Why consumers’ financial stress is fuelling a record-breaking Black Friday

Holiday shopping is no longer fast approaching, it’s already here. According to the Australian Retailers Association (ARA), 53 per cent of Australians finalise their holiday shopping lists by October and 58 per cent of Australians do most of their holiday shopping by the end of November. 

Part of this early kick-off is down to Australia’s adoption of Black Friday, an American retail tradition following Thanksgiving, which has now extended into Cyber Monday and Click Frenzy sales.

There is a myth that Black Friday was named because businesses operate ‘in the red’ until the day after Thanksgiving when the holiday sales period allows them to turn a profit – putting retailers ‘in the black’.

The retail industry has gone back and forth for years on whether it’s rational to participate in a period of discounting just before an almost guaranteed period of spending. 

But nonetheless, the tradition prevails, and after this year’s apathetic spending on non-discretionary categories, it appears most brands are ready to launch into discounting across online and physical stores.  

Recording breaking spend

New research from Roy Morgan suggests that Australians will be embracing Black Friday and Cyber Monday more emphatically than ever before.

Australian consumers are expected to spend a record $6.7 billion over the four days known as Black Friday weekend, which this year will go from November 29 to December 2. That marks an increase of 5.5 per cent compared to last year.

The American-inspired shopping event hasn’t always been embraced by Australian retailers and consumers, but with the ongoing cost-of-living crisis and cost-of-trading crisis, there seems to have been a shift in attitude.

Consumers are looking to capitalise on the bargains with early Christmas shopping this year as reflected in their early Christmas wishlist planning.

“Shoppers are being savvier than ever with their dollars,” stated ARA CEO Paul Zahra.

“They’re looking for the best value when it comes to buying presents for their loved ones, which is why sales events like Black Friday/Cyber Monday weekend are consistently growing in popularity,” he added.

Getting in the spirit

Retailers are also eagerly awaiting the influx of revenue that comes from the pre-holiday season bargain hunting. 

“It’s been an incredibly tough year for retailers and shoppers alike,” said Zahra.

“Retailers are pulling out all the stops to ensure they have the best product lines and gift solutions, customer service offerings and enhanced online platforms to make shopping during this peak season more seamless than ever,” he added.

Planning and preparation for the holiday season typically start early in the year, as a greater lead time allows for everything from production to marketing to take place.

“Retailers have been investing in their business months in advance – from installing festive-store fit-outs and adding new product ranges, to improving their online offerings and customer service options,” the ARA’s chief industry affairs officer, Fleur Brown, said in a statement.

While customers are eager to spend, the competition in retail is still high as discretionary spending remains low, which has encouraged some brands to already go live with their Black Friday deals.

According to the 2024 Real Struggle Report, 45 per cent of Australians have less than $1000 in savings.

Sheridan, MCoBeauty, Hommey, Country Road Koh, The Iconic, Dyson, Cotton On and Temple and Webster are among a slew of brands that have launched their Black Friday sales early this year in an attempt to capture holiday spend.

“This Christmas will be more important than ever for retail, and these figures are encouraging in this intensely challenging year,” concluded Brown.

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