Why retailers still consider Black Friday the peak of the holiday shopping season

Why retailers still consider Black Friday the peak of the holiday shopping season

NEW YORK (AP) — After weeks of offering increasingly attractive discounts, retailers in the United States and several other countries are gearing up for prime time: Black Friday, the deal that is still considered the unofficial start of the holiday shopping season, even if In this case, some of the shine has been lost.

Department stores, malls and retailers — big and small — are looking at the day after Thanksgiving as a way to energize shoppers and lure them into physical stores, while many gift seekers are content to browse online. There are plenty of traditionalists who claim that Black Friday is still the biggest day of the year for retail traffic.

“I’m thrilled,” said Emily Phillips of Texas as she visited Galleria Dallas last week. “I save up on all the things I want throughout the year and usually try to get them around Black Friday. I prefer shopping in person because then I can try things on. It’s a better experience.”

In the U.S., analysts are predicting a solid holiday shopping season, although perhaps not as robust as last year, as many shoppers are under financial pressure and are cautious about their discretionary spending despite easing inflation.

With five fewer days between Thanksgiving and Christmas this year, retailers will put even more pressure on getting shoppers to buy early and in bulk.

The Mall of America in Bloomington, Minnesota is giving a $25 gift card to the first 200 people in line at the mall’s north entrance. Target is offering an exclusive book about Taylor Swift’s Eras Tour and a bonus edition of her album The Tortured Poets Department: The Anthology, which will be available in stores only on Black Friday before customers can purchase it online starting Saturday.

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Best Buy has rolled out an expanded version of Door Opener, the limited-time daily discounts that were all the rage for years before the coronavirus pandemic — and sometimes the catalyst for real-life brawls. The country’s largest consumer electronics chain has been releasing great deals every Friday through its app, online and in stores since November 8th and plans to continue the weekly promotion until December 20th.

“(Stores) are very hungry for Black Friday to do well,” said Marschall Cohen, chief retail consultant at market research firm Circana. “They realize that they won’t overspend on online business and will see big gains because the pie has become so competitive. They have to find a way to win in stores.”

Impulse purchases and self-gifting are a potential area for big sales growth, and the business won’t grow without them, Cohen said. According to a study by Circana, shoppers are three times more likely to make a spontaneous purchase in a physical store than online.

Shoppers increased their spending at American retailers in October, according to the Commerce Department. Although sales at auto dealers accounted for much of the increase, electronics and appliance stores as well as bars and restaurants also saw higher purchases, a sign of healthy consumer spending.

But recent quarterly results from Best Buy, Target and other retailers underscore that some retailers will have an easier time than others getting customers to spend their money.

Walmart, the country’s largest retailer, is heading into the holidays with strong momentum after the company reported better-than-expected increases in sales of toys, home goods and groceries in its fiscal third quarter. However, Target reported sluggish quarterly sales as cautious consumers curbed spending on clothing and other non-essential items.

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Many retailers moved October holiday sales earlier than last year to allow shoppers to better spread their spending.

Buyers were distracted ahead of this month’s U.S. presidential election. According to Circana, sales of general merchandise fell 9% in the two weeks ended Nov. 9 but have rebounded since the election.

The National Retail Federation predicted shoppers would increase their spending by 2.5% to 3.5% in November and December compared to the same period last year. During the 2023 holiday shopping season, spending increased 3.9% compared to 2022.

Online sales have exceeded expectations so far this holiday season, 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, up 9.6% from the same period last year. Adobe forecast a full-season increase of 8.4%.

Despite the early sales, Adobe says there are better deals to be had on Black Friday. Analysts view the five-day Black Friday weekend, which includes Cyber ​​Monday, as a key barometer of shoppers’ willingness to spend the rest of the season.

Vivek Pandya, senior analyst at Adobe Digital Insights, said shoppers are paying more attention to discounts than last year and that their focus on bargain hunting will determine what sells and when.

For example, according to Adobe’s analysis, Thanksgiving is the best time to shop online to get the biggest discounts on sporting goods, toys, furniture and home appliances. But Black Friday is the best time to buy TVs online. People who bought a TV early in the season found discounts averaging 10.8%, while waiting until Friday is expected to bring a 24% discount, according to Adobe Digital Insights.

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However, Cyber ​​Monday is expected to be the best time to buy clothes and gadgets such as phones and computers online. According to Adobe, electronics discounts peaked at 10.9% off the manufacturer’s suggested price between November 1 and November 24, and are expected to reach 30% on Cyber ​​Monday.

According to Adobe’s research, Black Friday weekend discounts are expected to peak at 30% on Cyber ​​Monday and then fall to around 15%.

The day after Thanksgiving will once again be the busiest shopping day of the season for physical stores, according to retail technology company Sensormatic Solutions, which tracks retail foot traffic.

“Black Friday is still an incredibly important day for retailers,” said Grant Gustafson, head of retail consulting and analytics at Sensormatic. “It’s important for them to attract customers to their store and give them the experience of browsing and touching and feeling items. It may also be an indication to retailers of what to expect for the rest of the holiday season.”

The Mall of America hopes to surpass the 12,000 visitors it received last year in the first hour of its 7 a.m. opening.

“People come to get the deals, but more importantly, they come for the excitement, energy and traditions surrounding Black Friday,” said Jill Renslow, the mall’s director of business development and marketing.

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