Black Friday becoming less important as sales start earlier

Yahoo Finance’s Vera Gibbons joins the Live show to discuss the expectations for Black Friday and why it’s becoming less important for consumers to wait for the shopping holiday as retailers begin sales earlier.

Video transcript

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BRIAN SOZZI: It's Black Friday. Let's continue our retail coverage as businesses look to the start of the holiday season to help reinvigorate flagging consumer sentiment. But with consumers moving to cost-saving mode and deals extending year round, has the day lost some of its deal-making cultural relevance? Yahoo! Finance contributor Vera Gibbons is here. Vera, good to see you this morning. How important is Black Friday?

VERA GIBBONS: It's becoming less important. Over the past of the-- past couple of years has become less and less relevant. But it is still a big day. It is still a relevant day overall. I mean, this holiday season people shopped back in October. That's what Amazon ran the sales. Target, other retailers followed suit.

I think people were worried about getting the products they wanted. They were worried about stock outs. They're worried about getting the discounts they wanted. So they did shop early.

But fast forward to today, Black Friday, and people are going to get out there. They're going to get out there today. They're going to get out there tomorrow. They're going to shop on Sunday. They're going to shop on Cyber Monday.

In fact, if you look at the estimates or the projections from the National Retail Federation, it could be, in fact, a record-breaking weekend overall in terms of foot traffic and in terms of sales. So I think people are responding to the promotions that are out there.

A lot of these retailers have excess inventory that they-- you know, we didn't have this problem the last couple of years because of the supply chain issue. So they have this excess inventory that they really need to move. And if people are in the market for a specific item, particularly those big ticket items, they will go out there and spend.

JARED BLIKRE: And if you drill down into some of the reports-- I believe you have one from Deloitte and some of their insights-- who's driving all of this spending that we're seeing? How does that break down?

VERA GIBBONS: Well, it's interesting, yes, I did speak to Deloitte. And they were saying that the low-income shoppers are really driving the spending that we're seeing this holiday season. That-- and these are people who make less than $50,000. They're spending is expected to be up 25% because of wage growth, because of job growth.

On the flip side, Deloitte is saying that the higher income shopper, those making over $100,000 are going to be spending a little bit less. But overall, their projections are very strong. It sort of comes out as a wash with spending coming in at a level that was on a par with 2021 levels.

But we are spending differently. You know, it's funny because they were saying, oh, we're not buying the electronics, the apparel, a lot of the stay-at-home products that we bought over the past couple of years. What are we buying? Gift cards, those are up 7% according to Deloitte.

National Retail Federation is expecting gift card sales to come in at $29 billion. That is an all-time high. That's one way to deal with the inflationary pressures, just to get a gift card $25 value. You don't spend any more than that. So gift cards are huge and also experiences. I think people are really anxious to get back out there and live the life that they used to live prior to the pandemic.

So they want to go to the stadiums. They want to go to the theater. They want to travel. They want to have those, you know, dining experiences. I think people are just shopping a lot differently. Also, I spoke to a lot of people who say that they're shopping with more meaning and purpose this holiday season. They don't want to go out and just buy a lot of junk. They want to go buy something that has a little more significance, a little more sentiment-- something with more of a sentimental value.

Yes, we still want the deals. We still want the values. But we also want to give with more purpose and meaning, particularly since it's been a really rough couple of years. So practicality is also a big theme this year. People want to give gifts that people can actually use.

So I think while we are seeing a decline in some of the traditional categories, like apparel, electronics, and some of those durable goods, and some of those other big ticket items, we are seeing a big uptick in, you know, the experiences, up 7%, and gift cards up 7%.

BRIAN SOZZI: All right, I'll leave it there. Yahoo! Finance contributor Vera Gibbons, good to see you. Have a great rest of the week.

VERA GIBBONS: Thanks. You, too.