The annual Black Friday shopping day has always been about finding the best deals, but this year retailers were preparing for a US consumer more zealously fixated than ever on getting value for their money. AI appeared to play a significant role to guide online consumers.
Inflation has stabilized after dramatic price spikes during the post-pandemic years, but consumers are still feeling the pinch — meaning bargain-hunting strategies such as grabbing early giveaways and waiting for last-minute steals are in vogue.
Incomes edging up
Consumer prices on average were 22 percent higher in August 2024 compared with January 2020, according to Pew Research.
As a result, compared with previous years, holiday shoppers in 2024 are “even more preoccupied and very focused around value and discounts,” said Vivek Pandya, leading insights analyst at Adobe Digital Insights. “We do see stronger price sensitivity on the part of the consumer and they are very responsive to deals and event-tie deals,” he added.
Throughout 2024, US consumers have responded to special discount occasions such as Memorial Day and Amazon’s “Prime Day.” At Target, shoppers have learned to turn out in force for the chain’s “Circle Week” savings events held about once every quarter. That translates into less buying the week before and after, executives said.
After a lengthy period of inflation, “consumers tell us their budgets remain stretched,” Target CEO Brian Cornell told analysts earlier this month. “They’re becoming increasingly resourceful in their shopping behaviors, waiting to buy until (the) last moment of need, focusing on deals and then stocking up when they find them.”
Kicking off the holiday gift season
Black Friday, the unofficial kickoff of the US holiday gift season, comes the day after Thanksgiving and opens a long commerce-centered weekend that also includes “Small Business Saturday” and “Cyber Monday.”
The National Retail Federation (NRF) said more than 183 million customers were expected to visit stores over the entire weekend, which would represent a record. Furthermore, the organization has projected holiday spending growth of between 2.5 and 3.5 percent in the 2024 season compared with the year-ago period, to as much as USD 989 billion over the two-month period.
The inflationary environment has weighed especially heavily on households with lower incomes, but the situation appears to be changing. Economists have pointed to an easing of gasoline prices as a supportive factor, along with an ebbing in the costs of some food items.
Some retailers, such as Burlington Stores, have pointed to improvement for this cohort of the population. Some of the off-price apparel chain’s strongest sales have been in stores in low-income zip codes, according to CEO Michael O’Sullivan.
“Maybe for the first time since 2021, it looks like their real incomes are finally edging up,” O’Sullivan said on a conference call this week.
On Wednesday, Adobe Digital Insights said that online sales through the first days of the holiday season were up 9.6 percent year-over-year, above the 8.4 percent growth projected for the entire season.
AI assists online consumers
American consumers spent a record $10.8 billion online during “Black Friday” promotions, Adobe Digital Insights announced on Saturday, November 30. Total sales were 10.2 percent higher than on Black Friday in 2023, it said. Top online sales included, toys, jewelry, household appliances, skin- and hair-care products, clothes and electronic devices, makeup products, televisions, board games and perfumes.
Passing the USD10 billion mark was an important step for electronic commerce, given that Black Friday shopping traditionally has been in brick-and-mortar stores, according to Adobe Digital Insights analyst Vivek Pandya.
Interestingly, the high spending totals were the result not of price inflation but of rising demand, Adobe said, adding that electronic sales had seen prices decline for 26 straight months — down 2.9 percent in October from the same month in 2023.
In 2024, AI appeared to play a significant role. Traffic on sites that use artificial intelligence to help guide consumers was up a huge 1,800 percent from last year’s Black Friday, Adobe said. An Adobe survey found that consumers used AI not just to find the best deals but to quickly locate specific articles or to get product recommendations.
As Black Friday promotions continue, online consumers are expected to spend an additional $5.2 billion on Saturday and $5.6 billion on Sunday, Adobe said. And record sales of $13.2 billion are predicted for Cyber Monday, up 6.1 percent from 2023. For the full five-day period from Thursday through Monday, consumers are expected to spend a total $40.6 billion online, up seven percent from last year, Adobe said.
Recently, market research firm Euromonitor said that in a reality shaped by the rising cost of living, impulse purchases were no longer the norm. Instead, strategic shopping has become an inherent mindset.