Retailers had to deal with difficult circumstances over the past few years. To start, it has been nearly impossible to accurately predict consumer demand during and after the COVID-19 pandemic. These inaccurate predictions have led to both shortages and surpluses.
On top of that, retailers have also had to deal with soaring inflation, which squeezes their consumer’s budgets as well as their own profit margins.
To compensate, many in the sector have launched holiday discounts earlier than ever. Many went live this week. But it seems these early discounts are not having the impact that retailers had hoped for. “Discount fatigue” could be one reason why. In other words, shoppers are getting accustomed to the new low prices, reducing their urgency to make a purchase.
More Like “Dark-Gray” Friday
Black Friday is historically the biggest shopping day of the year. Thanks to the rise of online shopping, sales have increased overall since consumers have multiple ways to spend. Yet early projections suggest this year’s Black Friday could be more accurately described in a shade of gray.
Experts predict that online sales from this year’s Black Friday will increase just 1% from last year. Cyber Monday’s sales are projected to grow just 5.1%, and overall online spending is forecast to grow just 2.5%. This 2.5% growth would be the smallest increase since 2015.
In fact, there’s even a chance that sales could decline year-over-year.
A survey by KPMG found that a staggering 85% of holiday shoppers are concerned about inflation with 34% expecting they will opt for cheaper gifts. With this in mind, retailers want to make it as easy as possible for consumers to spend money.
According to KPMG’s head of consumer and retail sector Matt Kramer, the key is for retailers to cater to the budget-conscious consumer. As a consumer, this is potentially good news.
It means that you should be on the lookout for better-than-average holiday deals that encourage you to spend. Sticking to a budget and being aware of how inflation has sapped purchasing power are arguably the most important steps when looking online for deals.
Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.