Early retail discounts for Black Friday in the US hit record highs this October, a signal of concerns about consumer demand during the crucial holiday shopping season. With promotions across various categories, including apparel, appliances, and computers at significantly higher rates, retailers are relying on discounts to drive demand among cautious consumers.
Even though the discounts covered a wide range of items, including Barbie dolls and other toys, electronics, and apparel, there is an expectation that promotions will peak on Black Friday through Cyber Monday.
Data from Adobe Analytics shows an increase in online sales last month of nearly 6% to $76.8 billion compared to the previous year, driven by deep discounts and an uptick in buy now, pay later services. This suggests that the steep discounts have successfully fueled online spending.
In addition, research firm GlobalData’s data supports Adobe’s findings. Discounts last month were as high as 24.1% across various categories compared to 16.7% in 2019, and the average number of items on sale increased to 7.8% from just 4.9% in 2019.
This trend of early and steep discounts, expected to reach record highs this holiday season, reflects the caution of both consumers and retailers. While the outlook for the holiday season varies between retailers, some are expressing cautious optimism, while others are more reserved.
With the prevalence of deep discounts conditioning consumers to never pay full price, retailers may struggle to convince customers to pay full price in the future. The long-term implications of this trend remain uncertain, but one thing is clear: the 2023 holiday season will be one of deep discounts and cautious consumer spending.