Navigating the Shopping Landscape: What to Anticipate in America’s Retail Scene

Black Friday used to be a magical day for Bahynah Hughes.Hughes, who works at a health technology company in New York City, recalls waiting in her car at the mall parking lot as a teenager and rushing to jump in line as soon as other people started moving toward the doors. As a high school student with a limited budget, she would take advantage of the doorbuster sales to wrap up her holiday shopping.“It was like a day that you looked forward to because it was only once a year, [and] it was something that you can only do in person,” Hughes, 30, said. “Not everybody was able to do it, but if you did, you kind of cherished it a lot more than you do now.”Today, she feels the holiday has lost its luster, she says. Hughes is still planning to shop over the weekend, both online and in stores, but says she’s in no rush to finish her holiday shopping—and she’s certainly not tempted to wait in line.“The discounts aren’t that high, and then we have access to everything online,” she said. “It’s not worth it to stand outside for three hours for something that I can readily get at home.”It’s true that the postpandemic Black Fridays have been different to those of the early 2000s. Like Hughes, more people are choosing to shop online instead of in stores, and retailers have responded by starting the season earlier and earlier each year, spreading out their discounts over a longer period. According to a Coresight Research survey, a little over half of consumers started their holiday shopping before November, up eight percentage points year over year.Discounts are also not what they used to be. Online discount penetration, or the proportion of merchandise on sale, has dropped to 35% in November, according to data from LSEG and Centric Market Intelligence. That marks the lowest rate for November since the companies began tracking the data in 2016. The average discount for online merchandise also fell to 34% this November, down from 39% last November.But it’s still an important shopping holiday for both consumers and retailers. In 2023, a record 182 million people shopped over the five days from Thanksgiving through Cyber Monday, according to the National Retail Federation, a retail trade group. This year’s Black Friday weekend is expected to break records again. The NRF forecasts that 183.4 million will do some online or in-store shopping over the five-day period, as inflation-weary consumers look to take advantage of the weekend’s deals.Online Shopping Is Taking OffAs in past years, online retailers will drive a big chunk of growth in spending this Black Friday weekend. Close to 70% of respondents in a Deloitte survey said they planned to shop at online-only retailers, up from 57% last year. Respondents also planned to increase their online spending by 15% year over year.“We expect a really strong holiday season,” said Harley Finkelstein, Shopify’s president, in an interview with Barron’s following the company’s third-quarter earnings report.Last year, Shopify, an e-commerce platform that helps businesses sell their products online, processed $9.3 billion in sales over the four-day period spanning from Thanksgiving through Cyber Monday. Finkelstein expects the company will do more than that this year.Indeed, consumers have already started shopping online, thanks to October sales events such as Amazon.com’s Big Deal Days, Target’s Circle Week, and Walmart’s Holiday Deals event. Companies have continued rolling out deals throughout November. In the first 24 days of November, consumers have spent $77.4 billion online, up 9.6% from last November and trending above Adobe’s full season forecast of 8.4% growth.The Black Friday weekend is slated to add tens of billions to that figure. Adobe predicts that Cyber Week, the five-day period spanning Thanksgiving to Cyber Monday, will drive $40.6 billion in online spending, up 7% year over year.“We still expect really good performance as well, because those days, for certain consumers, are still perceived as the day they’ll get the absolute best discount,” said Vivek Pandya, lead analyst at Adobe Digital Insights. “And also, they’ve had years of being kind of trained to shop on those days, and so that’s helped those days kind of be stalwarts through the season.”The convenience of online shopping has long been a big draw for many consumers. Another reason for online sales’ popularity is they make it easy to compare prices, Pandya said—something made all the more useful thanks to the inflation of the past two years that has made Americans more sensitive to prices.Don’t Underestimate the MallWhile online shopping is certainly having a moment, don’t plan on your local mall being empty. ICSC, a shopping center trade group, surveyed a little over 1,000 respondents and found that 82% had plans to hit the mall during the long holiday weekend. Many will be shopping, but others plan to dine out, watch a movie, or meet up with friends and family.“The reasons for going have shifted just from shopping to taking advantage of all the other offerings that are there,” said Stephanie Cegielski, vice president of research at ICSC. “Santa’s always a big draw.”This means you likely won’t see people lining up outside or fighting to be the first through the doors Friday morning—at least at most retailers and malls. Some places, however, are looking to drum up foot traffic by appealing to the Black Fridays of yore.