Black Friday isn’t what it used to be

Black Friday was once an iconic celebration of American consumerism. Recently, it has lost some of its thunder.

It’s true that shoppers are looking for deep discounts They can still line up early at Macy’s or Best Buy the day after Thanksgiving, hoping to score a deal. But for many, the deal is already done.

Check your inbox: You’ve been getting emails offering “best prices of the year” for days or weeks as retailers try to outdo each other for your wallet.

“When you think about Black Friday, the competitive landscape has already shifted to Black Friday deals before Black Friday,” Macy’s CEO Jeffrey Gennette told investors on a recent call as he explained why the company is deploying its promotions. “We’re in the middle of it with our competitors.”

This does not mean that Black Friday has lost all its meaning. The days when dozens of customers camped out at big-box retailers or trampled each other in their rush to get cheap TVs may be over, but Black Friday is still shorthand for the shopping frenzy that grips Americans this time every year.

“It’s still a cultural event, but it’s not what it was a few years ago,” said Craig Johnson, founder of retail consulting firm Customer Growth Partners. “It’s not like it used to be.”

Here’s what you need to know about Black Friday shopping.

How did Black Friday come about?

The term “Black Friday” was coined in the 1960s by Philadelphia police officers. The day after Thanksgiving and before the annual Army-Navy football game on Saturday, tourists were storming the city’s retailers and crowds were overwhelming law enforcement.

Retail traders embraced this interest, but the original meaning was lost by many people – who understood the color “black” to be a signal of profits for retailers (compared to red, which signified losses).

Over the decades, thanks to retail promotions, the sport became a staple on the national calendar, ultimately defined by long lines, unruly crowds and occasional injuries. As stores sought to compete for shoppers, they extended their hours — first until dawn on Friday, then until midnight, then until Thanksgiving night.

The trend, which has faced backlash from retail workers, began to wane a few years ago. Many retailers are now careful to remain closed on Thanksgiving.

In the past 20 years or so, Black Friday sales have also spread internationally, said Dale Rogers, a business professor at Arizona State University. “It started out as a little American thing,” he said. “Now it’s really global.”

Sales now start well before Friday.

Retailers slowly started offering sales earlier, and now deals can be found as early as October, Mr. Hans said. Johnson, retail consultant.

“If you’re a retailer, you don’t want to attract demand by cutting prices so low that you can’t make money,” he said. “The way most people capture demand is by targeting early demand.”

Consumers spent 5% more online in the first 20 days of November than they did in the same period last year, according to Adobe Analytics.

Many retailers say spending at the other end of the holiday shopping calendar, in the days closer to Christmas, is more important as people rush to get last-minute gifts.

For example, Barnes & Noble sells more than 20 million books in December alone, and the seven days before Christmas represent 20 times the average week’s sales. In 2022, on Christmas Eve and the Saturday before Christmas It was the busiest days for dollar storesAccording to market research company Placer.ai.

Mr. Johnson said his company expects Black Friday to be the third busiest day for retailers this year, after December 13. December 23 and December 16, the last two Saturdays before Christmas.

What do retailers say about holiday shopping?

Businesses have spent much of the past year celebrating the surprisingly resilient consumer who has continued to spend despite inflation and rising interest rates.

But there are signs that this is starting to change. Last quarter, several executives told analysts that shoppers were starting to pull back.

The Federal Reserve rapidly raised interest rates starting in March 2022 in an attempt to slow the economy and curb inflation. Although the rate of price increases has declined significantly, the overall price increase is beginning to affect consumers, limiting the amount of discretionary income available to them.

“Consumers are feeling the weight of multiple economic pressures, and discretionary retail has borne the brunt of that weight for several quarters now,” Christina Hennington, Target’s chief growth officer, told analysts on a recent earnings call.

Analysts expect that this does not necessarily mean that consumers will not attend, but that they will be more likely to take advantage of promotions and less likely to make large purchases such as furniture or some electronic devices.

Best Buy CEO Cori Barry told analysts on an earnings call Tuesday that the company is “preparing for a very deal-focused customer” and expects sales to focus on days like Black Friday, Cyber ​​Monday and the days right before Christmas.

The National Retail Federation, an industry trade group, expects holiday sales to increase 3 to 4 percent from last year, which is in line with pre-pandemic levels but not at the same level as the past two years. Holiday sales rose 5.3 percent in 2022 and 12.7 percent in 2021.