Retailers Assess Black Friday's Holiday Impact

What happened

US retailers are preparing to see if Black Friday will benefit from a "holiday halo effect." While Black Friday bargains no longer entice people to leave their Thanksgiving celebrations for midnight shopping sprees, the event continues to draw more shoppers into stores than any other day of the year.

Key facts

• Black Friday is traditionally the kickoff to the holiday shopping season.
• The event still attracts more in-store shoppers than any other day.
• The dynamics of Black Friday shopping have shifted, with fewer people participating in midnight sales.

Background & context

Black Friday has long been considered the unofficial start of the holiday shopping season in the United States. Historically, it has been associated with significant discounts and promotions, drawing large crowds to retail stores. The term "Black Friday" originated in the 1960s, referring to the point when retailers began to turn a profit, or go "into the black." Over the years, the nature of Black Friday has evolved, with many retailers extending sales beyond a single day and incorporating online deals. This shift reflects broader changes in consumer behavior and the retail landscape. The rise of e-commerce has significantly altered how consumers approach Black Friday. Online shopping provides convenience and often comparable discounts without the need to brave crowded stores. This has led to the emergence of "Cyber Monday," a day dedicated to online deals, further extending the shopping frenzy. Retailers now face the challenge of balancing in-store promotions with online strategies to capture consumer interest across multiple platforms.

Why it matters (for US readers)

For US consumers, Black Friday represents an opportunity to take advantage of discounts and begin holiday shopping. It is a key indicator of consumer confidence and spending trends, which can have broader economic implications. Retailers rely on the holiday season for a significant portion of their annual sales, making Black Friday a critical event for their financial performance. The performance of Black Friday can provide insights into the health of the retail sector and consumer spending habits. Strong sales figures may suggest robust consumer confidence, while weaker results could indicate economic uncertainty or shifts in spending priorities. Additionally, the holiday shopping season is a crucial period for employment, with many retailers hiring seasonal workers to manage increased demand.

Stakeholders & viewpoints

Retailers are keenly interested in the outcomes of Black Friday, as it impacts their revenue and inventory strategies. They must carefully plan promotions and stock levels to maximize sales while avoiding excess inventory. Consumers, on the other hand, are looking for the best deals and may be influenced by the convenience of online shopping. The shift away from traditional midnight shopping events reflects changing consumer preferences and the growing importance of e-commerce. Retailers also face competition from online giants like Amazon, which have reshaped consumer expectations around pricing and delivery speed. To remain competitive, brick-and-mortar stores are increasingly adopting omnichannel strategies, integrating online and offline shopping experiences. This includes options like buy-online-pickup-in-store (BOPIS) and enhanced mobile shopping apps.

Timeline & what to watch next

• Monitor consumer turnout and spending levels during Black Friday. This will provide early indicators of the holiday season's overall performance.
• Observe how online sales compare to in-store shopping. The balance between these channels can reveal shifts in consumer preferences and the effectiveness of retailers' digital strategies.
• Watch for retailer reports on holiday season performance. These reports will offer insights into sales trends, inventory management, and consumer behavior.
• Keep an eye on broader economic indicators that may influence consumer spending. Factors such as employment rates, inflation, and consumer confidence can impact holiday shopping patterns.

Sources

US retailers are about to see if Black Friday benefits from a holiday halo effect - AP News