Businesses getting ahead of Black Friday send soft economic signals
22 Nov 2023 --- Black Friday is famous for its blockbuster deals as consumers hunt for bargain-basement sales one day after Thanksgiving. Traditionally an American holiday, shoppers worldwide now embrace the Black Friday phenomenon.
However, many buyers are not waiting for Friday’s deep discounts this year as the so-called “holiday creep” sets in. That’s when companies slash prices ahead of Black Friday to lure customers and extend the holiday shopping season.
“Holiday creep” ahead of Thanksgiving
Data from Adobe Analytics suggests discounts in October were much higher last month versus previous years. That could be a sign that businesses are holding on to more inventory as customers are more cautious about spending, which could also spill over to the critical Black Friday shopping season.
Researchers at Morgan Stanley also believe consumers are looking for 30% discounts on holiday shopping before they entertain placing items in their shopping carts in stores and online.
Consumer spending softened in October
Data from the US Commerce Department backs up fears that consumers are facing pressure. As Americans pulled back on retail spending, retail sales dropped 0.1% in October. That is in contrast to the six straight months of gains posted ahead of October, although the decline was partly driven by falling prices for both gasoline and cars.
While the summer was hot, economists believe the year’s final three months will cool spending habits as consumers reconcile with credit card debt and inflationary pressures.
Hugo Erken is the head of economics for Rabobank. He tells Personal Care Insights that he expects “consumers will definitely keep a close eye on Black Friday for bargains (against the backdrop of still high-experienced instead of official inflation figures).” Still, he does not expect people to skip shopping altogether this holiday season, pointing to a mild recession and a labor market he says is holding up well.
Many shoppers are not waiting for Black Friday discounts as the “holiday creep” takes hold.
Black Friday beauty message
While companies and consumers focus on blockbuster deals, Lush Cosmetics takes a slightly different approach. Continuing with its “Big Tech Rebellion,” the UK-based brand, known for mixing politics and beauty products, is launching “The Cloud” bath bomb.
It says 100% of the sales price (minus the tax) will go to a movement called “People vs Big Tech,” which aims to rein in what it sees as a handful of big technology companies monopolizing the Internet with “intrusive surveillance, predatory addictive-algorithms, harmful content and echo chambers.”
“People vs Big Tech” says it is also helping to secure groundbreaking victories like sweeping new tech laws in Europe. New UK and European legislation provides a “once-in-a-generation opportunity to curb the Big Tech companies in Europe. The importance of communities in shaping regulation has never been more important, especially mobilizing the youth.”
The founder of “People vs Big Tech,” Tanya O’Carroll, says, “...a handful of tech billionaires have been running the Internet like a bunch of feudal kings, harvesting and profiting from our data while their platforms wreak havoc on everything from mental health to democracy.”
“But an amazing generation of young leaders are rising up and fighting back, united by a vision for a better online world…”
Black Friday will be followed by another blockbuster event, Cyber Monday, when consumers of all ages hunt for big deals in the world of technology.
Erken at Rabobank warns the Dutch Authority for Consumers and Market this year is cracking down on fake bargains by shops so “bargains this time around are probably real bargains.”
By Anita Sharma
