REI will close on Black Friday as the retailer urges other stores to do the same. Skipping the biggest shopping day of the year that could cost, but this company wants to try a new strategy, according to Washington Post.
Black Friday is the day when most American retailers push “door busters” earlier and earlier, dragging employees in to open stores on Thanksgiving afternoon. But this year, REI’s 12,000 full and part-time workers will not only have Thanksgiving Day off, they will have this particular day off with pay.
“We think that Black Friday has gotten out of hand,” said Jerry Stritzke, CEO of the chain that specializes in outdoor and fitness gear.
REI’s Black Friday strategy has some investors worrying. Stritzke acknowledged that keeping the chain’s 143 U.S. stores closed will put a dent in revenue.
Stritzke also admits that the day has been among the company’s top 10 sales days in past years. “When you close…on one of the busiest days of the year, it’s going to cost you money,” he said.
About 20% of company sales are made on its website, but the retailer won’t try to lure online shoppers on Black Friday either. Customers will be able to place orders, but its homepage will try to divert buyers with a “cover screen” encouraging them to explore the outdoors instead.
REI isn’t worried that its strategy could be costly. For one thing, it doesn’t have shareholders to mollify because it’s a “consumer co-op.” That means instead of shareholders, REI has member customers who pay a one-time fee and receive an annual dividend — usually equal to about 10% of their purchases that year.
Members account for about 90% of the company’s sales, Stritzke said, and keeping their loyalty means focusing on what they care about.
“This business centers [on] the outdoors,” he said. “Thus, we can do something like close our doors on Black Friday, and we’ll have the membership that’ll think that’s cool.”
Stritzke said that it’s more valuable for REI to bring in new, passionate members than to compete for holiday bargain hunters. “You need people to go to the mountain, you need people to catch that outdoor bug,” Stritzke said.
That mantra has worked for REI. With 5.5 million members, it’s the nation’s largest retail co-op and has seen two years of double-digit growth.
“There is a lot of disruptive forces in retail. I think, doing retail today requires that you have a very crisp view of why your members or customers should come to you,” he said.
Only time will tell if REI’s Black Monday boycott will work, but there’s no doubt that the company will lose sales. Most shoppers don’t mind skipping out on Thanksgiving to find a good deal.