A Month of Black Friday Sales Has Crushed the Urgency to Buy

Six weeks after Amazon’s Early Access Sale and three weeks into Walmart’s month of Deals for Days events, and Black Friday — the mother of all holiday shopping occasions — has arrived.

But rather than opening to her usual standing ovation, Black Friday takes the stage in 2022 in much the same way that an aging rock star needs to prove she’s still got it to her adoring, yet slightly skeptical, fans.

While the pre-show promotion and stage lighting have been massive, and the sound system and band are top-notch, the grand dame of retail now has to show up and work her magic as if it were 1992 rather than the post-COVID, inflation battered, overstocked arena of the day.

For all their size and clout, the nation’s two largest retailers are, in some ways, still bit players within the broader Black Friday venue, as PYMNTS’ latest research from Q2 shows Amazon holding a 6.5% share, and Walmart a 7.1% stake, of total U.S. consumer retail spending.

To be fair, that represents a massive slice of overall spending and the economy — but it still leaves more than 85% of all retail activity up for grabs, meaning the actions of tens of thousands of other brands and stores and sites will have a huge impact on how the holidays go, as well as how the top two players prevail.

The Ghost of Christmas Past

To be sure, consumers and retailers are highly trained in their respective roles during the holiday season, as both have well-honed, if not instinctual, habits in place that have stood for decades. But 2022 is not like other years, as evidenced by data that shows 15 million cash-strapped and inflation-ravaged Americans plan to buy no gifts at all this year.

At the same time, countless other households are in a lock-down mode of sorts, with their spending behaviors skewed heavily towards essential items rather than discretionary purchases, a shift that is projected to see grocery stores emerging as the season’s big winner.

Adding to this year’s unique and complex backdrop is the side effect of sales fatigue from what’s known as “the Christmas Creep” — or the expansion of promotions that now begin in October — as well as the reality that the supply chain-constrained buy-it-now consumer catalyst of 2021 is not just gone, but has been replaced by the inverse.

It’s a scenario where most large retailers have more merchandise on-hand than they’d like or normally would, with many more — including Target — having just plain too much unsold stuff, a reality that has seen legions of stores acting in unprecedented ways to move it out.

The Only Poll That Matters

At this point, the pundits have spoken, the buyers and marketing teams have made their moves, and now it is up to consumers to respond — or not.

Whereas some quarters have pushed the idea that the recent easing of headline inflation data might see Amazon surprise investors who had been spooked a month ago by its “slowest-ever holiday quarter growth forecast”, other industry-insiders, including the 40-year retail veteran leading the nation’s largest department store chain, have a slightly different view.

“When we think about last year, the consumer was flush with cash and there was a pull-forward of demand on well-documented inventory constraints,” Macy’s CEO Jeff Gennette told investors last week during the company’s 3rd Quarter earnings report, noting the conflicting realities this year of the retail industry’s glut of inventory and consumers dealing with tighter budgets and depleted savings.

“With that in mind, we believe they are waiting until closer to holiday to make purchases,” Gennette predicted, pointing to the extra Saturday shopping day the calendar has bestowed upon the Thanksgiving-to-Christmas window this year.

Further adding to this year’s less urgent wait-‘n-see vibe is the simple reality that sales and deals are, quite simply, happening everywhere at an overwhelming scale, a seasonal truth captured perfectly by CNN’s laughably unhelpful story “The 515 Best Black Friday 2022 Deals to Shop Right Now.”

Whether consumers wait a bit for better deals to emerge or continue to selectively shop to spread out the financial hit and check a few people off their lists remains to be seen, but three things are known for sure that will shape Q4 for Amazon, Walmart and the entire sector.

First: While many, many more Americans are on tighter budgets this year, affluent consumers still have buying power and will actively shop.  Second: While inventories, broadly speaking, may be bloated, a few dozen high-demand toys and select other items will still be in short supply and likely sold out quickly.  And lastly: Retailers will be utilizing increasingly sophisticated pricing analytics to make numerous real-time adjustments on the fly, a development that will boost the need for comparative shopping and inventory-seeking searches by consumers at the only place where they can reasonably do so — online.

So, shop ’til you drop or click ’til you’re sick, America.  Big retail — and PYMNTS — will be watching closely.