As everyone can see from the above linked video, Macy holds an exciting and fascinating Thanksgiving parade every year since 1924. People from all over the world come into New York city to enjoy the parade and kick start their Thanksgiving holiday. Although thousands and thousands people line up around the parade trail, not all of them will go into Macy and make a purchase. Therefore, does Macy benefits from holding a huge event like this?
Cost of Thanksgiving Parade
The turkey may wow you by its gigantic size and colorful feather, the cost behind making this one flow will sure shock you. As told by Tony Michaels, the CEO of an nonprofit parade group, a float can cost from $30,000 up to $100,000. Let us do the calculation here. The 2015 Macy parade has over a thousand performing people, 27 floats, a giant balloon, and other displaces. We assume that each float on average cost $50,000, hourly wage for the performing people is $9, the balloon coast about $30,000, and other displaces worth around $60,000. The total cost adds up to $1,494,000. In conclusion, Macy cost almost 2 million per year to hold the parade.
Macy’s sale is declining
According to Macy’s quarterly report, its sales has been declining. If Macy is doing poorly at sales, why does Macy still spend almost 2 million to hold the event? Will they be better off without the parade, and invest the money into somewhere else?
Advantages of holding the Parade
- Cheaper way to advertise itself to a broad range of consumer.
- Increasing consumers’ awareness of Macy brand.
- Increasing the impulse shopping after parade, and therefore, boosting the sales performance.
- Ways to attract sponsors to help operating the parade.
- Attract new customers.
- Retain loyal customers.
Disadvantages of holding the Parade
- Spent unnecessary money on cleaning the parade trail afterwards.
- Consumers may not go into Macy to shop.
- Huge group of crowd might cause accident.
What is your opinion towards Macy’s Thanksgiving parade? Should Macy keep holding it or drop it to save the money?