Consumers’ economic uncertainty will not be the only factor affecting Black Friday and Cyber Monday sales. Other factors such as the quality of the deals offered, length of sales and age group will also impact how retailers perform this festive season.
1) Consumer spending
The rise of inflation and the cost of living crises are going to impact consumers’ spending this Black Friday and Cyber Monday. Research shows there are 15% less shoppers in comparison to 2019 and 2021.
One of the reasons for this is that 62% of UK shoppers don’t believe Black Friday discounts are better than other sales throughout the year. Studies have shown this to be true as only 5% of Black Friday sales offered a lower price than other sales. Thus, some shoppers choose to avoid the Black Friday and Cyber Monday chaos.
Retailers must regain consumer trust by offering genuinely good deals, as per consumer expectation. At a time when half of all shoppers are willing to try new brands for lower prices, according to Salesforce, offering good deals will help retailers reach or exceed their sales targets this Black Friday and Cyber Monday. The proof is the 16% increase in order value which Amazon saw during it’s Prime Day, on July 12th and 13th, as a result of hefty discounts.
2) Unmissable deals
Retailers are willing to offer up good deals this year in spite of high inflation. “Wavering consumer confidence and a pullback in spending, coupled with oversupply for some retailers, is driving prices down in major online categories like electronics and apparel,” says Patrick Brown, Vice President of Growth Marketing and Insights at Adobe
Many retailers, such as Walmart, Gap and Nordstrom also have large inventory this year which will be offered at large discounts on Black Friday and Cyber Monday.
3) Early Shopping
In an effort to grab these deals, 83% of consumers have started shopping early, as they’ve done the past couple of years. Kristen Gall, retail and shopping expert at Rakuten explains, “Shoppers worried about inflation and a potential recession aren’t waiting until Black Friday, but instead are looking to early fall sales and discounts to beat expected price hikes.”
Since shoppers are not waiting for Black Friday and Cyber Monday, Kohl’s kicked off it’s holiday deals in early October which will last until Christmas eve. Other retailers will also extend their sale length to maximise profits.
4) Won’t break sales records
Shoppers will be keeping a tight grip on their spending this year due to the rise of inflation, cost of living crises, and economic uncertainties. Thus, it’s expected that Black Friday and Cyber Monday will not break sales records this year.
According to a recent survey, 88% of consumers are concerned about the cost of living and 20% are lowering their budgets this Christmas.
To maximise sales, retailers should pay attention to the millennial group as they are the biggest group to shop for themselves. It’s a no brainer since in 2021 72% of Black Friday Shoppers bought something for themselves.
Furthermore, shoppers are less interested in purchasing larger more expensive items such as home appliances, TVs, and computers. Instead, there is a shift in purchases toward clothing, health and beauty products, and household goods – a very millennial trend.
In summary, retailers need to focus on attracting consumers with fantastic deals and great shopping experience. Only then will they be able to get a chunk of the already limited budgets consumers are willing to spend.