:max_bytes(150000):strip_icc()/GettyImages-523786427-f5d133055c6b475a9d0ec43b65e57d22.jpg "Retailers Hype—and Hope for—a Busy Black Friday This Year")
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Key Takeaways
- Americans are expected to spend some $78 billion between Thanksgiving and Cyber Monday, according to Salesforce, and retailers are jockeying for their business.
- A number of consumers want to spend less on the holidays than last year, but total retail sales are expected to crack $1 trillion for the first time, the National Retail Federation said.
Let the cash registers ring.
Retailers are working hard to beckon Americans on Black Friday, one of the busiest shopping days of the year. Companies are rolling out digital wishlists, running sweepstakes, and setting up elaborate in-store displays. Nordstrom’s flagship Seattle store will feature funhouse-style mirrors and digital palm readings, and Bloomingdale’s will wrap its Manhattan headquarters in a jumbo Burberry scarf.
Millions of Americans are expected to browse and buy between Thanksgiving and Cyber Monday, though many started their holiday shopping early this year. Online sales this Friday may total $18 billion, according to estimates from Salesforce, which provides software to retailers. The five-day “cyber week”—from Thanksgiving to Monday—may bring $78 billion in sales, Salesforce said.
The National Retail Federation expects holiday-season spending to crack $1 trillion for the first time. But the 3.7% to 4.2% year-over-year increase NRF is expecting comes as inflation is trending near 2.7%. and consumer confidence is sliding. Some surveys show Americans aim to spend less this year and, by some accounts, even affluent Americans may be experiencing fatigue.
Why This News Matters to Consumers
Holiday spending is important for retailers, as well as the general economy; consumer spending accounts for some two-thirds of the U.S. economy. How successful the season is has implications for other sectors.
The stakes are high for merchants and brands. About 40% of retail sales are concentrated in the final quarter of the year. Many big-box stores say they’ve been reducing prices on food and other staples—and will be running sales as usual. (Here’s Investopedia’s take on ways to save.)
“We know consumers remain cautious,” Target (TGT) Chief Commercial Officer Rick Gomez said on a conference call this month, according to a transcript made available by AlphaSense. “They want to celebrate with loved ones without overspending.” Urban Outfitters (URBN) Richard Hayne said this week that its customers appeared to be “waiting a bit longer this year to make their purchases until seasonal promotions began.”
Target is rolling out collectibles for kids, and adults, such as Major League Baseball and Women’s National Basketball Association trading cards. It’s also stocking “exclusive” Lego sets and a Barbie inspired by the home decor guru Joanna Gaines, Gomez said.
Many retailers are touting Pokémon drops, from Best Buy (BBY) to Sam’s Club, and otherwise preparing for a jump in web traffic. Dick’s Sporting Goods (DKS) is promoting digital wish lists, it said on a recent conference call, while Kohl’s (KSS) invites users to enter a sweepstakes.
TJX Cos. (TJX) is trying to generate hype by refreshing its merchandise online and in TJMaxx, Marshall’s and HomeGoods stores “multiple times a week throughout the holiday season,” CEO Ernie Hermann said on a conference call this month.
“We believe this differentiates us from many other major retailers as our ever-changing mix of merchandise allows shoppers to see a new assortment every time they visit,” Hermann said.
Others are playing up the unusual nature of new releases—or recently revisited classics. Yum Brands’ (YUM) Taco Bell is teaming up with Abercrombie & Fitch’s (ANF) Hollister on a limited-edition clothing line.
Walmart’s (WMT) Sam’s Club is promoting a more traditional product. “I don’t know if you all know, but Mahjong is the new Pickleball,” CEO Chris Nicholas said on a conference call last month. “Go out and invest in that.”
