But analysts and industry experts warn that Black Friday sales could be muted this year. Earlier and steeper sales — and at the same time advantageous for strategic shoppers – hurting retailers whose margins are suffering from excess inventory and rising labor costs.
Meanwhile, consumers are showing signs of fatigue after dealing with decades-high inflation for most of the year. They got a bit of a reprieve in October: Prices rose 7.7 percent from a year ago, according to federal data released earlier this month. Although still well above normal levels, it was lower than analysts had expected. Polls show that even wealthier Americans are feeling the pinch. They still shop, but choose cheaper options.
Inflation could steal Christmas, but shoppers are finding ways around it
“We are in a unique economic situation — inflation is at a 40-year high and many families’ budgets are being squeezed on all fronts,” said Jie Zhang, a marketing professor at the University of Maryland. “So there’s not as much enthusiasm to open wallets this Christmas shopping season.”
Third-quarter financial results, consumer surveys and retail sales data offer a glimpse of what Black Friday might look like. Last week, the Census Bureau reported that retail sales rose 1.3 percent in October. But much of that spending was on necessities like food and gas. The Americans also continued to download technology and equipment.
These numbers are important to economists and policymakers because consumer spending makes up more than two-thirds of the U.S. economy. Cooling demand raises fears of a recession. At the same time, the Federal Reserve attempted to lower prices by raising interest rates. The labor market remained strong, which helped consumers continue to spend.
In its holiday forecast, the National Retail Federation said sales will rise 6 to 8 percent across all categories and digital purchases will climb 10 to 12 percent. Estimates are not adjusted for inflation. The average shopper will spend $832.84 on gifts and holiday items, the NRF said, which is in line with the 10-year average.
Over the past few years, the Black Friday novelty, which got its name because a rush of sales could turn traders’ books from the red to the black, has slowly dwindled.
The big shopping day was once synonymous with door-to-door sales and long pre-dawn lines. Sunil Singh, 61, was looking forward to Black Friday – not just because of steep discounts on tech gadgets, but also because it meant spending time with his son. The two had a tradition of lining up before sunrise outside Best Buy in the San Francisco Bay Area in anticipation of its opening.
“The whole thing of waking up at 4 a.m., standing in line, drinking hot cider and coffee in line, waiting for two hours, chatting with people, it was really fun,” said Singh, of Mountain View, California. .
But when his son grew up and online shopping became easier and more fruitful, there was no need to show up in person.
“Those deals, you can get them online,” he said. “So you get great deals weeks, ten days in advance. So it doesn’t make much sense anymore.”
“It has lost its novelty,” Singh added.
How to survive Christmas shopping
The rise of e-commerce has disrupted the Black Friday shopping experience. Now, retailers are making it easier than ever for people to shop on their websites, apps and stores, said Harley Finkelstein, president of e-commerce platform Shopify.
“I think Black Friday, Cyber Monday. [have] it kind of grew from a weekend to a season,” added Finkelstein. “And I think consumers like that because it means they can shop earlier.”
Shoppers are also increasingly dependent on social media: A global survey by the IBM Institute for Business Value in partnership with the National Retail Federation found that 6 out of 10 shoppers draw “inspiration and ideas” from TikTok, Instagram and other sites. Platforms enable seamless shopping by browsing to buy, and younger demographics are spending more time with apps, brands and companies that bring their products to them.
But retailers are still making moves to get people back into stores, said Shawn Grain Carter, a professor at the Fashion Institute of Technology.
“If you go to a brick-and-mortar store, they often have extra sales because they’re trying to manage traffic,” she said, adding that after years of covid concerns and crowd restrictions, customers are eager to return to stores. “The pandemic has forced more consumers to realize that they want human connection and contact.”