Why retailers still see Black Friday as the high point of the holiday shopping season
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After weeks of plugging increasingly inviting discounts, retailers in the United States and several other countries are preparing for prime time: Black Friday, the bargain bonanza that still reigns as the unofficial kickoff of the holiday shopping season even if it's lost some luster.
Department stores, shopping malls and merchants — big and small — see the day after Thanksgiving as a way to energize shoppers and to get them into physical stores at a time when many gift-seekers are content to do their browsing online. There are enough traditionalists that Black Friday remains the biggest day of the year for retail foot traffic.
“I’m excited about it,” Texas resident Emily Phillips said while visiting the Galleria Dallas last week. “I save up all the things that I want all year and usually try and get them around Black Friday. I prefer to shop in person because then I can try stuff on. It’s a better experience.”
In the U.S., analysts envision a solid holiday shopping season, though perhaps not as robust as last year’s, with many shoppers under financial pressure and cautious with their discretionary spending despite the easing of inflation.
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Retailers will be even more under the gun to get shoppers in to buy early and in bulk since there are five fewer days between Thanksgiving and Christmas this year.
Mall of America, in Bloomington, Minnesota, is giving the first 200 people in line at the center's north entrance a $25 gift card. Target is offering an exclusive book devoted to Taylor Swift's Eras Tour and a bonus edition of her “The Tortured Poets Department: The Anthology” album that only will be available in stores on Black Friday before customers can buy them online starting Saturday.
Best Buy has introduced an extended-release version of the doorbuster, the limited-time daily discounts that for years were all the rage — and sometimes the spark for actual brawls — before the coronavirus pandemic. The nation’s largest consumer electronics chain has released doorbuster deals on its app, online and in stores every Friday since Nov. 8 and plans to continue the weekly promotion through Dec. 20.
“(Stores) are very hungry for Black Friday to do well,” Marshal Cohen, chief retail advisor at market research firm Circana, said. “They recognize that they’re not going to clobber and win big growth in online because the pie has gotten so competitive. They have to find a way to win in the stores.”
Impulse purchases and self-gifting are a potential area for big sales growth, and business isn't going to increase without them, Cohen said. Shoppers are three times more likely to buy on impulse at a physical store than online, according to Circana research.
Shoppers stepped up their spending at American retailers in October, the Commerce Department said. Although sales at auto dealers drove much of the gain, electronics and appliance stores, and bars and restaurants also saw increased purchases, a sign of healthy consumer spending.
The latest quarterly results from Best Buy, Target and other retailers, however, underscored that some will have an easier time than others getting customers to part with their cash.
Walmart, the nation's largest retailer, is heading into the holidays with strong momentum after ratcheting up better-than-expected fiscal third-quarter sales for toys, home goods and groceries. But Target reported sluggish quarterly sales as cautious consumers curtailed their spending on apparel and other non-essential items.
Many retailers pushed holiday sales earlier in October than they did last year to help shoppers spread out their spending.
Shoppers were distracted heading into this month's U.S. presidential election. Sales of general merchandise dropped 9 percent the two weeks ended Nov. 9, according to Circana, but have been rebounding since the election.
The National Retail Federation predicted that shoppers would increase their spending in November and December by between 2.5 percent and 3.5 percent over the same period a year ago. During the 2023 holiday shopping season, spending increased 3.9 percent over 2022.
So far this holiday season, online sales have beaten expectations, according to Adobe Digital Insights, a division of software company Adobe. U.S. consumers spent $77.4 billion online from Nov. 1 to Nov. 24, 9.6 percent more than during the same period last year. Adobe predicted an 8.4 percent increase for the full season.
Despite the early sales, better bargains are coming with Black Friday, according to Adobe. Analysts consider the five-day Black Friday weekend, which includes Cyber Monday, a key barometer of shoppers’ willingness to spend for the rest of the season.
Vivek Pandya, the lead analyst at Adobe Digital Insights, said shoppers are paying more attention to discounts than last year, and their focus on bargain-hunting will drive what sells and when.
For example, Thanksgiving Day is the best time to shop online to get the deepest discount on sporting goods, toys, furniture and appliances, according to Adobe's analysis. But Black Friday is the best time to buy TVs online. People shopping for televisions earlier in the season found discounts that averaged 10.8 percent, while waiting until this Friday is expected to yield 24percent discounts, Adobe Digital Insights said.
Cyber Monday, however, is expected to be the best time to buy clothing and gadgets like phones and computers online. Electronics discounts peaked at 10.9 percent off the suggested manufacturer's price between Nov. 1 and Nov. 24 but are expected to hit 30 percent off on Cyber Monday, Adobe said.
Across the board, Black Friday weekend discounts should peak at 30 percent on Cyber Monday and then go down to around 15 percent, according to Adobe’s research.
For physical stores, the day after Thanksgiving is slated to again mark the busiest single shopping day of the season, according to retail technology company Sensormatic Solutions, which tracks retail foot traffic.
“Black Friday is still an incredibly important day for retailers,” Grant Gustafson, head of retail consulting and analytics at Sensormatic. “It’s important for them to be able to get shoppers into their store to show them that experience of what it’s like to browse and touch and feel items. It also can be a bellwether for retailers on what to expect for the rest of the holiday season.”
Mall of America hopes to surpass the 12,000 shoppers it saw last year within the first hour of its 7 a.m. opening.
“People come to get the deals, but more importantly, they come for the excitement, the energy, the traditions surrounding Black Friday,” Jill Renslow, the mall's chief business development and marketing officer, said.
