Macy’s Holiday Plan: A 48-Hour Brain Fart

The retailer is making a desperate grab for last-minute shoppers

   

I cringed when several American retailers announced the decision to push up Black Friday openings to Thanksgiving.

Macy’s (NYSE:M) latest holiday move just has me scratching my head.

On Thursday, the department store broke the news that it’s planning a good ol’ late-December shopping slumber party. The details can be read in full here, but here are the highlights:

  • 800 of its stores will keep their doors open for a final “One Day Sale” from 7 a.m. Dec. 21 to 7 a.m. Dec. 23. (All stores will then remain open for normal Dec. 23 hours, but the One Day Sale promotion would end at 7 a.m.)
  • Many of those stores will remain open until midnight Dec. 23.
  • “Select stores” will stay open all the way through 6 p.m. Dec. 24.

It’s an aggressive tactic that feels out of character for Macy’s, as opposed to discounters like Walmart (NYSE:WMT) and Target (NYSE:TGT). The plan smells of desperation, and appears to have some holes.

For one, Jonathan Berr points out operational concerns:

“… Keeping stores open for 48 hours straight isn’t going to be cheap. The company has a workforce of about 117,000, many of whom are hourly employees. That means that they would presumably have to be paid overtime for working an overnight shift. Of course, there are other costs to consider, such as heat and electricity. There may be insurance issues to consider as well.”

But another issue comes to mind: Who the heck does Macy’s think it’s bringing in with these hours?

Well, the company’s press release states that it’s targeting “last-minute customers.”

Who else? There shouldn’t be any other shoppers left. The 2012 calendar has set us up with the longest holiday shopping season we can possibly have, not to mention we included Thanksgiving Day itself into the fray. I can’t imagine that of the people with shopping yet to do, many are planning on waiting for the last two or three days before Christmas.

But I can’t help but wonder whether Macy’s and I have very disparate views of what a last-minute customer is.

For it to be worth the extra man-hours and operational costs of keeping all those stores open, you’d imagine Macy’s is dreaming up hordes of every bad males-at-Christmas stereotype you can think of.

“I haven’t bought any of my wife’s 15 gifts this year! Please, sir, your finest personal shopper, and on the double! To the jewelry department we go!”

Maybe those people still exist, but let’s be realistic. If you are a last-minute shopper, it’s more likely that …

  1. You have forgotten an item on a loved one’s list. There’s no sprees, no rifling off a ton of last-minute buys. You missed the fire truck on your son’s list, or the cologne your husband asked for. One item, maybe two. And if you’re in this position, you’re not out strafing stores looking for the best bargains; you need what you need, and (with a nod to JG Wentworth) you need it now. If we’re talking business, Macy’s is unnecessarily killing its margins by offering deals to customers who are in a pinch.
  2. You are shopping for someone on the fringe of your “gift bubble.” Call me jaded. I am. But there are people for whom you want to buy presents, and people for whom you feel you have an obligation to buy presents. It’s not that you don’t care about said people, but they’re right on the cutoff line of your personal who-gets-a-gift list. “Crap. I forgot Second-Aunt So-and-So.” That person is not getting a Michael Kors (NYSE:KORS) handbag; they’re getting a $20 gift card to Olive Garden. And you’re not getting that at Macy’s; you’re getting that at Walmart. Don’t lie to yourself.
  3. You’re a human being. Most humans work in shifts ranging (very roughly) from 8 a.m.-6 p.m., 4 p.m.-2 a.m., or midnight-10 a.m. And you know what every last one of those time frames includes? The ability to make a pre- or post-work stop at Macy’s (or any other store) during regular store hours. Also, before you argue, “But Walmart is open 24 hours,” I’ll remind you that Walmart also can fulfill an emergency 2 a.m. toilet paper run.

Unlike “Black Fridaysgiving,” I have no moral qualms with Macy’s keeping the cash registers running as long as it pleases during this time frame — short of the potential end of life as we know it Dec. 21, there’s nothing hallowed about it.

I just think Macy’s is aggressively pursuing an opportunity that just isn’t there.

Kyle Woodley is the Deputy Managing Editor of InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @IPKyleWoodley.


Article printed from InvestorPlace Media, http://investorplace.com/2012/12/macys-holiday-plan-a-24-hour-brain-fart/.

©2014 InvestorPlace Media, LLC

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