Retailers offer big deals for Black Friday but will shoppers spend?

14

Retailers are gearing up for Black Friday with enticing discounts and offers, but there are concerns about whether shoppers will open their wallets generously this year. Consumers are feeling the pinch as their savings diminish and credit card debts mount. While there has been some relief from easing inflation, the cost of essential goods and services like meat and rent remains significantly higher than it was just three years ago.

Barbara Lindquist, an 85-year-old resident of Hawthorne Woods, Illinois, plans to spend approximately $1,000 on holiday gifts for her extended family, a figure similar to last year. However, she is prioritizing value, particularly in the face of elevated prices for items like meat. She intends to buy more gift cards as a strategy to stay within her budget.

Many retailers have taken preemptive measures for this holiday season, ordering fewer goods and starting holiday sales earlier in October compared to the previous year. This shift towards early shopping gained momentum during the pandemic when supply chain disruptions in 2021 prompted consumers to shop ahead of time to secure desired items.

Retailers are anticipating that shoppers will be more deal-focused and may delay their purchases until the last minute. Best Buy is emphasizing items at opening price points, while Kohl’s has streamlined its deals, highlighting products below a specific price point, such as $25.

Target reports that shoppers are waiting longer to make purchases, for instance, postponing the purchase of sweatshirts or denim until the weather gets colder. While consumers have demonstrated resilience, they are also mindful of uncertainties, cautious in their spending, and keen on budget management, according to Target’s CEO, Brian Cornell.

The National Retail Federation, the largest retail trade group in the United States, expects higher holiday spending compared to the previous year, although the pace of growth is anticipated to slow due to economic uncertainties. They project a 3% to 4% increase in U.S. holiday sales for November through December, compared to a 5.4% growth in the previous year.

Online discounts are expected to be more attractive this year, particularly for toys, electronics, and clothing, according to Adobe Analytics. Discounts on toys are predicted to average 35%, up from 22% the previous year, while electronics should see 30% reductions, compared to 27% last year. In the clothing category, shoppers can expect an average discount of 25%, compared to 19% in the previous year.

Industry analysts consider the five-day Black Friday weekend, including Cyber Monday, as a crucial indicator of consumer spending willingness. Black Friday is anticipated to once again be the busiest shopping day of the year, with the top 10 busiest shopping days expected to account for roughly 40% of all holiday retail traffic, according to Sensormatic Solutions, a store traffic tracking firm.

Marshal Cohen, Chief Retail Adviser at Circana, a market research firm, predicts that shoppers will stick to their lists and avoid impulsive purchases. He also believes that consumers will spread their purchases throughout the holiday season, reflecting a lack of urgency and a preference for shopping at their convenience.

Frequently Asked Questions (FAQs) about Black Friday Shopping Trends

More about Black Friday Shopping Trends

• National Retail Federation
• Adobe Analytics
• Sensormatic Solutions
• Circana