Millennial Money: Black Friday shopping could look different this year, experts say

Retailers thrive on tantalizing shoppers ahead of the post-Thanksgiving event, keeping them guessing about how exactly the experience will unfold. But economic conditions, past sales and other factors can provide clues about what’s to come.

Here’s what marketing, retail and supply chain experts expect for Black Friday 2023.

SHOPPERS AND RETAILERS MAY SCALE BACK

“A lot of macroeconomic indicators are pointing to a big slowdown in spending,” says Jeff Galak, associate professor of marketing at Carnegie Mellon University’s Tepper School of Business. Signs include record-high consumer credit card debt — balances reached over $1 trillion in the second quarter of 2023, according to the Federal Reserve Bank of New York — a reduced personal savings rate and the increased cost of goods due to inflation, Galak says.

Consumers are feeling the pinch. Some 2023 shoppers say they plan to purchase gifts for fewer people this holiday season (31%) or spend less on gifts per person (30%) compared with past years, according to the 2023 Holiday Shopping Report from NerdWallet.

Retailers are facing pressures too, which likely means smaller markdowns for Black Friday, Galak says. “Their supply chains are also pushing prices higher, so it’s not like there’s an infinite amount that they can discount whatever the latest television is. There’s still a floor, and that floor is going up.”

SALES WILL PERSIST

While Black Friday prices probably won’t reach all-time lows, shoppers will find deals galore. In fact, many retailers have been in holiday sales mode since the beginning of October. Among the early entries: Walmart Deals Holiday Kickoff, which ran from Oct. 9 through 12, and Amazon’s Prime Big Deal Days on Oct. 10 and 11.

These events preview the products and discounts shoppers might find during Black Friday sales. For example, Amazon and Walmart discounted Apple Airpods Pro (2nd generation) from $249 to $189, the lowest price so far this year.

Retailers bring out some of their best sales when they know customers are most prone to shop. Black Friday remained the most popular shopping day of Thanksgiving weekend in 2022, notes Katherine Cullen, vice president of industry and consumer insights at the National Retail Federation. “It does seem that even with the early start to the shopping season, consumers do still very much look to Thanksgiving weekend for a sense of tradition,” she says.

Expect additional chances to save money as holiday deals continue past November. But if you spot a price that suits your budget, it may be worth buying early.

DELIVERIES COULD FACE INTERRUPTIONS

Lingering effects from a weekslong autoworkers strike could create shipping delays for holiday shoppers and retailers, as could a federal government shutdown.

A strike involving thousands of United Auto Workers could cause delivery issues if trucks can’t get parts needed for repairs, says Rob Handfield, a professor of supply chain management at North Carolina State University’s Poole College of Management.

The U.S. government narrowly escaped a shutdown in September, but funding lasts only through Nov. 17 — one week before Black Friday.

“We rely on a lot of government services to make supply chains work: Customs and Border (Protection), a lot of the regulatory agencies, the FAA,” Handfield says. “If there’s a government shutdown and some of those agencies are impacted, it’s going to impact import/exports, it could impact our rail system, it could impact our transportation system.”

Still, experts don’t expect the same level of supply chain disruptions as in the past couple of years.

Retailers have taken steps to diversify their supply chains and work around external shocks, Cullen says. “Oftentimes, they’ve moved up the lead times for holiday inventory for key events. Also, a longer shopping season gives more runway for consumers to come back and find items that may have been in short stock early in the season.”

Cullen adds that retailers have been increasingly transparent about what’s in stock, where it’s available and how long deliveries might take, which can help shoppers decide what to buy and when.

SHOPPERS HAVE MORE TIME TO MAKE RETURNS

Black Friday shoppers may get accommodations when it comes to making returns.

Many major retailers relax return policies or extend return windows around the holidays. Walmart, which normally has a 90-day return limit, will allow most purchases made from Oct. 1, 2023, to Dec. 31, 2023, to be returned through Jan. 31, 2024. Target won’t start its 30-day return clock until Dec. 26 for electronics and entertainment items purchased from Oct. 1 to Dec. 24.

Some consumers can even get a refund without leaving their cars or their homes.

Target rolled out free drive-up returns in time for holiday shopping. The service lets shoppers initiate a return in the app and complete the transaction in the store’s parking lot.

Uber also recently launched a “Return a Package” feature allowing people to send up to five packages via courier to a local post office, UPS or FedEx location for a $5 maximum fee.

Read return policy and service details before you shop Black Friday sales to better understand your options.

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This column was provided to The Associated Press by the personal finance website NerdWallet. Lauren Schwahn is a writer at NerdWallet. Email: [email protected]. Twitter: @lauren_schwahn.

RELATED LINK:

NerdWallet: 2023 holiday shopping report https://bit.ly/nerdwallet-2023-holiday-shopping-report

METHODOLOGY:

The 2023 Holiday Shopping Report was conducted online within the U.S. by The Harris Poll on behalf of NerdWallet from Aug. 17-21, 2023, among 2,069 U.S. adults ages 18 and older, among whom 1,762 plan to purchase gifts this holiday season. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.7 percentage points using a 95% confidence level.