Black Friday 2023: Cautious Consumers Seek Value Amidst Economic Concerns
As the holiday shopping season kicks off, a sense of caution is influencing consumer behavior this Black Friday. Experts note that persistent inflation is impacting spending habits,leading shoppers to prioritize value and seek out deals on essential purchases.
According to Robert burn, this ongoing economic pressure “really drags on the consumer.” This sentiment is driving more shoppers to actively look for ways to save on necessary purchases, including holiday gifts. The National Retail Federation (NRF) anticipates a record number of shoppers will participate in sales over the Thanksgiving weekend. The NRF forecasts overall retail sales in November and December will grow between 3.7% and 4.2% compared to the previous year.
NRF chief economist Mark Mathews observes that “people are changing the way that they spend,” focusing on “stretching thier dollar and getting value for the dollar.” This isn’t simply about spending less overall; some consumers are even proactively spending now out of fear that prices will continue to rise due to anticipated inflation.
Brooklyn Farmer, shopping at citadel amidst the crowds, exemplified this approach. “People are struggling right now, but the holidays are still vital to them,” he said, explaining his decision to take advantage of current discounts rather than risk higher prices later.
A Deloitte survey in Los Angeles revealed that 43% of respondents plan to allocate the largest portion of their holiday budget to big-box retailers, while 32% will prioritize digital-first retailers.
Shoppers are also increasingly utilizing new technologies to find the best deals.Data from the Interactive advertising Bureau (IAB) shows that Artificial Intelligence (AI) is now the second-most influential shopping source,surpassing retailers’ websites and apps,and trailing only search engines. The IAB data indicates that nearly 90% of shoppers nationally believe AI helps them discover products they wouldn’t have found otherwise.
Major retailers and manufacturers are responding with notable promotions. Mattel, the El Segundo-based toy company, is offering discounts of up to 50% on Hot Wheels, Barbie dolls, and Disney Princess toys at Target, according to company spokesperson Kelly Powers. Mattel had previously considered raising prices to offset the impact of tariffs imposed during President Trump’s administration,but noted on an October earnings call that the full affect of those tariffs wouldn’t be realized until the fourth quarter.
Performance among discount retailers has been mixed. Walmart recently increased its annual sales forecast following a 6% year-over-year revenue increase in the third quarter. However, Target reported a 1.5% decline in sales during the same period, falling short of analyst expectations. Target Chief Executive Brian cornell acknowledged the company “has not been performing up to its potential” during a recent analyst call.
Despite the economic pressures, the tradition of Black Friday shopping remains important for some. Ericka Pentasuglia brought her daughter to the Americana at Brand at 3 a.m. to secure a spot in line for a pop-up store selling Billie Eilish perfume, emphasizing the value of continuing the tradition with the next generation. “I do feel like it is dying a little bit,” she said, “The best thing is that you don’t lose a tradition, it continues to yoru children.”
