Friday, December 15, 2023

Holiday Receiving and Giving

The end of the year is always a hectic time for everyone, with many holidays around the world. It is also usually a big time for retail businesses.

This year, retailers have settled the long debate on when the holiday season begins—the earlier the better, as reflected in the surge in Black Friday deals. According to the traditional explanation for Thanksgiving-linked Black Friday sales, retailers—after an entire year of operating at a loss (“in the red”)—supposedly begin to earn a profit (“move into the black”) on the day after Thanksgiving, mainly because shoppers begin to spend heavily on discounted merchandise.

Compared to prior years, this year Black Friday spending appeared quite subdued. Brokerage TD Cowan lowered its United States holiday spending estimate from 4% to 5% down to 2% to 3% as it forecast flat Black Friday traffic. It has also estimated that U.S. shoppers plan to spend an average of $875 on holiday purchases—$42 more than last year. This is the lowest expected increase in five years. The National Retail Federation (the nation’s largest retail trade group) also expects shoppers to spend more this year than last year, but at a slowing pace.

Why would this be?

According to the Associated Press, many retailers ordered fewer goods for this holiday season and pushed holiday sales earlier than last year to help customers spread out spending. Gone are the days of a single-day Black Friday sale when customers would stand in line for hours in the middle of the night, with brawls breaking out over high demand items. According to Adobe Analytics (which tracks online spending), customers spent $5.6 billion in online purchases on Thanksgiving Day alone, when most major stores were closed, and $76.7 billion in online purchases over the first 23 days of November—up 6.8% from the same period a year ago. Online Black Friday deals were expected to bring in $9.6 billion, up 5.7% compared with a year-ago. The diffusion of spending from a single day to a season steals some of the spotlight from Black Friday deals.

But there is a bright side to this: spreading out purchases leaves room in consumer budgets to give to local communities. GivingTuesday is a global generosity movement, limited to a single 24-hour period, providing critical donation support to communities and causes. The GivingTuesday Data Commons estimates that giving in the United States alone totaled $3.1 billion this year, a modest increase of 0.6% from 2022.

After treating yourself, family, and friends on Black Friday and Cyber Monday, make sure to treat your community on GivingTuesday.

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