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From Prime Early Access to Downbeat Black Friday, Holiday Looks a Little Different This Year

Maybe the one thing retail should know as the gloves come off this holiday: searches for “save money” are up in the U.S. and have reached an all-time high worldwide.

That’s what ShipStation owner Auctane and Retail Economics discovered when surveying 8,000 consumers and 800 merchants globally for their Holiday Shopping Trends Report: Winners Despite Uncertainty. Tuesday’s research augments the narrative that retailers will face an uphill battle this season when  “[c]onsumers are concerned, budgets are under pressure, and households are intending to cut back this year,” said Richard Lim, CEO of Retail Economics, a British economic consultant.

Economic influencer JPMorgan Chase CEO Jamie Dimon echoed much of these concerns on Monday when he told CNBC that Europe’s already in a recession, and the U.S. could follow in as little as six months. FedEx has also trimmed its holiday outlook to reflect clients’ who said they expect to ship fewer parcels, according to an internal memo viewed by Reuters.  

That’s why experience will be key to court shoppers thinking twice about every dollar they part with. More than half, at 58 percent, plan to curb their outlay on nonessentials for potentially $30 billion less in seasonal spend, according to ShipStation’s report.

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“Inflation and economic uncertainty are forcing consumers to rethink their spending priorities this holiday season,” said Robert Gilbreath, general manager of Austin-Texas-based ShipStation, an e-commerce shipping solution provider. Retail’s “holiday season game plan” should focus on fine-tuning the customer experience “from the moment an order is placed online through last-mile delivery.”

E-commerce should once again take a central role in driving holiday business, according to Adobe Analytics, which pegs the season’s online apparel sales at $40.7 billion, or 19 percent of the period’s projected overall $209.7 billion haul. That’s 6.7 percent off from the year before, perhaps signaling that consumers plan to purchase more clothing in stores versus online. Apparel is one of three categories alongside electronics and groceries expected to account for half of that peak-season tally, according to Adobe, which measures the season from Nov. 1-Dec. 31.

It expects discounts in the category to be up 19 percent versus 13 percent a year ago, while global consultant Simon-Kuchar & Partners’ summer survey of 20,500 consumers in 23 countries says people expect 26 percent discounts overall, on par with the last pre-pandemic season.

Retailers from Walmart to Target started marking down clothing and other categories months ago to shave down their overstock, meaning customers might have a hard time paying more than the low sticker prices they’ve seen since at least the summer.

Speaking of Target, the mass merchant on Monday launched its week of Black Friday Deals three weeks earlier than usual this year, a sign that the industry might be fighting tooth and nail to win every last purchase. Christina Hennington, Target’s executive vice president and chief growth officer, said the move gives customers “even more reasons to choose Target for everything they want and need this holiday season.”

Target’s sale goes head to head with Amazon’s Oct. 11-12 Prime Early Access event, with both encouraging more people to spend early instead of waiting for the “traditional” shopping days of Black Friday and Cyber Monday, the latter of which should yield $11 billion on 1 trillion visits, Adobe pointed out. The fact that these events are migrating earlier into the season underscores the “Black Friday in October” trend and “reflects the inventory glut in U.S. retail,” said Coresight Research CEO and founder Deborah Weinswig.

Amazon’s newest deal event follows two weak quarters for the e-commerce behemoth, with Q1 first-party online sales growing just 1 percent while Q2 came in flat. The company’s total second-quarter sales still outpaced estimates calling for $119.1 billion  to reach $121.2 billion.

Prime Day sold 300 million items over a two-day span in July, with its 100,000-plus-product-per-minute sales rate the highest in the event’s eight-year history. Coresight estimates that Amazon and its third-party sellers sold about $9 billion during the promotion.

The e-tailer likely wants to capitalize on that momentum this week. “Whenever Amazon puts on Prime Day, it generates strong U.S. consumer interest,” Weinswig said. Ahead of the July 12 event, the research firm reported that more than 42 percent of U.S. shoppers expected to browse the sale, and more than one-fifth planned to make a purchase.

“Given those trends, we expect to see relatively consistent interest in Prime Early Access this October,” Weinswig added.

Holiday shoppers make a last-minute trip to the Macy’s flagship department store in Midtown, Manhattan. Photo by Scott Heins/Getty Images

The peak period continues to evolve with the times, reflecting headwinds, supply chain realities, consumer sentiment and more.

“The shape of the holiday season will look different this year, with early discounting in October pulling up spend that would have occurred around Cyber Week,” said Patrick Brown, Adobe’s vice president of growth marketing and insights.

“Even though we expect to see single-digit growth online this season, it is notable that consumers have already spent over $590 billion online [from January to August] this year at 8.9 percent growth, highlighting the resiliency of e-commerce demand.” He was referencing Adobe’s estimate of 2.5 percent growth for holiday sales this year versus 2021, when they rose 8.6 percent year on year.

Adobe expects the Sunday after Thanksgiving to surface the best deals for apparel and sporting goods. It sees Thanksgiving sales falling 1 percent from last year to $5.1 billion, while Thanksgiving-through-Cyber-Monday sales could yield 2.8 percent more than 2021 or $34.8 billion. Curbside pickup is seen driving brisk business during the season, it added.

“These major shopping days are losing prominence as e-commerce becomes a more ubiquitous daily activity, and as consumers see discounts continuing throughout the full season,” Adobe said.

Black Friday could see 71 percent of shoppers spending less than $200 on the once-dominant day, according to Simon-Kuchar.

“Currently, Black Friday remains well ahead of other promotional holiday events for perceived top deals,” said Joanna Perey, a director at the global consultancy. “However, the consumer population has doubled its trust in Amazon Prime Day since 2019 to have the best deals with a total of 30 percent believing so.”

Other industry watchers have reported their estimates for the holidays, as well. Deloitte is projecting a 4 percent to 6 percent increase for $1.45 trillion to $1.47 trillion during the November-to-January time frame.

The National Retail Federation, which hasn’t yet published its forecast, said last year’s holiday sales climbed 14.1 percent to a record $886.7 billion.