Black Friday 2022: What You Need To Know
As retailers and consumers look ahead to Black Friday and the rest of the holiday shopping season, Texas A&M marketing professor Venkatesh Shankar says factors like inflation and supply chain hiccups are continuing to shape consumer behavior in a big way.
Despite growing concerns about a possible recession, holiday spending is still expected to surpass last year’s levels, he said. But rising costs are prompting many to adjust their spending habits.
“Because of the inflation, people are prioritizing what they need, so there’s more spending on staple items. Grocery spending is still very important to people,” said Shankar, who serves as the Ford Chair in Marketing & E-Commerce and director of research for the Center for Retailing Studies at Texas A&M’s Mays Business School.
At the same time, spending on discretionary items like extra clothes and electronics has been more subdued as families aim to rein in their budgets, he said.
In an effort to get out ahead of an anticipated economic slowdown, some retailers started trying to bring in holiday shoppers as early as October this year, Shankar said. There’s already been a spate of “early Black Friday” sales as companies try to move their surplus inventory.
“The standard Black Friday has become a much longer event,” Shankar said. “Retailers would be happy to see consumers spend over the entire holiday shopping period, from the lead up to Black Friday all the way to Cyber Monday and even beyond.
“I think overall, spending should be okay,” he continued. “But I think for that particular weekend, it’s not going to be anything spectacular.”
What You Should Keep In Mind This Black Friday
For those aiming to make the most of this year’s Black Friday discounts, Shankar’s advice is to start early and look carefully, both in-store and online — but keep in mind that kinks in the global supply chain will continue to impact what you see on the shelves.
“Some items are in excess supply,” Shankar said. “During COVID, there were lots of supplies that were stuck in ports. Those items were supposed to have been sold much earlier, so as a result, we now have an imbalance.”
Many other products remain scarce, as international shortages of key components like microchips delay production.
“Chips are still in short supply, so your gaming systems like the PlayStation 5 and so on will be in short supply,” Shankar said.
Supply issues could also lead to an uptick in post-holiday returns in early January. When shopping for loved ones, Shankar said it never hurts to get a gift receipt just in case.
“Because of the uncertainty right now, retailers should anticipate higher returns,” he said. “At least for certain items for which consumers wanted a particular brand and couldn’t get it because of short supply.”
Rail Strike Could Create Complications
Domestically, the U.S. is again facing the possibility of a nationwide rail strike that could paralyze its supply lines, as the country’s rail workers continue to fight for improved pay and working conditions. The Washington Post recently reported that such a strike could be underway as soon as Dec. 5 if ongoing disputes between the railroad companies and their employees aren’t resolved.
“The pandemic created this opportunity for lots of labor movements to raise their grievances, and it’s going on everywhere, not just in railroads,” Shankar said.
In this case, a strike would cut off shipments of coal, drinking water, and other essential resources while also dealing a major blow to holiday shopping and travel. But Shankar said he’s “cautiously optimistic” that a settlement will ultimately be reached in time.
“There’s this bargaining and posturing that might be going on, but I think we should see that in the holiday season, sense will prevail among all the stakeholders,” he said.