How Thanksgiving Day Store Closures Impact Black Friday Sales
Shoppers say they don’t want retailers opening their doors on Thanksgiving Day, but research from the location intelligence firm Foursquare tells a different story. Analyzing proprietary foot traffic data at major retailers, Foursquare found that stores that open earlier on Thanksgiving Day drive more visits and steal share from their competitors.
To reach this conclusion, Foursquare’s data science team looked at data from 2016 and compared foot traffic in so-called “Thanksgiving blue law states” — where retailers are prohibited from opening on Thanksgiving Day — to comparable states with no legal restrictions. Foot traffic data was aggregated from the company’s apps, Foursquare City Guide and Swarm, and anonymized to protect the privacy of app users.
What Foursquare found was that retailers in three Thanksgiving blue law states — Massachusetts, Rhode Island, and Maine — saw an average foot traffic lift of 23% over Thanksgiving weekend, while neighboring states without legal restrictions preventing stores from opening on Thanksgiving Day saw a greater average foot traffic lift of 35%.
Retailers in states without Thanksgiving blue laws had a competitive lead in Foursquare’s analysis. Those retailers located in Massachusetts, Rhode Island, and Maine never made up for the ground they lost on Thanksgiving Day even once data from Black Friday and the rest of the weekend was taken into account.
“There are a lot of factors that go into deciding when to open on a holiday that is intended to be shared with friends and family,” says Foursquare CEO Jeff Glueck. “The data shows that there is clearly an appetite for shopping on Thanksgiving Day.”
The time that stores opened on Thanksgiving Day had an impact on the foot traffic in Foursquare’s analysis, as well.
Comparing opening times to foot traffic patterns at three national department store chains — JCPenney, Macy’s, and Sears — Foursquare found a direct correlation between opening time and number of shoppers.
Of the three department stores that Foursquare looked at, JCPenney opened the earliest, at 3:00 on Thanksgiving afternoon. The store’s early opening brought in almost 3x more customers (or a 280% increase in foot traffic) compared to a baseline Thursday. A whopping 26% of JCPenney’s Thanksgiving Day foot traffic came within the first two hours after opening, showing the direct impact of the retailer’s early start.
Although JCPenney and Macy’s were close in terms of foot traffic lift between Friday and Sunday after Thanksgiving, JCPenney’s lift on Thursday—280% vs. 120% at Macy’s—helped the retailer win out in terms of overall Black Friday weekend lift. Sears, with the latest opening time, saw just a 90% bump in overall traffic.
Although the results are jarring, Glueck cautions that there are some limitations in Foursquare’s analysis.
“Part of our analysis looked at foot traffic in states impacted by blue laws, which prevent retailers from opening their doors on Thanksgiving Day,” he says. “While this makes for an interesting case study, for retailers in those states there aren’t really any actionable steps they can take to prevent the lost ground from Thanksgiving Day. Knowing that there is an appetite for midnight shopping on Thanksgiving Day, retailers impacted by the Thanksgiving blue laws can market those midnight offerings to the right shopping segments, in order to help close the gap from the lost time on Thanksgiving Day.”
Stephanie Miles is a senior editor at Street Fight.