The annual Black Friday shopping day has
always been about finding the best deals, but this year retailers are
preparing for a US consumer more zealously fixated than ever on getting value
for their money.
Inflation has stabilized after dramatic price spikes during the Covid
pandemic years, but consumers are still feeling the pinch — meaning
bargain-hunting strategies such as grabbing early giveaways and waiting for
last-minute steals are in vogue.
Compared with other years, holiday shoppers in 2024 are “even more
preoccupied and very focused around value and discounts,” said Vivek Pandya,
leading insights analyst at Adobe Digital Insights.
“We do see stronger price sensitivity on the part of the consumer and they
are very responsive to deals and event-tie deals,” he said.
Consumers throughout 2024 have responded to special discount occasions such
as Memorial Day and Amazon’s “Prime Day.”
Black Friday, the unofficial kickoff of the US holiday gift season, comes
the day after Thanksgiving and opens a long commerce-centered weekend that
also includes “Small Business Saturday” and “Cyber Monday.”
In recent years, as inflation has grown as a concern, major chains like
department store Target have been pulling ahead “Black Friday” promotions to
October or even earlier.
Consumer prices on average were 22 percent higher in August 2024 compared
with January 2020, according to Pew Research, and popular discontent with
inflation is one reason Donald Trump won the US presidency in November.
Inflation also continues to guide retailer discounting decisions as they
try to deliver what the market demands.
At Target, shoppers have learned to turn out in force for the chain’s
“Circle Week” savings events held about once every quarter. That translates
into less buying the week before and after, executives said.
After a lengthy period of inflation, “consumers tell us their budgets
remain stretched,” Target CEO Brian Cornell told analysts earlier this month.
“They’re becoming increasingly resourceful in their shopping behaviors,
waiting to buy until (the) last moment of need, focusing on deals and then
stocking up when they find them,” he said.
Incomes ‘edging up’
The National Retail Federation has projected holiday spending growth of
between 2.5 and 3.5 percent in the 2024 season compared with the year-ago
period, to as much as $989 billion over the two-month period.
Economists have pointed to an easing of gasoline prices as a supportive
factor, along with an ebbing in the costs of some food items.
The inflationary environment has weighed especially heavily on households
with lower incomes, with banks pointing to rising charge-off rates as an
indicator of increased stress.
But some chains, such as off-price apparel retailer, Burlington Stores have
pointed to improvement for this cohort of the population. Some of the chain’s
strongest sales have been in stores in low-income zip codes, said Burlington
Chief Executive Michael O’Sullivan.
“Maybe for the first time since 2021, it looks like their real incomes are
finally edging up,” O’Sullivan said on a conference call this week.
Thanksgiving, which is always the fourth Thursday in November, falls on its
latest possible date in 2024. As a result, retailers are pivoting to a season
with five fewer days than last year.
Best Buy launched its Black Friday sale a week ahead of Thanksgiving this
year.
The electronics chain has also brought back “Doorbuster” sales every Friday
this year in stores and online — events many chains had phased out in recent
years because of their association with hordes of waiting crowds that
sometimes resulted in injury.
On Wednesday, Adobe Digital Insights said that online sales through the
first 24 days of the holiday season were up 9.6 percent year-over-year, above
the 8.4 percent growth projected for the entire season.
Pandya, the insights analyst, said the shorter season may be one reason for
the outsized early sales, but that it also reflects how the competitiveness
for online goods that drives down prices.(AFP)