Why this Black Friday has more stakes than usual for fashion

Why this Black Friday has more stakes than usual for fashion

For fashion retailers, this is the moment of truth: When they open their doors on the Friday after Thanksgiving, the number of customers who walk in and what they walk out with will play a huge role in shaping expectations for the year ahead. The outlook so far has been unusually volatile, with holiday forecasts ranging from gloomy to cautiously optimistic. Retail sales have repeatedly defied forecasts for a decline. Inflation remains high, but shows signs of moderation; the US economy continues to grow. Retailer earnings for the third quarter were a mixed bag.

The four-day stretch between Black Friday and Cyber ​​Monday will determine which story prevails. More than this year’s sales targets are at stake: Retailers have misjudged consumer demand several times over the course of the pandemic. They don’t want to make that mistake again and are looking at holiday spending to determine their orders for next year. They run the risk of being caught short of inventory if consumers decide to fight their way through a mild recession, or get stuck with a plethora of unsaleable merchandise if there’s a severe recession. Fashion won’t blame the supply chain this time: For the first time since the pandemic, retailers large and small are saying they can get what they need, when they need it.

Retailers rely heavily on discounts to bring in customers. Many stores rolled out “Black Friday” discounts in October. Amazon and Alibaba also held sales events. The results weren’t exactly encouraging: Amazon’s Prime Day in October increased sales by just 15 percent over a normal week, well below the usual increase, according to Earnest Research. Alibaba’s Singles Day sales rose 8.5 percent, the smallest increase since the event’s introduction. Despite all the early sales, Placer.ai saw a milder-than-usual increase in visitors in October. On Thursday, Macy’s said sales dipped around early November, though they’ve since rebounded.

All this could mean that consumers are simply waiting for better Black Friday deals. Or maybe they indicate that they plan to stay at home altogether. Jeff Gennette, CEO of Macy, brought up both possibilities in a CNBC interview last week, saying, “Is that a slowdown in consumer confidence that we’ll be going through all of the fourth quarter? Or is it going back to the buying patterns of 2019, when those weeks I’m quoting were actually consistent with the trend we had before entering Christmas this year? At the moment we are keeping a very close eye on it.”

Just like many other retailers. This week we get our answer.

What else should you pay attention to this week

Sunday

The World Cup starts in Qatar

Monday

Urban Outfitters Announces Quarterly Results

Tuesday

American Eagle, Abercrombie & Fitch and Nordstrom report results

Eurozone reports consumer confidence for November

Thursday

Thanksgiving (US)

Dr. Martens reports the results

Friday

Black Friday shopping holiday

The Week Ahead would love to hear from you! Send tips, suggestions, complaints and compliments to brian.baskin@businessoffashion.com.

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