However, analysts and industry experts are warning that Black Friday sales could be subdued this year. Earlier and steeper sales – while strategically advantageous Shoppers – hurting retailers whose margins suffer from oversupply of inventory and rising labor costs.
Meanwhile, consumers are showing signs of fatigue after battling decades of high inflation for most of the year. They got a little breathing space in October, with prices rising 7.7 percent from the same period last year, according to federal data released earlier this month. While still well above normal levels, it was lower than analysts expected. Even wealthier Americans feel constrained, polls show. They still buy, but choose cheaper options.
Inflation could steal Christmas, but shoppers are finding ways around it
“We are in a unique economic situation — inflation was at a 40-year high and many families’ budgets are being squeezed on all fronts,” said Jie Zhang, professor of marketing at the University of Maryland. “So there’s not that much enthusiasm to open wallets coming into this holiday shopping season.”
Third-quarter financial results, consumer surveys, and retail sales data provide a glimpse of how Black Friday could play out. Last week, the Census Bureau reported that retail sales rose 1.3 percent in October. But much of that spending went on necessities like groceries and gas. Americans continued to withdraw on technology and devices.
These numbers are important to economists and policymakers because consumer spending accounts for more than two-thirds of the US economy. Cooling needs raises the specter of recession fears. At the same time, the Federal Reserve is trying to lower prices by raising interest rates. The job market remained strong, which has helped consumers continue to spend.
Black Friday novelty, so named because the sales rush could turn retailers’ books from red to black, has slowly evaporated in recent years.
The big shopping day was once synonymous with door-to-door sales and long lines before dawn. Sunil Singh, 61, used to look forward to Black Friday not only because of the huge discounts on tech, but also because he would be able to spend time with his son. The two had a tradition of queuing before sunrise in front of Best Buy in the San Francisco Bay Area in anticipation of its opening.
“The whole 4 a.m. wake up, standing in line, drinking hot cider and coffee in line, waiting two hours, chatting with people, that was just a really fun time,” said Singh, from Mountain View, California.
But as his son grew up and online shopping became easier and more productive, there was hardly any need to show up to the sale in person.
“You can get the offers online,” he said. “You get such great deals weeks, ten days in advance. So it’s not that meaningful anymore.”
“It’s lost its novelty,” Singh added.
How to Survive Christmas Shopping
The rise of e-commerce fragmented the Black Friday shopping experience. Now retailers are making it easier than ever to shop on their websites, apps and in-store, said Harley Finkelstein, president of e-commerce platform Shopify.
“I think Black Friday, Cyber Monday [have] basically went from a weekend to a season,” added Finkelstein. “And I think consumers like that because it allows them to do their shopping sooner.”
The National Retail Federation estimates that holiday sales will grow 6 to 8 percent in all categories this year and digital purchases will increase by 10 to 12 percent. The average shopper is forecast to spend $832.84 on gifts and holiday items, in line with the 10-year average.
Shoppers are also increasingly relying on social media: a global survey by the IBM Institute for Business Value in partnership with the National Retail Federation found that 6 in 10 Shoppers draw “inspiration and ideas” from TikTok, Instagram, and other sites. The platforms enable a seamless shopping experience from browsing to buying, and as younger demographics spend more time on the apps, brands and companies are bringing their products to them.
But retailers are still scrambling to get people back into stores, said Shawn Grain Carter, a professor at the Fashion Institute of Technology.
“Often when you go into the store, they have extra doorbuster sales because they’re trying to spur traffic,” she said, adding that shoppers are wanting to get back into stores after years of fear and crowd restrictions. “The pandemic has forced more consumers to recognize that they want human connection and contact.”