By Walt Hickey
Welcome to the Numlock Sunday edition! Hope you had a nice Thanksgiving.
This week I spoke to Jordyn Holman, who wrote Good Luck Finding Deals This Year With All the Supply Chain Chaos for Bloomberg. Here's what I wrote about it:
This year’s Black Friday will be a muted one in terms of discounts, as difficulties that retailers have had getting items in stock have diminished the bargains available on the central religious holiday of American consumerism. According to data from Adobe Inc., discounts are at around 8.7 percent compared to last year’s 13.2 percent, and among sporting goods, prices are down 2.8 percent compared to 11.2 percent. According to data from the company, in the month of October U.S. consumers got 2 billion out-of-stock messages, and the percentage of webpages that had out-of-stock goods was up 300 percent compared to 2019. This could mean that fair-weather fans of the event — the kind who only show up bloodlusted to their local Target on the high holy days of Black Friday, Cyber Monday, President’s Day Weekend and the start of Toyotathon — give way to the people who truly believe in the magic of the season.
I love Black Friday; it’s a fascinating holiday that for whatever reason reveals a great deal about the health of commerce in the country. Jordyn’s brilliant, her work at Bloomberg is always a great read, and she took some time out of a particularly busy Black Friday to talk about the evolution of the day.
This interview has been condensed and edited.
Jordyn, we are speaking right now on Black Friday. How is it out there?
Yeah, Black Friday, this would be the first one in like a post-vaccine world that we have. It's definitely more normal this year compared to 2020. I'm seeing folks out half mask on, half no mask and people seem really intentional with their shopping. Folks are leaving stores with bags. There's a lot of young people out, which is following trends that we've definitely seen in past years. I would say the other big thing with Black Friday is that it wasn't a mad rush in the early morning. I'm starting to see more people trickling out during the afternoon, that also changes our idea of what a traditional Black Friday is like.
Yeah. You've written a lot recently about the evolution of Black Friday, particularly the pandemic was a lot of things — it was also a very big pause for an event that kind of got a little out of control there. You wrote a little bit about like the demise of Thanksgiving shopping and things like that. Do you want to get into where we're at and how it's evolved?
I feel like people's perceptions of Black Friday is still very much stuck in a 2005 perspective where people are camping outside in the freezing cold outside of a Best Buy or Target just looking to get the best deal on a big screen TV, the classic doorbuster idea. And Black Friday really got ended last year, obviously, because of the pandemic and a lot of retailers stayed closed on Thanksgiving and that's something that they carried on this year. Target earlier this week said they wouldn't open on Thanksgiving from here on out. So, that's one thing that has changed.
Then also just the idea that people aren't doing the doorbusters because they don't want to encourage crowds to come into the store. The virus is still out here, so just even the fundamental idea of Black Friday had to change. We have that and then also one other thing that people probably have been noticing if they've been strolling around for Black Friday today is that we're not seeing the huge discounts that we are used to. Here and there you'll see 30 percent, 40 percent, but it's not the doorbuster big numbers that we're seeing and that's for a host of reasons that we can get into later.
Yeah, it's a great year to be a door there's zero to no risk of busting, it seems.
This era is over
I want to talk about the deal stuff, because we have all these knock-on effects following the most significant parts of the pandemic and some of that has been supply chain reverberations, we heard a lot about that. But that's actually having a dent in Black Friday, you've written about.
The supply chain is probably the biggest story of this holiday season — the idea that our supply chain, our global supply chain, has not had a chance to heal since the beginning of the pandemic in 2020. Right now that means that there's been slow production overseas, there are delays at the port, there's congestion at the port, not as many drivers to ship things to warehouses and stores, and it is all manifesting into lack of inventory or low inventory at stores for when you, the customer, are coming to try to buy something. It's also manifesting online, too. Those are two of the trends happening, and what that means for you and the deal that you're looking for is that because retailers don't have as much inventory as they would like during this holiday season, they don't feel the need to discount as much to get stuff off their hands. Black Friday is the official kickoff of the holiday season, so no one wants to sell through all of their inventory and still have four more weeks that they have to sell things to folks.
Despite all these supply chain difficulties and whatnot, you just wrote up earlier this week about how Deloitte said that the average in-store spending is going to increase this year from $124 last year to $135. So, on the whole it's still looking pretty good.
Yeah. So, spending is expected to go up this year. It is expected to be a record year for holiday sales. It is expected to be a record holiday season, but a caveat to that is we are seeing higher prices because of inflation. So, there is some parsing to be done on, are people just buying more stuff? Or are they paying more for the stuff that they're buying and that's adding to the larger transaction number?
Got it. Yeah, just kind of backing out a little bit, it is really interesting and kind of cool that the economy and specifically the retail economy has rebounded so significantly from, again, a global pandemic that destroyed the supply chain.
Yes, and when we talk about Black Friday, that is an American invention and Americans spend the most of any country on the planet. We love spending, that is our American pastime. It makes sense that retail would rebound once people have more leeway to get out and shop to spend their money on things. When we think about holiday spending, it's not just on gifts, it's on services, it's on eating out, entertainment. The mall I'm at right now has a skating rink, like all of that adds to this fourth quarter spending that's so crucial for the retail industry.
You wrote a little bit in one of your recent stories about how the actual experience in the mall is changing and like Santas are back and things like that.
Yes, Santas being back is a huge thing. I'm sure everyone either has sat on Santa's lap or have had seen the Santas in the malls. It was kind of on hold last year obviously for virus concerns, and I've talked to a few mall owners and stores that have brought back Santa, they still have restrictions. One mall owner that owns properties in the Mid-Atlantic region, they will allow you to stay on Santa's lap, he is vaccinated. But if some families don't feel comfortable, you can sit on a stool in front of him. Macy's Herald Square, the largest department store in the US, they have brought Santa back as well. He was in the Macy's Thanksgiving Day parade and now if you're a kid who wants to meet Santa at Macy's, you can't sit on his lap, but you sit across a desk from him and you'll still get to meet Santa. So, it's not the normal Santa experience, but he is back from the north pole in time for Christmas this year.
It's a little bit less sitting on Santa's lap, more Santa's performance review of naughty and nice.
Yeah, Santa's literally just prepping you for corporate America.
The original HR. You and your colleague, Matthew Townson, had been writing all day about this on Bloomberg. You had some numbers from Thanksgiving online spending and it seemed that it was a little bit lower end. Do you think there's going to be a problem for the weekend overall or the season overall? Or is that just that Thanksgiving is a little bit less significant to the plan, as you mentioned?
It's interesting because the peak days that we're used to the Black Fridays, the super Saturdays of the world, they have become less important overall. Most retailers you talk to will say that Black Friday is their most trafficked day in stores. When you think about the way that retailers have approached Thanksgiving, they closed most of their stores. So, that kind of number isn't too surprising about it being lower than years past because, big picture, retailers have spread out deals, have been encouraging people just to shop in general throughout the season in ways that we weren't seeing five, 10 years ago. But most retailers still feel very confident that people are going to be spending at high levels, they don't see anything being chipped away right now from people's concerns about inflation or the virus. They're pretty confident that people are ready to spend after this crazy two years that we've been experiencing.
And even for a lot of the brick and mortars, there are some pretty robust online operations. I remember like a week or two ago, you wrote a really good story about how Macy's just has a really ridiculous digital business now that nobody really kind of expected.
Yeah. So, Macy's has been one of those traditional stores that has really been building up its e-commerce business, so much so that it's getting the attention of an activist investor who's saying that they should maybe split up their e-commerce from their brick and mortar business. Macy's likes its omnichannel business, the idea that the store's inventory is connected to the e-commerce and whatnot, but they are going through the process of exploring, is it a good move to split it apart? That also goes back to deals. The deals that you're probably going to see in-store, you're going to see online because retailers want to make sure that they can reach consumers however they want to shop, as something you'll hear time and time again from executives. And so, online is just baked into the holiday shopping season, it's not going away.
Well hey Jordyn, thank you so much for taking the time out of a very busy day to talk, where can folks find you and where can folks find your work?
You can always find me tweeting on Twitter at @Jordynjournals. Or you can find me on Instagram just posting about my shopping travels at @Jojoholmey.
Amazing. Again, thanks for coming on. You’re really killing it lately, so it's great to chat.
Thanks Walter. Always appreciate the opportunity.
If you have anything you’d like to see in this Sunday special, shoot me an email. Comment below! Thanks for reading, and thanks so much for supporting Numlock.