Black Friday, typically the busiest in-store shopping day of the year, is expected to look a lot different this year compared to 2020, when many consumers, trying to avoid exposure to COVID-19, did the bulk of their holiday shopping online — from the safety of their homes.
This year, many families have built up substantial savings, and are eager to partake in holiday traditions that were hallmarks of the season before the pandemic, including flocking to stores the day after Thanksgiving to score deals on gifts and more.
“There is a yearning to get back to a feeling of normal, so in-store shopping is one way to accomplish that,” said Bryan Cannon, the CEO and chief portfolio strategist at Cannon Advisers, who tracks consumer spending and holiday shopping trends.
Some consumers could find the experience distressing, however, as retailers grapple with supply-chain issues and staffing challenges. For the month of November, out-of-stock messages online are up 261% compared to two seasons ago, according to the Adobe Digital Economy Index.
In fact, widespread shipping delays have led many consumers to take advantage of deals in advance of Black Friday to ensure they get their hands on the season’s most in-demand products.
Roughly 70% of shoppers surveyed by consulting firm Deloitte said they had already started their holiday shopping by the last week of October. Eighty percent of early shoppers’ budgets is expected to be spent by the end of the Thanksgiving period.
“As supply-chain challenges continue to snowball, holiday shoppers have quickly realized that a turtle dove in the hand is worth two in the bush,” said Stephen Rogers, executive director of Deloitte Insights Consumer Industry Center. “While spending during the Thanksgiving period will be on the rise, overall participation will be down slightly. Many shoppers have already secured their wish-list items and taken advantage of retailers’ ‘rolling Black Friday’ offers. That said, early holiday shoppers are still set to spend more over Thanksgiving, demonstrating a merry opportunity for both in-store and online retailers.”
Last year’s preference for online shopping has given way to consumer plans to shop both on- and offline. Boston Consulting Group predicts that more consumers will return to stores on Black Friday this year, with 48% saying they prefer a hybrid shopping experience.
Higher prices could put damper on season
Another feature of this year’s shopping season that could frustrate shoppers are higher prices on goods. Toys, clothing, appliances and electronics are expected to cost between 5% and 15% more on average, according to Aurelien Duthoit, senior sector advisor at Allianz Research. TVs will see the highest price spikes on average, up 17% from a year ago, according to the research firm.
In part because of the higher prices, consumer spending levels are expected to break records this season, with the National Retail Federation predicting an increase in sales of between 8.5% and 10.5% compared to the 2020 holiday period.
“I think it is going to be a messy holiday season,” said Neil Saunders, managing director at GlobalData Retail. “It will be a bit frustrating for retailers, consumers and the workers. We are going to see long lines, we are going to see messier stores, we are going to see delays as you collect online orders.”
Retailers that adequately staff up and strike the right balance of enforcing COVID-19 protocols while also creating a stress-free experience for customers will win the holiday, according to one analyst.
“A huge struggle for retailers is going to be matching labor to the demand,” Cannon said. “It’s critical that the retailer gets it right to capture that consumer demand. If they are not abiding by social distancing protocols or masking up or are not making the shopper feel comfortable, you might lose the loyalty of the shopper down the road.”
Some retailers, including Mall of America, the nation’s largest shopping center, have even had to cut their hours, citing staffing challenges. As a result, the center will open two hours later than usual and close one hour earlier on Friday.
“You will find some retailers that do it very well and some retailers will miss the mark completely. You will have winners and losers this holiday season,” Bryan added.
On the whole the holiday is expected to be a lucrative one for retailers. Shoppers’ resilience has been on display so far. Consumers are expected to spend between $5.1 billion and $5.9 billion on Thanksgiving Day, setting a record, according to Adobe Digital Insights.
The Associated Press contributed to this report.
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