Anticipated Offers on Black Friday and Cyber Monday Deals

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With inflation taking a slight dip from the 2022 frenzy, supply chain issues fading, and COVID-19 restrictions seeming history, the upcoming holiday season appears promising for retailers. But consumer confidence? A different story.

Retail sales during the yuletide season could surge between 3.5% and 4.6% this year, ballooning to anywhere between $1.54 trillion and $1.56 trillion according to a September report by Deloitte. Despite lowered inflation, the industry is grappling with a shaky consumer confidence.

Of late, several companies have expressed concerns about the lack of enthusiasm amongst consumers. Co-CEO and CFO of athletics brand On, Martin Hoffmann, this month indicated to analysts that consumer confidence has changed since last year, while Target CEO, Brian Cornell, noted in August that macroeconomic trends continue to impact consumers' retail interactions.

"They're excited, yet in a trade-down mode," McKinsey Partner Tamara Charm told Retail Dive. And preliminary data suggests that though budgets and sales are on the rise year over year, shoppers expect to get less for more.

Breaking down theComplexities

Holiday shopping budgets this season are predicted to surpass pre-pandemic levels by over 14%, with the average budget reaching $1,652 per Deloitte's 2023 Holiday Retail Survey of October. But the reason for these increases isn't entirely optimistic: it appears that shoppers simply expect high prices, despite a decline in inflation throughout the year.

Seventy-two percent of Deloitte's respondents indicated they expect goods to cost more this season, and many plan to cut back on their gift-giving. Households plan to allocate more funds for gift cards, with allocations increasing from $217 to $300. Shoppers are on the lookout for deep discounts, even stocking up on essentials during holiday sales.

Who's spending, where, and on what?

Consumers aren't all in the same boat when it comes to holiday spending this season. Shoppers earning less than $50,000 annually anticipate an 11% increase in spending, while those bringing home between $50,000 and $99,000 expect a 26% increase. However, those earning between $100,000 and $199,000 plan to increase their budgets by just 2%, while those making more than $200,000 expect to increase their budgets by 22%.

Millennials have been making a significant impact on holiday sales, with expectations of being responsible for 43% of Black Friday and Cyber Monday spending in 2023 compared to 30% in 2019. These younger generations, along with others, are turning to omnichannel shopping as their preferred approach. In fact, 49.6% of Gen Z customers plan to do their holiday shopping at malls – a higher proportion than the 40.8% average.

The number of consumers planning to shop online this season increased to 82%, according to a holiday purchase intentions consumer survey from Circana. Though online retail sales are expected to grow, consumers still intend to visit stores they trust for in-person experiences. In an attempt to make sales, retailers are likely to offer targeted promotions or bundled free gifts to grab consumer attention during key events such as Black Friday and Cyber Monday.

The gradual decrease in inflation rates hasn't fully addressed consumer concerns, as reflected in the overall shaky consumer confidence about the upcoming holiday season.
Despite a surge in holiday retail sales projections, the industry is grappling with the reality of shoppers expecting higher prices due to the pandemic's lasting impact on consumer perceptions.
Companies are expressing concerns about the lack of enthusiasm among consumers, with some indicating a change in consumer behavior since last year.
The average holiday shopping budget is predicted to surpass pre-pandemic levels by over 14%, reaching $1,652, according to Deloitte's 2023 Holiday Retail Survey.
Research indicates that 72% of respondents expect goods to cost more this season, and many plan to cut back on their gift-giving, with an increase in allocation for gift cards from $217 to $300.
Consumers with lower incomes are anticipating an 11% increase in spending, while those with higher incomes are planning more modest budget growth, highlighting varying spending patterns.
Millennials are making a significant impact on holiday sales, expected to account for 43% of Black Friday and Cyber Monday spending in 2023 compared to 30% in 2019.
In an effort to make sales and grab consumer attention during key events like Black Friday and Cyber Monday, retailers are likely to offer targeted promotions or bundled free gifts.
The number of consumers planning to shop online this season increased to 82%, and even though online retail sales are projected to grow, consumers still intend to visit stores they trust for in-person experiences.