American retailers are providing major discounts for Black Friday, but the question remains: Will consumers actually make purchases?
NEW YORK —
Anticipate significant price reductions and additional incentives to attract customers to brick-and-mortar stores on Black Friday. However, merchants are concerned that these tactics may not be sufficient.
Customers are facing increased stress as their savings decrease and their credit card debt increases. While inflation has eased slightly, the costs of goods and services such as meat and rent remain significantly higher compared to three years ago.
Barbara Lindquist, a resident of Hawthorne Woods, Illinois and 85 years old, shared that she and her husband intend to allocate approximately $1,000 for presents this holiday season for their three grown children, 13 grandchildren, and three great-grandchildren. This amount is consistent with what they spent last year.
However, Lindquist, who remains employed as a pre-school teacher at a nearby church, stated that she will prioritize finding bargains due to the ongoing high costs of meat and essential items. Additionally, she intends to purchase more gift cards as a strategy to adhere to her budget.
Lindquist stated that she prioritizes finding good deals. She recently purchased sheets and towels at a discounted price from Kohl’s for her friends who will be coming to visit from Panama during the holiday season.
Several merchants had reduced their orders for the upcoming holiday season and have shifted their holiday sales to October, compared to the previous year, in order to assist customers in managing their expenses. This early shopping approach seems to have become more prevalent during the pandemic, as disruptions in the supply chain led to individuals purchasing items earlier out of concern for potential shortages.
According to retailers, shoppers will be prioritizing bargains and may delay their purchases until the final moments. Best Buy stated that they are emphasizing lower-priced items, while Kohl’s has streamlined their promotions by highlighting products under $25 in their stores.
According to Target, customers are delaying their purchases. For instance, instead of buying sweatshirts or denim in August or September, they waited until the weather got colder.
Target’s CEO Brian Cornell stated to analysts last week that it is evident that consumers have displayed impressive resilience. However, according to our research, issues such as uncertainty, caution, and budget management are the primary concerns.
The largest retail trade group in the nation, the National Retail Federation, predicts that shoppers will spend more money this year compared to last year. However, due to economic uncertainty, their spending rate is expected to decrease.
The group predicts that holiday sales in the U.S. will increase by 3% to 4% during November and December, which is lower than the 5.4% growth seen last year. This aligns with the average yearly increase of 3.6% from 2010 to 2019 before the pandemic. Due to increased spending during the pandemic and limited options for activities, Americans had more disposable income from government aid and spent more during the holiday season of 2021, with sales increasing by 12.7%.
Adobe Analytics reports that online discounts this year are expected to be more advantageous than those of the previous year, specifically for toys, electronics, and clothing. The projected average discount for toys is 35%, a significant increase from last year’s 22%. Electronics are expected to have a 30% decrease, compared to a 27% decrease last year. Shoppers can also expect an average discount of 25% on clothing, an increase from last year’s 19%, according to Adobe.
Experts view the five-day period of Black Friday weekend, including Cyber Monday, as an important indicator of consumer spending. According to Sensormatic Solutions, the busiest shopping day of the year is expected to be Black Friday, with the top 10 busiest days accounting for approximately 40% of holiday retail traffic in the U.S.
According to Marshal Cohen, the primary retail consultant at Circana, a company specializing in market analysis, it is expected that customers will adhere to a planned shopping list and refrain from making impulsive purchases. Additionally, he predicts that they will spread out their purchases throughout the holiday season.
Cohen stated that there is a lack of urgency among consumers. They are expressing that they will shop at their own convenience.