But analysts and industry experts warn that Black Friday sales could be reduced this year. Early and higher sales, beneficial to the strategy buyers – are hurting retailers whose margins suffer from excess inventory and rising labor costs.
Meanwhile, consumers are showing signs of fatigue after struggling with decades-high inflation for much of the year. They got some respite in October: Prices were up 7.7% over the same period a year ago, according to federal data released earlier this month. While still well above normal levels, it was lower than analysts expected. Even the wealthiest Americans are feeling pinched, polls show. They’re still buying, but choosing less expensive options.
Inflation may be stealing Christmas, but shoppers are finding ways around it
“We find ourselves in unique economic situations: Inflation is at a 40-year high and many household budgets are being squeezed from all sides,” said Jie Zhang, a marketing professor at the University of Maryland. “So there’s not as much excitement about opening wallets coming this holiday shopping season.”
Third-quarter financial results, consumer surveys and retail sales data offer a glimpse into how Black Friday could play out. Last week, the Census Bureau reported that retail sales rose 1.3% in October. But much of that spending was on basic necessities like food and gasoline. Americans have also continued to withdraw from technology and home appliances.
These numbers are important to economists and policymakers because consumer spending accounts for more than two-thirds of the US economy. Cooling demand increases fears of a recession. At the same time, the Federal Reserve has been trying to drive prices down by raising interest rates. The job market has remained strong, which has helped consumers keep spending.
In its holiday forecast, the National Retail Federation said sales will rise 6 to 8 percent across all categories and digital purchases will jump 10 to 12 percent. The 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.
The novelty of Black Friday, so called because the surge in sales could change shopkeepers’ books from red to black, has been slowly waning in recent years.
The big shopping day was once synonymous with surprise deals and long pre-dawn lines. Sunil Singh, 61, was looking forward to Black Friday, not only because of the deep discounts on tech gadgets, but also because it meant spending time with his son. The two had a tradition of lining up before dawn outside the Best Buy in the San Francisco Bay Area in anticipation of its opening.
“All that waking up at 4 a.m., standing in line, you know, drinking hot cider and coffee in line, waiting for two hours, chatting with people, it was just a really fun time,” said Singh, of Mountain View, California .
But as her son got older and online shopping became easier and more prolific, there was no need to show up for sales in person.
“The offers, you can get them online,” he said. “You are getting great deals weeks, ten days in advance. So, it’s not that significant anymore.
“It has lost its novelty,” Singh added.
How to survive Christmas shopping
The rise of e-commerce has fragmented the Black Friday shopping experience. Now, retailers are making it easier than ever for people to shop on their websites, apps and in-store, said Harley Finkelstein, president of ecommerce platform Shopify.
“I think Black Friday, Cyber Monday [have] it kind of turned from a weekend into a season,” Finkelstein added. “And I think consumers like it because it means they can make more purchases sooner.”
Shoppers are also increasingly relying on social media: A global survey by the IBM Institute for Business Value, in association with the National Retail Federation, found that 6 out of 10 shoppers get “inspiration and ideas” from TikTok, Instagram, and other sites. The platforms allow for a seamless shopping experience, and with younger demographics spending more time on apps, brands and companies are bringing 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 into the physical store, they often have additional doorbell sales because they’re trying to get traffic,” she said, adding that after years of covid fears and crowd restrictions, shoppers want to get back into the stores. “The pandemic has forced more consumers to realize they want connection and human touch.”