as it is written — but a commitment to a retail calendar that existed a generation ago that has spent the last 20 years being quietly disrupted out of relevance.