3 Reasons Brick-and-Mortar Retailers are Well Positioned for Black Friday

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October is here and that means so is the start of the holiday season. Some people look forward to the abundance of warm, home-cooked meals. Others can’t wait to catch up with hometown friends and family.  Personally, I always look forward to my family’s annual matching pajama photo – yes, it is possible to fit that much flannel and family embarrassment in one photo… but I digress.

Whatever your traditions are for the holidays, there is one tradition that retailers especially look forward to – the weekend of Black Friday. For ecommerce and physical stores alike, Thanksgiving weekend is a whopper of an opportunity to seize shopper spending dollars. And it’s only getting bigger. RetailMeNot found that Americans plan to spend an average of $743 during the Black Friday to Cyber Monday weekend, up 47% from last year’s average of $505.

With the ongoing growth of ecommerce sales, it seems almost intuitive for retailers to turn their attention to the online presence. But in the age of Amazon, ongoing retail tech innovation and shifting consumer behaviors, retailers should be prioritizing the in-store experience. Don’t believe me? Consider these 3 reasons.

1. Ecommerce  = Slim Profit Margins


Ask any shopper why they buy from Amazon and their answer will most likely contain the words “free shipping.” Amazon has set the bar absurdly high for quick and free shipping and shoppers have come to expect all ecommerce businesses to follow suit.

Considering few businesses have access to a supply chain as sophisticated as Amazon’s, it’s fitting that businesses would consider foregoing this ecommerce sacrosanct. Costs associated with expedited delivery can add up fast.

As tempting as it may be, forfeiting free shipping is the quickest way to drive shoppers off your site and into the arms of Amazon or a close competitor. Ninety-one percent of respondents in a TotalRetail survey say that shoppers are “significantly less likely” or “somewhat less likely” to buy without free shipping.


Ecommerce has a reputation for significantly higher return rates than its brick-and-mortar counterpart – at least 30% of products ordered online are returned, compared to 8.89% in physical store purchases.

Unfortunately for retailers, this online rate of return still applies to Black Friday sales. And because less than half of returned goods are resold at full price, retailers may end up forfeiting 10 percent of their sales at the busiest time of the year.

The sinkhole of foregone profit gets even deeper when we consider shoppers’ expectation to bear no costs when returning items. Yes, that’s right. When purchasing online, free returns play a large role in dictating their consumption – National Retail Federation found that 57% of shoppers backed out of a holiday purchase because they didn’t offer free return shipping.

The proof is in the profit margin. While we have yet to consider the added cost of acquiring customers online (we will leave that for another time), the supply chain cost of fulfilling orders and managing returns is enough to leave businesses with a debilitating profit margin.

The good news? These costs can be avoided when shoppers purchase in brick-and-mortars. To capitalize on higher profit margins during the Thanksgiving weekend, businesses should work to get shoppers in-store to avoid shipping and return costs that are associated with doing business online.

2. Millennials are far from over brick-and-mortar

SURPRISE OF THE CENTURY! Our technology native millennials are shifting their behavior to prefer physical shopping experiences over digital ones. Even more surprising, they are now more likely to buy in-store than baby boomers.

The Northeast region of the U.S. has seen the greatest “behavioral shift” between where the young and old look for deals – twenty-five percent more millennials than baby boomers are visiting multiple stores to find bargains.

Concurrently, of the 154.4 million consumers that shopped or planned to shop over Thanksgiving weekend last year, the largest cohort among them were millennial shoppers.

Considering that the millennial generation is the most likely to shop again this Thanksgiving weekend – and are shifting to prefer the physical store – retailers should be gearing up their brick-and-mortar store experience to meet consumer demand.

3. Black Friday is an opportunity to compete on experience – not on price

You probably wouldn’t be surprised to hear that there is a significant correlation between discounts and Black Friday. Yes, tis’ the season for bargain shopping.

What if I told you that not offering discounts and capitalizing on the in-store experience instead could actually be a way to gain more profitability this holiday season?

Consider this: The online world is dominated by thousands of pop-up promotions and flash sales constantly whizzing past shoppers. In the attention economy, it’s hard to stick out even if you have a killer advertising and promotional strategy.

Furthermore, with price transparency at the click-of-a-mouse, online shoppers are likely to purchase from the business that offers the cheapest products with the fastest, free shipping. (Yes, I’m looking at you Amazon.) This leaves businesses with little opportunity to seize customer loyalty and fighting for shoppers’ dollars through never-ending price cuts.

But even hefty discounts are nothing in the face of the in-store experience. It has become clear that consumers want experiences. Seventy-two percent of millennials prefer to spend their money on experiences instead of material goods. Not to mention, a one-of-a-kind in-store experience is a retailer’s opportunity to stand out from the online discount clutter of Black Friday while also building customer loyalty.

Gaining shopper loyalty is more profitable for businesses long-term (an increase in customer retention can boost your bottom-line profit by 25% to 100%), and in the short-run as well – 86% of buyers will pay more for a better customer experience.

Now, I’m not suggesting that retailers should abandon the ecommerce world all together this Black Friday weekend. An online marketplace is still necessary to fulfill every consumer’s shopping preferences. Rather, I’m suggesting that retailers differentiate themselves and create value through a unique, personable physical store experience. Not only will this drive traffic in-stores, distributing the pain of low-profit margins, but it will create an opportunity to build shopper loyalty, and therefore profitability, far beyond the Thanksgiving holiday.

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