Why retailers like Amazon and Target are getting an early jump on Black Friday deals
The holiday shopping season keeps starting earlier every year.
Amazon.com said on Monday it was launching “Black Friday-worthy” deals with “deep discounts across every category,” bargains aimed at kickstarting holiday season shopping. This year’s deals come 11 days earlier than they did last year, when the online giant launched its Prime Day sales events in October rather than the usual summer timeframe. Last week, Target said it was also going early with deals, bringing back its Deal Days program that fueled strong sales in 2020.
Amazon also announced a service by which a customer can send someone a gift with only their email address or phone number — no address required.
As in years past, big rivals are likely to soon announce their own programs, but Ulta Beauty and Williams-Sonoma’s Pottery Barn are among those already launching Christmas period promotions.
Black Friday-style deals have been announced earlier and earlier in recent years, and in 2019 breached October for the first time, despite how important Halloween can be for retailers. (This year, the National Retail Federation expects Halloween sales to come in at a record $10 billion for the industry.) Initially, that stemmed from a literal arms race between retailers not wanting to lose out on sales to rivals. Last year, the pandemic provided an added reason: Stores wanted to even out spending over a long period because of concerns about store crowding.
This year, the imperative to flatten spikes in shopping—and have the season be less reliant on the Thanksgiving to Cyber Monday weekend and on the final weekend before Christmas—stems from supply chain pressure and the desire to avoid overwhelming stores and e-commerce fulfillment centers when they are harder to staff.
Smoothing out lumpiness in demand will be key in a holiday season widely expected to be a huge one: Sales in November and December are expected to be up 7% and reach $800 billion, according to Bain. Mastercard SpendingPulse had a similar projection, forecasting that holiday retail sales would rise 7.4% from a year earlier. (The National Trade Federation will give its forecast on October 27.)
This contrasts to prior years in which retailers and brands offered deals early because of an overabundance of merchandise that led ultimately to the need to offer clearance prices. This year, the deals are more about stimulating spending early, more than out of desperation to promote. Indeed, shoppers can expect some shortages: Nike last week cut its sales forecast after COVID-19 triggered factory closures in Vietnam that wiped out months of production. And Bed Bath & Beyond Chief Executive Officer Mark Tritton said retailers, and by extension consumers, will be dealing with disruptions that will last well into next year and that “there is pressure across the board” in the retail sector.
What’s more, COVID outbreaks and trucker shortages have led to backlogs at U.S. ports. And so the earlier a retailer knows it needs to re-order a hot item, the more time it will have to do so and not miss a sale.
The other big challenge for retailers has been the labor shortage. Target said last week it would hire fewer seasonal workers than last year but give existing employees more hours, a tacit acknowledgement that it might not be as easy to hire people this year. A more even distribution of sales throughout the season means less stress on the e-commerce distribution system (not to mention surcharges from the package carriers), and therefore less risk of orders arriving at homes after Christmas.
More must-read retail coverage from Fortune:
- Can new CEO Fidji Simo turn Instacart into more than just a delivery company?
- 3 months before Christmas, companies are already bracing for stock shortages and bonkers prices
- Apple and Target retail guru Ron Johnson: Commerce at home will change the way we shop
- If you’ve bought chicken in the past dozen years, you’re owed some money
- Roz Brewer on what it feels like to be 1 of 2 Black female CEOs in the Fortune 500
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