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HomeMarketBlack Friday Has Lost its Luster. Here’s Why.

Black Friday Has Lost its Luster. Here’s Why.

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Thanks to two years of pandemic-related turmoil, the Black Friday of Christmas present looks a lot different from those of Christamases past.

Gone are the days when bargain-hunters would camp outside of stores at the crack of dawn the day before Thanksgiving.

Today’s shopper looks a lot more like Jeye Dunstan. Dunstan, 62, prefers to shop online, where she can comb through sales and coupon codes to find the best deal. But when it comes to navigating the crowds in brick-and-mortar stores the day after Thanksgiving, “I try not to go there,” the Jersey City resident said. 

“Am I standing in a line to get a deal on a toy? Oh, hell no,” she added.

Black Friday has long been considered the start of the holiday shopping season, and a key gauge of consumer health in the fourth quarter. The day has lost some of its luster in recent years.

Only 20% of consumers said they were planning to shop on Black Friday this year, down from 60% in 2015, according to PriceWaterhouseCoopers, with many of those opting to shop online rather than in stores. Retailers have scaled back their in-store hours, with many choosing to close their doors on Thanksgiving. Outdoor retailer REI took it a step further, announcing it was permanently shutting all stores on Black Friday. 

It’s not that people’s appetite for deals has decreased. On the contrary; rising inflation has driven shoppers to become even more cost-conscious and eager to find the best prices.

But as retailers push holiday sales earlier each year, consumers are getting a jump-start on the holiday, morphing Black Friday into Black November. Companies like
Walmart
(ticker:
WMT
),
Target
(
TGT
), and
Amazon.com
(
AMZN
) offered holiday deals as early as October. The
Macy’s
(M) store in which Barron’s caught up with Dunstan in early November was decked out in lights, baubles, garlands—and a legion of red and black “sale” signs. 

“Black Friday is no longer one day—it’s now become the term for all holiday-centric sales,” said Claire Tassin, retail and e-commerce analyst at Morning Consult. “It’s not really a meaningful, singular event in the way that it used to be.”

This year, retailers have discounted even more aggressively leading up to the weekend to cull the excess inventory that has been weighing on their balance sheets over the last two quarters. That’s been great for consumers, who are starting to feel the pinch of inflation weighing heavily on their wallets.

With holiday deals starting early, Black Friday won’t see the same surge in demand as it saw in the past, said Eddie Capel, CEO of supply-chain solutions company
Manhattan Associates
(
MANH
), as people will have pulled their purchases forward. It also increases the risk of consumers feeling promotion fatigue, meaning that they are less likely to feel a pressing need to shop for deals on Friday. According to consumer research firm Attest, nearly half of consumers think Black Friday Sales should be limited to three days at most.

While the sales event on Friday no longer packs the same punch as it did in previous years, the results from the weekend can still paint a picture on how consumers are balancing spending against inflationary pressures, wrote Seth Bacon, RSM U.S. consumer products senior analyst, in a research note.

The National Retail Federation predicts that a record 166.3 million people are planning to shop during the weekend and through Cyber Monday this year. Many shoppers—about 41%—still believe they’ll find the best deals during the weekend after Thanksgiving, and are waiting to do most of their shopping then, according to PwC.

Just how much those shoppers are going to spend is still a toss-up. A slew of conflicting macroeconomic indicators has made it hard for industry-watchers to draw solid conclusions from what to expect this holiday season, Barron’s reported earlier this week. Black Friday forecasts are no different.

Mastercard
(MA) is predicting that U.S. retail sales will grow by 15% on a yearly basis on Black Friday, excluding auto sales. Attest, on the other hand, found that a little over half of Americans were planning on pulling back on spending. Adobe Analytics estimates that online sales during Cyber Week—the five days from Thanksgiving through Cyber Monday—will rise nearly 3% to $34.8 billion.

The one thing analysts can agree on is that the days of sales-floor stampedes and brawls over televisions are on their way to becoming relics of a bygone era.

“I don’t think anyone wants to go back,” Tassin said.

Write to Sabrina Escobar at sabrina.escobar@barrons.com

Credit: marketwatch.com

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