Early Black Friday discounts in October were higher than in previous years, suggesting that retailers are worried about the upcoming holiday shopping season. Promotions for items like clothing, appliances, and computers were significantly higher last month compared to 2021 and 2022, according to data from Adobe Analytics.
According to CNBC, Adobe found discounts have significantly increased, especially in the online clothing industry. In October, prices dropped by 9%, much higher than the 2% and 5% decreases in 2021 and 2022.
Adobe’s analysis of eight popular holiday categories revealed that only electronics and toys had fewer discounts in October compared to previous years, despite the overall trend, the network reported.
Forecasters said it’s worth noting that Adobe’s data focuses on online promotions, encompassing over one trillion visits to U.S. retail websites, 100 million stock-keeping units (SKUs), and 18 product categories—making it one of the most comprehensive analyses in the industry.
Companies have been starting Black Friday discounts earlier each year, known as “holiday creep.” They do it to make the shopping season longer and suit consumers who like to buy gifts over a longer period of time. According to Adobe, promotions are expected to peak from Black Friday to Cyber Monday.
Despite a decrease in consumer spending in October, the CNBC/National Retail Federation Retail Monitor reported that the significant discounts during the month encouraged online shopping. Online sales increased by almost 6% to $76.8 billion compared to last year.
Adobe explained that its sales growth is due to offering big discounts and the rising popularity of “buy now, pay later” services, which let customers divide their payments into four installments. Last year, approximately 30% of overall holiday sales occurred online or through non-store channels, according to the NRF.
Corroborating Adobe’s findings, research firm GlobalData noted that the depth of discounts and the overall number of items on sale in October exceeded the figures of the past four years, signaling a robust promotional environment.
On average, discounts in October reached as high as 24.1% for various categories, compared to 16.7% in 2019 and 12.9% in 2021. The percentage of items on sale also increased, with an average of 7.8% in October, up from 4.9% in 2019 and 3.3% in 2021.
According to Adobe’s digital price index, prices in October were more than 6% lower than the previous year. This goes against the slight increase of 7% of the prior year. There was a decrease of 1.9% in October 2022, following a 1.9% increase in October 2021.
Still, the personal finance website WalletHub has compiled a list of the best places to shop based on the average discount consumers can get.
The report reviewed more than 3,500 deals in Black Friday ads from 13 of the biggest U.S. retailers. According to WalletHub, JCPenney was the best place to shop on Black Friday because it is offering an average discount of 59.1%. Macy’s, Belk, Kohl’s, and Target rounded out the top five on WalletHub’s best places to shop on Black Friday list. At the bottom of the list was Costco, which WalletHub found was offering just a 17.1% discount.
It’s the fifth time that JCPenney has topped the list since 2014.
Ishani Banerji, a WalletHub expert and clinical assistant professor at the Wilbur O. and Ann Powers College of Business at Clemson University, said it’s important to distinguish between real Black Friday deals and marketing traps?
“Retailers will typically try and signal that a particular price is a good deal by showing a ‘reference price’ on their website,” Banerji stated. “The reference price is what the retailer claims the product is usually sold for and this is contrasted with the sale price. For example, Amazon will show the ‘list price’ for a pair of headphones as $199.95 and then claim that the sale price of $99.95 is a 50% discount.”
Meanwhile, as the retail landscape undergoes transformation, the annual Downtown Holiday Market in D.C., opened in Penn Quarter on Nov. 17 and will remain open until Dec. 23.
Officials said the market offers a vibrant showcase of small businesses, entrepreneurs, and diverse exhibitors. Featuring over 70 exhibitors, including Black-owned and minority-owned businesses, the market serves as a festive kickoff to the holiday season, complete with food vendors, live performances, and a “celebration of community spirit.”
Source: Washington Informer