Let the shopping games begin.
Deal-hunters headed to their favorite stores in person and online on the day after Thanksgiving to bag what they hope are some of the best early bargains of the year-end holiday period.
So are the start-of-the-season deals enticing enough for shoppers or are they holding out in a cat-and-mouse game with retailers?
Early shopping trends indicate that people were steadily making their way to stores on Black Friday, but not in a frenzy.
Michael Brown, retail industry leader and partner with management consulting firm Kearney, said the much earlier-than-usual jumpstart to holiday sales this year could be to blame.
“Consumers are a little fatigued because the season started as early as October,” said Brown. While foot traffic was “good” into stores, Brown said Black Friday discounts were averaging in the 25% to 30% range.
“Those are the promotion levels that retailers have planned for. This is the opening offer. Shoppers will be holding out for better deals,” he said.
“So far the magic number is 25% off. Consumers are looking for better and aren’t showing a sense of urgency,” said Marshal Cohen, chief retail industry analyst with market research firm Circana.
“It kind of feels like a mid-December shopping day instead of Black Friday,” he said. “Shopping doesn’t mean they are purchasing. People are browsing, looking at the deals.”
One item that is a hot seller: videogame consoles. “Those are selling out quickly,” Cohen said.
Also selling quickly – at least online – are toys, jewelry and clothing, according to data from Adobe Analytics. The Adobe report said Thanksgiving Day online sales hit a record $5.6 billion, up 5.5% from a year ago as people eagerly turned to their mobile phones for deal browsing and buying after their holiday dinner.
Disney Little People, Uno Show No Mercy, Marvel superhero action figures and, no surprise, Barbie dolls were among the most sought-after toy purchases, the report said.
Retailers hope they’ve correctly anticipated the spending capacity of households going into the thick of the 2023 holiday period, whereas shoppers expect their favorite store will pull out all the stops on deals to get them to open up their wallets.
The day after Thanksgiving historically has marked the start of the year-end gift-buying fever leading up to Christmas. The November-December gift-buying months are critical to retailers because the combined period can account for about 20% of their sales for the full year.
Total holiday sales this year are expected to come in softer compared to last year. That’s because consumers have been absorbing a laundry list of pressures all year, including rising prices, a re-start of student loan repayments, and higher interest and mortgage rates.
But retailers also can’t afford to cut prices too deeply and dry up their profits in the all-important year-end quarter. Plus, they’re in much better inventory positions this year versus 2022 with holiday merchandise, meaning they don’t have to set clearance-level deals from the get-go.
At The Shops at La Cantera mall in San Antonio, Texas, the parking lot was gradually filling up late morning.
“We opened at 9 am today, two hours earlier than our usual opening, and on par, traffic looked better than last year,” said Brian Schroeder, senior general manager of the mall, which is one of over 120 mall properties that belong to Brookfield Properties, a subsidiary of Brookfield Asset Management and the second-largest mall operator in the country.
He said there were plenty of 25% off Black Friday deals mall-wide and some deeper 40% off promotions for early-bird shoppers. “There were people lining up to get into stores like Lululemon, Kendra Scott, Nike and Apple,” he said.
While these brands typically don’t heavily slash prices on Black Friday, “they are all very popular with younger shoppers,” he said. “They are going to these stores before they get busy and to see if there’s something they will buy.”
Simon Property Group, the largest mall operator in the country, said Black Friday shoppers at its properties included families and plenty of teens and young adults. It said specialty retailers touted the biggest sales. Aeropostale offered 60% to 70% off and Forever 21 and Aritzia had 50% off discounts for their shoppers.
JCPenney opened up its department stores at 5 am on Black Friday “and I was getting reports of lines outside,” said CEO Marc Rosen.
Rosen said he’s very aware of the financial constraints pressuring Penney’s core shoppers, who have an average household income of $75,000. “Saving money and finding value is very important to them,” he said. “We went into the season knowing that they are facing inflation headwinds.”
He said the retailer is offering thousands of products for under $15 and a special credit promotion that begins on December 1.
“Starting December 1, we’re going to be offering a credit promotion for a single total in-store purchase of $250 or more; we will offer you six months for items charged to the JCPenney card, interest-free charge,” he said. “Customers will be able to pay off in six equal monthly installments. We’re helping our customers with this to take a break from inflation.”
Rosen said he was in Penney stores today and observed how value-priced items were selling well.
“It’s towels for $2.99, our opening pricepoints, small appliances like waffle makers and blenders for $14.99,” he said. “It shows that our customer is really leaning into where they’re finding value. They’re saving their dollars and not necessarily stretching up to what we call the better, best items as much as they used to.”
Contributing: CNN’s Nathaniel Meyersohn
Read the full article here
