The traditional start to the holiday shopping season may have lost some of its importance for retailers and holds less appeal among deal-savvy consumers.
By Jeffrey Marcus, Forbes Staff
More than half of American shoppers are expected to skip Black Friday, the traditional start of holiday shopping season, but they won’t sit out the holiday frenzy entirely.
“Deal-hungry consumers will play a game of chicken with retailers this year,” Forbes’ senior contributor for luxury retail Pamela Danziger predicts. “They’ll wait till later in the season for retailers to yield and give them even deeper discounts.”
Black Friday has been losing its sizzle for several years as holiday sales now start as early as July and good deals can be scooped up until the last minute, making it trickier for retailers to lure customers on any given day.
Longer holiday promotions, rapidly evolving customer tastes and seemingly relentless consumer anxiety make this retail season one of the most unpredictable in years.
“A significant share of shoppers familiar with Black Friday sales events are skeptical that the discounts offered are genuine,” Danziger said, citing a YouGov survey showing that nearly half of shoppers (49%) said they expect better deals at other times of the year.
“Given the less-than-enthusiastic interest in Black Friday shopping this year, shoppers are likely to wait it out, expecting retailers to make more attractive bargains available later in the season,” Danziger said.
In the past, Black Friday may have been a harbinger of boom or doom. Now, with Christmas in July and Cyber Monday, it’s just another day on the sale calendar.
Still, overall holiday retail sales are estimated to climb more than 3% from last year to $957 billion, the National Retail Federation reports, and seasonal spending could grow as high as $1.6 trillion if you include festive food and beverage, according to ICSC, a trade group of malls and shopping centers.
“Economists have been predicting all year that a spending slowdown was on the horizon, but consumers have turned out to be more resilient than most forecasters expected,” our retail contributor Joan Verdon said, adding: “Most of the early holiday spending forecasts thus far have ranged from cautiously optimistic to upbeat.”
A 3% to 4% bump in holiday sales would push 2023 beyond pre-pandemic spending, according to a recent Deloitte report, and PwC predicts almost 40% of consumers will spend more on gifts, travel and entertainment than they did last year. But 2023 growth in holiday spending is not likely to outpace the 5.3% year-over-year growth seen in 2022.
Value Drives Spending
Rather than settling for straightforward deals offering the lowest prices, many consumers are looking for value, which can mean different things to different people, said Kristen Classi-Zummo, a retail and consumer analyst and Forbes contributor.
“A whopping 41% of consumers emphasize the importance of overall value when choosing where to shop for holiday gifts,” Classi-Zummo said, citing her company Circana’s own research.
Gen Z Wants An Experience
While most holiday shoppers are expected to spread their spending across online and brick-and-mortar stores, younger consumers say they’re looking for holiday cheer IRL.
“For Gen Z, a trip to the mall isn’t just about purchasing gifts; it’s about having an experience that involves the convenience of gathering, shopping, and dining with friends in person,” Kristen Mueller, a Forbes commercial real estate contributor, said. “Savvy decision-makers will need to bridge the gap between this generation’s online and offline shopping behaviors to take advantage of this growing opportunity to earn their loyalty.”
Men And Women Shop Differently
Everyone likes a deal, but research has shown that different offers appeal to different shoppers, and retailers would be wise to take intention into account.
Jenn McMillen, an expert in customer behavior and a Forbes contributor, identified seven different holiday-shopping priorities for men and women that retailers might find instructive. For example, men show greater brand loyalty and women plan further ahead.
“In gift-selling, just like gift-giving, it’s the thought that counts,” McMillen said.
How AI Can Help Shoppers And Retailers
New artificial intelligence applications can help retailers enhance customer experiences and better manage their operations during one of the most crucial times of the year.
“AI optimizes critical operations like demand forecasting, dynamic inventory management and targeted marketing strategies for retailers, leading to increased sales and reduced costs,” said Elijah Clark, a marketing instructor at Texas Christian University and a Forbes contributor.
For customers, AI shopping assistants and deal alerts offer “a new level of convenience and personalization,” Clark said.
Read more from our expert contributors examining the tactics, tastes and technology that will influence the critical final quarter of retail sales in 2023.