The moment political ads disappeared, retailers overtook the airwaves with their pitch to the masses: Holiday shopping season is here.
And it’s a frenzy for retailers. Santas made their debut at malls this week. Target shelves are full of “Wicked”-themed merchandise in anticipation of the movie opening this week. And discounts that started in October are in full swing.
Because Thanksgiving is the latest it can be on the calendar this year, the all-important final stretch of the holiday shopping season is six days shorter. The next two weeks — culminating with Black Friday and Cyber Monday — are even more important than in some other years for retailers from Best Buy and Macy’s to smaller local stores.
“Those big-box retailers pave the way for the season,” said Lindsay Koch, director of brand experience and stores for Minnesota apparel brand Waggle. “This year we started our holiday sale earlier than we ever have.”
Waggle’s Maple Grove, Minnesota, store kicked off a nearly month-long sale Monday as shoppers signaled they’re ready to cross some items off their lists.
While retailers and economists expect shoppers to make only modest increases in their holiday budgets, it still could be a record-setting year for holiday sales. The National Retail Federation predicts up to $989 billion, the best haul since 2019. Twin Cities shoppers are expected to spend an average of $570 on gifts this year, about equal to 2023, according to Deloitte.
But retail leaders have also acknowledged they need to work harder to lure shoppers, ideally over multiple trips.
Given the ongoing hangover of intense inflation, surveys show most shoppers are willing to wait out the best possible deal and stick to their budgets. That means Black Friday, Small Business Saturday and Cyber Monday are still big draws, even if today’s deals feel alluring.
“I’m optimistic about the holidays, but there’s no urgency,” said Marshal Cohen, chief retail adviser at Circana. “These early sales are all about capturing the flag as fast as you can, catching the early-bird shoppers — about 18 percent of the consumer base.”
The biggest deals are yet to come. Tina Miller of Zimmerman, Minnesota, north of the Twin Cities, is one of those willing to wait for the sales.
“I wait stuff out to save as much money as I can,” the 53-year-old said.
Winning the fight for the weary shopper
Julie Xiong is definitely pickier this year. She typically shops from Halloween through mid-December for holiday presents. Last year, she said went all out but this year she’s sticking to a budget.
“I don’t have that urge or need to spend,” the 27-year-old said while shopping at Rosedale Center in Roseville, Minnesota, on Monday. “It’s more just checking it out to see what’s on a deal. If I like it, I’ll take it. If I don’t, it’s whatever.”
To break through consumers’ lackadaisical approach to this year’s holidays, retailers are banking on a mix of online pushes and store events to make it easier to find popular gifts and key sales. The deals are right up front, not buried in the aisles, hopefully encouraging impulse buys wherever possible.
“Even amid economic uncertainty and financial constraints, customers are seeking small, affordable indulgences to treat themselves and loved ones,” said Amanda Lai, a director at retail consultancy McMillanDoolittle.
Half of shoppers plan to shop for themselves during the holidays and spend far more than last year, according to KPMG, which reflects “a growing trend of self-indulgence during the holiday season.”
Self-gifting will be key to setting a new retail sales record this holiday season. More people intend to shop for themselves on Black Friday than for others, according to a Slickdeals survey.
“Without that, there’s no growth,” said Cohen at Circana.
Retailers are banking on that trend. Target has exclusive Taylor Swift merch dropping at brick-and-mortar locations to get shoppers in the door on Black Friday.
Online shopping is expected to grow 8% this year, outpacing overall retail, according to Adobe Insights, so retailers need to capture that audience while also winning the in-store push.
Brick-and-mortar can always compete as long as it’s an enjoyable experience, said University of St. Thomas marketing professor Seth Ketron.
“There’s only so much entertainment and enjoyment you can get out of shopping online,” he said. “If you can create an environment people want to be in, that gives you a leg up as a retailer.”
And Black Friday weekend is still the most consequential point of the holiday season for retailers.
“This is for us hopefully where we go into the black,” said Sarah Tava, retail lead at Sitka Gear. “It feels like Black Month. But we are running a Black Friday special with door-busters.”
More than 75% of Twin Cities shoppers are expected to participate in Black Friday or otherwise shop Thanksgiving week, according to Deloitte. That’s up from 60% last year.
The fight for value
Best Buy announced its first holiday plans way back in September. It put supersized TVs in stores in October, during the same time period Amazon, Walmart and Target held their first big holiday sales.
“As we’ve seen this year, sales around seasonal and festive events have been strong,” Walmart said in a statement. “But we know that customers will remain choiceful with their spending.”
Target announced a price cut on 2,000 items in October, on top of thousands more earlier this year, hoping to alleviate some of the cost concerns weighing on consumers.
“Given the significant headwinds they have faced with inflation over the last few years, consumers continue to focus on value as they work hard to manage their household budgets,” Target CEO Brian Cornell told analysts in August. “And while they continue to turn out and shop around holidays and other seasonal moments, many are delaying purchases until the moment of need.”
Mass-market retailers like Best Buy and Target have the advantage. They are already the top destinations for 71% of Americans for holiday shopping, according to KPMG.
“The ones that do a little better craft that experience of, ‘We’ve got everything you need, and it’s enjoyable to be here,’” said Ketron, the University of St. Thomas professor.
The Mall of America wants to claim that crown. The mall is already crowded on weekends as retailers shift into holiday mode and Santa is back. Candy Cane Institute opens on Black Friday.
With sales up 5% this year, “the vibe is cautiously optimistic” for the holidays, said Jill Renslow, chief business development and marketing officer at MOA.
“Now we just need a little snow, little flurries, to remind people we are in November, we’ve got to get ready for the holidays,” she said. “That Minnesota weather impact is a real thing.”
