The looming question is simple: will this year’s annual post-Thanksgiving Black Friday/Cyber Monday spendathon propel the economy to finish the year with a toast—or will it underperform and just suck the air out of the party?
It’s reasonable to ask because of the unexpectedly explosive 4.9 per cent annualized Q3/2023 US gross domestic product (GDP)—the biggest gain since Q4/2021—and the tendency of American consumers to confound rather than comfort those who dare to predict how the economy will fare.
You’d think that with the third-highest level of inflation in a decade (granted, down from 7.7 per cent a year ago to 3.7 per cent now), mortgages hurtling towards 8 per cent, along with almost exhausted savings accounts and increased credit card debt, it would dampen consumer spending, but that hasn’t happened, yet.
So, what’s in store—back-to-back economic blowout quarters that will end the year with Champagne cork popping celebrations (and a first quarter consumer debt hangover), or will it be just a one-and-done spending hurrah before the cash layout goes cold?
Well, the results of a new
appear to suggest that putting a bottle of bubbly on ice now could be in order.
Last year, consumers spent $325.44 on average over the Black Friday/Cyber Monday weekend—up 8% from 2021. Considering that most consumers think of those two days as mere anchor points for what is really a week of combined pre-and post-Thanksgiving bonanza buying, the survey results suggest an average spend this year of $569.30, led by those who are Gen X (aged 43 to 58 $618.70), followed by Millennials (aged 27 to 42 $605.20), Gen Z (aged 18 to 26 $519.40), and Boomer+ (aged 59+ $475.40) bargain hunters. Granted, it’s one thing to tell someone what you intend to spend and another what you might do, but even if that amount is discounted by a third it still comes out to an average of $70 better than last year’s tally.
For retailers looking for an edge in a crowded market during that timeframe, knowing a spending range might be helpful from a 30,000-foot level, but when you’re in hand-to-hand combat for taps and clicks, getting the most granular intel, even if it’s just directional, can be critical in winning the day.
In that regard, the survey reveals a majority (59%) of Americans plan to shop on Black Friday and/or Cyber Monday but spread their spending over a few days: one third (35%) say they’ll be shopping on both Black Friday and Cyber Monday, while two other groups (24%) are equally split between venturing out on either Black Friday (12%) or Cyber Monday (12%). Geographically, shoppers will be just slightly more so in the Northeast (62%) and West (61%) as opposed to in the South (57%) and the Midwest (56%).
When it’s all added up, half (47%) of Americans could be taking advantage of the bargains on either day—but it’s how they intend to shop that’s also important: the majority (70%) say they’ll be doing most of their shopping online as opposed to mostly in person at bricks and mortar stores (30%). On that latter point, the findings reveal that older consumers are more likely to tilt towards shopping online, whereas those who are younger will more likely descend on those elbows-up gate crashing specials.
There are numerous distractions that could cool consumer confidence and curtail spending before the end of the year (including debt ceiling rankling and two wars), but for now it seems a toast on New Year’s Eve to the economy itself may be in the offing.