As retailers look to the 2022 holiday shopping season, is Black Friday still a big deal?
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Is Black Friday still a big deal?
As people feel the pinch of inflated prices, shoppers are expected to consider major cutbacks on buying holiday items in excess, splurging on expensive gifts and taking trips that require extra money on hotels or gas. In this special report, we look at what you can expect from the 2022 holiday shopping season, and also provide you with guides to Triangle malls and major stores.
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As retailers look to the 2022 holiday shopping season, is Black Friday still a big deal?
Ready, set, shop. Your Black Friday shopping guide to Triangle malls and major stores
Why do we call our biggest retail holiday Black Friday? Here is the origin of the name.
What Triangle grocery stores are open and closed on Thanksgiving Day? Here’s a list.
For local business owner Alan Gill, Black Friday is a thrilling time of year. His team at Ultimate Comics stocks shelves with Funko Pops and Marvel classics as the warehouse fills up with boxes of the latest graphic novels, all in preparation to welcome shoppers first thing the morning after Thanksgiving.
But the pandemic has changed people’s shopping habits and willingness to deal with crowds. And as online retail continues to boom and Americans attempt to stretch their dollars in the face of inflation, many are left wondering: Is traditional Black Friday shopping still relevant?
Experts and retailers alike said the experience and desire for in-person shopping is hard to replace.
This year, the National Retail Federation estimates that a record 166.3 million people are expected to shop from Thanksgiving Day to Cyber Monday in-person and online. That’s 8 million more people than last year, when holiday shopping began to feel more familiar with the increase of COVID-19 vaccinations and more retailers opening their doors. It’s also the highest estimate since 2017, when the federation started monitoring the data.
For businesses like Ultimate Comics, the answer to Black Friday’s relevance is a resounding “yes.” He said he is excited to kick off the holiday shopping season in-person.
He has owned and operated Ultimate Comics for the past 20 years, with locations in Raleigh, Durham and Cary. In 2021, he opened a pop-up store in Crabtree Valley Mall to nearly instant success, given that a strong portion of Gill’s sales come from in-person purchases.
“Starting on Black Friday and going through the holiday (last year), it was insane, and we have continued to have great numbers in the mall,” Gill said. “So I’m real optimistic.”
Like Gill, retailers of all sizes have been gearing up for Black Friday, which the National Retail Federation says is the busiest shopping day of the year, by rolling out their marketing campaigns and deals to attract people to their stores and e-commerce sites.
Ever since the COVID-19 pandemic upended the traditional flow of consumerism at the end of the year, experts predict people will still try their best to indulge in the joy of holiday shopping and experiences throughout the shopping weekend, which includes Black Friday, Small Business Saturday and Cyber Monday.
Still, experts add, this year’s holiday season may look different for many shoppers and store owners. As people feel the pinch of inflated prices, shoppers are expected to consider major cutbacks on buying holiday items in excess, splurging on expensive gifts and taking trips that require extra money on hotels or gas.
“I think you have all these factors that are weighing on consumer spending and it may logically lead people to maybe be a bit more restrained in what they spend this season,” said John Quinterno, a finance professor at Duke University.
Black Friday is a day steeped in tradition
Inboxes and mailboxes are filled with advertisements for the newest sales and deals for hot-ticket items, toys or decorations in the week leading up to Thanksgiving and Black Friday.
Most retailers have adapted to the trends of consumers and, in recent years, have extended their Black Friday sales through the entire week, continuing on to Cyber Monday after the Thanksgiving holiday.
Typically, the five days after Thanksgiving are the busiest days for shopping, both in person and online, according to the National Retail Federation. Of those days, Black Friday is still tops for shopping by far, with 69% of consumers planning to shop then, the Federation reports, followed by 38% on Cyber Monday.
“Black Friday is one of those interesting things where it’s both about the bargains but also about the experience,” said Connel Fullenkamp, an economics professor at Duke. “The fun of going out with the crowd and experiencing that collective thrill of searching for that bargain or who gets that really cheap TV. I can certainly identify with that.”
Fullenkamp said people enjoy the ritual of shopping on Black Friday, which has become a tradition steeped in American culture.
In 2019, before the pandemic, an estimated 84.2 million people were out shopping on Black Friday, and online sales made up a third of sales. This era was different, of course, with big box stores opening at midnight on Black Friday and remaining so for the entire day.
But for the third year in a row, major retailers like Walmart, Bed Bath & Beyond, Costco, and REI, along with many local stores, will be closed on Thanksgiving. Even fewer will be opening extra early the day after.
Tonya Council, the owner of local bakery Tonya’s Cookies at Crabtree Valley Mall, agrees that the bustling malls and shopping centers, the glimmer of Christmas decorations and the thrill of a good deal all contribute to the adventure of Black Friday, she said.
“I think that it’s going to be about the same as every year. Of course we always have a lot of people come in and they clean out our gift baskets,” she said with a laugh.
Experts say the average consumer’s confidence has increased this year, and people are going to find ways to celebrate the holidays, even with tighter budgets. Shoppers are prioritizing experiences in addition to gift buying, according to Deloitte.
Between November and December, holiday sales will grow between 6% and 8% over 2021 to between $942.6 billion and $960.4 billion, the National Retail Federation reports.
On average, holiday sales have had a 4.9% increase over the past 10 years, “with pandemic spending in recent years accounting for considerable gains,” according to the Federation.
But retail experts also predict that consumers plan to scale back on the number of items they will buy to stretch their finances and predict Americans will buy about nine gifts and gift cards, versus 16 in total last year.
For independent business owners like Council, Black Friday can be a way to show off progress to customers. Since last year’s holiday season, which arrived as her cookies got a big boost from being named to Oprah Winfrey’s Favorite Things list, Tonya’s Cookies has moved to a new location at Crabtree. She said it “looks more boutique-like,” and is lined with “big, pretty glass windows.”
Holiday shopping will give her the opportunity to show customers that their support helped her shop grow.
“I feel like COVID made people realize that the holiday season is about going out and buying things,” Council said. “To me, the Christmas spirit is walking and touching and feeling and, you know, seeing other people walk around with their kids and everybody’s Christmas shopping.”
Online shopping trends
For those who prefer to avoid long lines and crowds, online shopping has become a favored method of picking up gifts.
The convenience of online shopping is prevailing over in-store buying, according to a 2022 Deloitte report on holiday retail trends, with 56% of shoppers planning to buy items using just their smartphones. On average, $934 is spent online, compared to less than $500 in the store, the Deloitte report says.
More than half of consumers plan to make their holiday purchases online, according to the NRF. Online sales soared in the first year of the pandemic and online searching still remains the most popular way to track down holiday deals.
Fifty-six percent of online shoppers is about the same as the number of people who made most purchases online last year. This avenue is the most popular, compared to department stores, grocery, local, clothing or craft stores, the retail federation reports.
For many business owners in the Triangle, like Council, online business has been a guiding light toward growth. Being named to Winfrey’s coveted list ushered in a flood of online sales. But with the opening of a new store location, Council said her business is evenly balanced between online and in-person sales.
“I have to say, for the holiday season, it’s probably about 50-50,” Council said.
Inflation and decreased buying power
The holidays come with excitement and positive emotions, compelling some people to take risks during the holidays, according to Camelia Kuhnen, a finance professor at UNC-Chapel Hill who studies consumers’ behaviors and financial decisions.
“This can certainly lead to overspending during the holiday season,” Kuhnen said.
Kuhnen said the holidays will always be a time when people rely more on savings or credit cards to spend more money.
She said “present-bias” can explain the pressures people might feel around the holidays to spend more to keep up with trends or status even though they are overextending themselves.
“It’s a human thing,” she said. “Humanity does this, and I would conjecture it is even more powerful during the holiday season because you see everybody rushing to the store and coming back with gifts and you want to do the same.”
Inflation is a broad measure of how much more expensive goods and services have become over a certain period of time. To combat the issue this year, the Federal Reserve has been raising interest rates for months to curb inflation. Currently, the rate is about 7%, and some economists predict it to fall to about 3% by next year.
“If you look at some objective facts about the financial health of American households, a lot of people are doing decently well,” Kuhnen said. Some industries like food and retail have increased their wages during the pandemic, some up to between $12 and $15 an hour.
At the end of 2021, 78% of adults were “doing at least OK” financially, according to a report by the Federal Reserve. But Fullenkamp questioned if that was enough to convince people to go all-out at the holidays.
“People would be more comfortable if their wages and salaries were keeping up with inflation,” he said. “We’ve had inflation a little bit above 8% and so far this year, wages have gone up by 5% and the rough rule of thumb is you’ve lost 3% of your purchasing power. Which a lot of us feel.”
That could explain some of the cutbacks on spending for the holidays.
About 43% of consumers surveyed by the NRF said they don’t earn enough money to cover the costs of gifts and other holiday items this year.
In a report by Deloitte, 73% of shoppers said they predict prices to be higher this season.
Fewer employees but a positive outlook
The holiday shopping rush is something to look forward to, regardless of whether people plan to spend money or not, said N.C. Central University economics professor Abm Nasir. Raising interest rates has been positive but Nasir said this tactic is only a short-term fix.
And experts believe the thrill of being with family and friends, creating memories and exchanging gifts is part of the resilience of consumers in the face of financial uncertainties.
“This is what consumers do, everywhere,” Nasir said. “When consumers feel the pinch of something, they end up not cutting back on their festival spending, especially Christmas and Thanksgiving. There is a value there. People have pleasure from engaging themselves in the festivities. Entertainment never stops.”
That doesn’t come without challenges for retailers, many of whom have struggled to hire employees or staff stores in the hours they kept once before.
Council said hiring has been particularly difficult this year. Typically, her store requires 12 employees during the holiday season. This year, she is making do with eight. She said she has even resorted to recruiting family members to help fill the gap.
Still, Council is confident that her team will be able to fulfill all their orders and assist customers in the store.
Similarly, Gill is confident about reaching customers this holiday season and giving them a good experience.
“I believe people want to get out,” Gill said. “I think parents want to bring their kids to the mall to have them sit on Santa’s lap, because they haven’t been able to do that for the past three years. And I think it’s going to be strong. I think it’s going to be people wanting to come back in person.”
This story was originally published November 22, 2022 at 6:00 AM.