Black Friday, once the pinnacle of holiday shopping, is undergoing a significant transformation in 2023. Traditionally a day of frenzied in-store shopping following Thanksgiving, this year’s Black Friday presents a more relaxed atmosphere. The evolution of shopping habits, primarily driven by online platforms, has diluted the once-exclusive nature of Black Friday deals.
- Many retailers have extended Black Friday sales, starting weeks in advance.
- The National Retail Federation predicts a 4% increase in holiday sales, slightly slower than the previous year’s 5.4%.
- Marshal Cohen of Circana notes a shift in consumer behavior, with less emphasis on in-store “doorbuster” deals and more focus on online value hunting.
Consumer Spending Trends and Preferences
Despite the changing landscape of Black Friday, overall holiday retail sales are expected to grow. The National Retail Federation forecasts a more than 3% increase from last year, potentially reaching $957 billion. This growth includes festive food and beverage, pushing total spending to as high as $1.6 trillion.
- Experts like Joan Verdon comment on the resilience of consumers, with spending forecasts ranging from cautiously optimistic to upbeat.
- Deloitte’s report suggests a 3% to 4% bump in holiday sales, surpassing pre-pandemic levels.
- PwC predicts almost 40% of consumers will spend more on gifts, travel, and entertainment compared to last year.
Value and Experience in Shopping
Consumers are increasingly seeking value in their purchases, which translates differently across demographics. Kristen Classi-Zummo points out that 41% of consumers emphasize overall value in their holiday shopping decisions.
- Gen Z shoppers are inclined towards experiential shopping, preferring in-person activities combining shopping, dining, and socializing.
- Men and women exhibit different shopping priorities, with men showing greater brand loyalty and women planning further ahead.
Impact of Artificial Intelligence in Retail
The integration of AI in the retail sector is reshaping the shopping experience and operational efficiency. AI-driven tools are aiding in demand forecasting, inventory management, and targeted marketing, benefiting both retailers and consumers.
- Elijah Clark highlights AI’s role in enhancing customer experience and optimizing retail operations.
- AI shopping assistants and deal alerts offer convenience and personalization for shoppers.
Retailers’ Strategic Responses
Retailers are adapting their strategies in response to these trends. Adam Davis from Wells Fargo notes a tug-of-war between retailers and consumers. Retailers are balancing inventory management and promotions to maintain profit margins while meeting consumer expectations for deals.
- Retailers might be less promotional this year, given tighter inventory control.
- Despite less aggressive discounting, significant bargains are still expected, particularly in clothing, shoes, and certain toys.
- Julie Ramhold advises caution in purchasing toys on Black Friday, suggesting better deals closer to Christmas.
Consumer Adaptation to New Shopping Norms
Consumers, now more than ever, are exhibiting adaptability in their shopping habits. The shift from a single-day event to a prolonged period of deals has changed the way people approach holiday shopping. This change is a direct response to the evolving retail landscape, where online shopping plays a pivotal role.
- Online platforms have made value hunting more accessible and convenient, changing the traditional early morning rush to stores on Black Friday.
- With deals spreading across November and December, consumers are more strategically planning their purchases to maximize savings.
- However, this extended sales period can also lead to ‘sales fatigue’, where constant exposure to deals diminishes their perceived value.
The 2023 holiday shopping season reflects a nuanced landscape where Black Friday is no longer the sole focus. With a blend of in-store and online shopping preferences, consumers are seeking value and experiences, while retailers adapt to these changes with strategic pricing and promotions. The integration of AI technology further adds to this dynamic, offering new opportunities for personalized shopping and efficient retail operations.
For a deeper dive into these trends, read more from our expert contributors here.