Discounting Holiday Retail Shopping Results

It’s the most wonderful time of the year – if you are a consumer looking for deals on holiday gifts. But the season of giving has become the season of discounts and that could mean less than merry results for retailers.

According to the conventional wisdom, the day after Thanksgiving is the shining gate to the start of the holiday shopping season. But Black Friday isn’t what it used to be as retailers haul out the holiday decorations earlier and earlier every year and consumers wait for anxious retailers to start cutting prices. And this year is no different.

According to published reports, U.S. consumers spent nearly $11 billion on Black Friday having never left their homes. The online purchases made that day represent a more than 10% increase over 2023. And on Cyber Monday, the traditional start of the online shopping season, consumers spent a record $13.3 billion, a 7.3% increase over the previous year.

But that frenzy of digital commerce came at a cost to retailers with store traffic down more than 3% nationally on Black Friday compared with 2023. While some of those losses were made up by online purchases, the reality is that Black Friday – which hasn’t been the “busiest shopping day of the year” for a while now – is becoming less and less important as retailers offer more and more online discounts earlier and earlier. And some are even extending their Black Friday sales well beyond the day after Thanksgiving.

While this may be good news for consumers, it means those holiday sales totals aren’t as impressive as they might sound.

With consumers expecting – even demanding – discounts, the profit margins for retailers gets thinner and thinner. And while they may move more merchandise, they are generating less revenue, lessening the impact of these traditional shopping days on the overall economy.

There was a time when Black Friday was more than just a big sale, it was an event. Crowds of eager shoppers gathered in the pre-dawn hours outside their favorite stores, waiting for the doors to open and the feeding frenzy to begin. News organizations highlighted the hijinks with special attention paid to hard-to-get items and the inevitable confrontations over the last toy on the shelf.

But those days are gone. Now shoppers can take advantage of big discounts without having to brave the crowds and the mayhem. Instead of having to get up and out of the house early to get the best selection, consumers can sip their morning coffee and point and click at their leisure while they think about what to do with all those Thanksgiving leftovers.

Of course, that won’t stop news media reports of sales figures and projections. And it won’t shake the popular perception of Black Friday and Cyber Monday as the bulwarks of holiday shopping. Most importantly, it will not change the narrative of the significance of the holiday shopping season to the national economy.

To be sure, consumer spending is the single most important piece of the economic puzzle, accounting for two-thirds of the nation’s gross domestic product. But with the shopping season creeping closer and closer to Labor Day, a lot of consumer spending has already occurred well before the first Thanksgiving turkey is roasting in the oven. And those purchases aren’t included in holiday shopping totals.

It is true that consumers are geared up to spend for the holidays. But consumes are geared up to spend throughout the year, with sales, promotions and discounts offered all the time, making the holiday shopping season less of a bellwether for the economy and more of just another sale.