For Black Friday weekend, no one expects a retail barnburner — nor will it be anywhere near a turkey.
Evolving forces of nature and consumer dynamics could deliver a better-than-expected outcome, particularly since many retailers entered the fourth quarter with momentum after posting third-quarter gains, though a degree of caution pervades the industry.
“We are excited about the weekend but we don’t expect to see a huge peak and then a complete quiet period after. It will be like last year when there was more continuity,” Fran Horowitz, chief executive officer of Abercrombie & Fitch Co., told WWD on Tuesday.
“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.”
After going mostly virtual last year, 56 percent of consumers are planning to shop in-store, up from 41 percent last year, according to Deloitte’s holiday survey of 4,315 consumers conducted online by an independent research company between Sept. 7 to 14.
At the National Retail Federation, “We’re expecting another record-breaking holiday season this year and Thanksgiving weekend will play a major role as it always has. Nonetheless, consumers are starting earlier than ever to be sure they can get what they want, when they want it, at a price they want to pay. Black Friday stopped being a one-day event years ago, and this year some consumers started shopping for Christmas as early as Halloween,” said Matthew Shay, president and chief executive officer. “NRF is encouraging consumers to shop safe and shop early, but retailers are confident they have enough inventory on hand to meet holiday demand.”
For the three-day Black Friday weekend, the NRF estimates 158.3 million people, up from 156.6 million last year but still below the 165.3 million in pre-pandemic 2019, will be out shopping. That’s according to an NRF and Prosper Insights & Analytics survey of 7,837 adult consumers from Nov. 1 to 10. It has a margin of error of plus or minus 1.1 percent.
The survey found that 30.6 million people plan to shop either in-store or online on Thanksgiving Day; 108 million will shop on Black Friday; 58.1 million on Small Business Saturday; 31.2 million on Sunday, and 62.8 million on Cyber Monday. The total of the daily numbers exceeds the overall figure because some consumers will shop multiple days.
Consumers are preparing for the Thanksgiving weekend with “careful enthusiasm,” according to the International Council of Shopping Centers.
Jeff Gennette, chairman and CEO of Macy’s Inc., is among the more optimistic, believing Black Friday will still be a big volume day, rivaling years past. As far as Black Friday being impacted by all the earlier holiday selling that’s been happening, “I don’t think it’s going to be,” Gennette told WWD. “Black Friday is always kind of an event in itself. I think it’s a pilgrimage and now customers are getting out of the house,” after being cooped in by COVID-19.
“America is going to get out there,” Gennette said. “Black Friday is always this amazing opportunity and Macy’s shows up really well because of our Thanksgiving Day parade.”
Gennette said the real question is how big of a “lull” in shopping occurs after Cyber Monday. Historically, retailers typically saw a huge lull in shopping after Cyber Monday until about 10 days before Christmas when business would rebound. Yet with the earlier holiday shopping of the past two years, the pattern has flattened out.
This year, retailers are confronting supply chain shortages, labor shortages, raging energy increases, and widespread inflation, and are cognizant that consumers are beginning to shift their spending from material goods to experiences such as traveling and dining out more often. Retailers have so far managed to offset all that, reporting solid third-quarter sales and profitability fueled by increased consumer demand, greater full-price selling, and steady increases in foot traffic at stores and malls.
Forecasts for holiday 2021 overall have been bullish, mostly in the high-single digit range. NRF projects holiday sales during November and December will grow between 8.5 percent and 10.5 percent over 2020, to between $843.4 billion and $859 billion. Consumers are expected to spend $997.73 on average.
Mastercard projects U.S. retail sales growing 7.4 percent excluding automotive and gas; Customer Growth Partners sees U.S. retail sales increasing 6.7 percent; AlixPartners projects an increase of 10 to 13 percent over last year’s holiday season, and KPMG expects holiday sales will be 7 percent higher.
Specifically for the Black Friday weekend, several factors work in favor of retailers. Temperatures are dropping, which will perk up seasonal purchases. Many stores, Target, Kohl’s and Macy’s among them, will stay closed Thanksgiving Day for the second year in a row. That pushes business to Black Friday. For about a decade prior to COVID-19, retailers were keeping their stores open on Thanksgiving, dragging Black Friday down.
Meanwhile, in-store traffic has been inching up and up since the fall and back-to-school seasons, when students returned to the classrooms, and offices starting seeing employees return. The ubiquitous reports of supply shortages have consumers spooked they won’t get the gifts they want to buy, so many will come out Black Friday.
The day after Thanksgiving always gets huge traffic and business in stores. But last year there wasn’t the historical, sharp Black Friday spike retailers were long accustomed to due to ongoing consumer caution about the pandemic and retailers launching early holiday campaigns and Black Friday deals, thereby elongating the holiday shopping season and evening out the pattern of shopping.
This season, retailers have been reporting similar earlier shopping, along with greater full-price selling and higher average unit retail prices. Still, there’s been stepped-up promoting this week to get out in front of the Black Friday weekend. Apple, for example, advertised that from Friday to Monday, shoppers will be able to get a $50 gift card upon purchasing an eligible iPhone, iPad, Apple Watch and Mac, among other products. Intermix unleashed a designer sale offering 40 percent off. Pura Vida is running a Black Friday sale Tuesday to Saturday offering 50 percent off site-wide and free shipping, and last Sunday, Lands’ End offered turtlenecks starting at $9, and up to 70 percent off everything else.
“On a national level, sales in seasonal categories are going to be up because it will be cold in the large metropolitan centers, including New York and Chicago,” said Evan Gold, Planalytics executive vice president.
According to Planalytics, temperatures will be colder in the Northeast, Southeast, and Great Lakes region, which will stimulate sales of seasonal apparel, like outerwear, gloves, hats, scarves, blankets fleece, and heaters.
Temperatures in New York during the Black Friday weekend will be in the mid-40s, about 10 degrees colder than last year, according to forecasts. Chicago will be below freezing, around 27 degrees on Black Friday, or 12 degrees colder than last year, and will be one of the coldest markets in the country. However, Los Angeles is expected to be in the mid-60s, about nine degrees warmer than last year, and will be negative in terms of seasonal categories. Casper, Wyoming, and Denver will also be warmer, upper 40s, versus upper 20s last year.
“If you allocate inventory based on what happened last year you will definitely lose” said Gold. “Weather very rarely repeats year-over-year, and there’s more volatility now than there was years ago.”
While there will be rainfall and precipitation, it is not expected to be traffic limiting. Last year, the Thanksgiving/Black Friday weekend was the warmest and driest since 2017, according to Planalytics.
Shoppers are projected to spend an average of $491 over the course of the weekend ahead, according to the ICSC Thanksgiving Intentions Survey conducted online with 1,015 respondents by Engine Insights from Nov. 12 to 14. Key factors for shoppers deciding where they will shop and make purchases over the Thanksgiving weekend include deals and promotions (36 percent); availability of products (31 percent), and variety of products and styles (22 percent).
“The holiday shopping season started early this year and we expect a busy Thanksgiving weekend with consumers looking for gifts and personal items,” commented Tom McGee, ICSC president and CEO. “Black Friday promotions also began early this year and will be front and center throughout the holiday weekend as consumers look for deals and prioritize getting the best price on their purchases.”
ICSC said of those visiting malls and shopping centers this holiday season, 59 percent plan to actually shop the stores; 47 percent will dine at a restaurant; 24 percent will go to a movie, and 15 percent will have a child’s picture taken with Santa.
The NRF survey indicated that 66 percent of holiday shoppers plan to shop the Thanksgiving-Black Friday weekend this year. Among those shopping on Thanksgiving Day, 65 percent are likely to do so in stores, up from 50 percent last year, when worries about COVID-19 were still keeping many people at home. On Black Friday, 64 percent are likely to shop in stores, up from 51 percent last year.
For those shopping during the weekend, deals that are “too good to pass up” remain the top reason, cited by 58 percent, but tradition continued to come in second at 28 percent.
While Thanksgiving weekend will be busy, 61 percent of those surveyed had already begun holiday shopping, close to last year’s 59 percent but up from 51 percent in 2011. The survey found 46 percent started earlier this year than they typically do. While the bulk of shopping may be yet to come, consumers had completed 28 percent of their holiday shopping by early November.
“Shopping early is a trend we’ve seen for years and it began long before the pandemic,” said Phil Rist, Prosper’s executive vice president of strategy. “While some consumers like the thrill of last-minute shopping and others just procrastinate, many prefer the comfort of having the shopping done early so they can relax and enjoy the season.”
Clothing continued to top the shopping gift lists of consumers. Of those surveyed, 53 percent will give gifts of apparel. Forty-six percent will give gift cards; followed by toys at 39 percent; books/music/movies/video games at 35 percent, and food/candy at 31 percent.