It isn't only turkey that people look forward to when Thanksgiving arrives. Thanksgiving is also the time of year when most Americans look toward the holiday season, and many take to the frenzied stores on "Black Friday" to take advantage of the deep discounts that many retailers offer. According to the National Retail Federation (NRF), the average American spent $365.34 on Black Friday in 2010 with overall sales adding up to $45 billion. The NRF states that was an increase of $22.03 from the 2009 average of $343.31. According to the NRF, there was also an increase in the number of Black Friday shoppers in 2010 with approximately 212 million people heading out to the malls, which was up from the 2009 figure of 195 million.
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Residents of the southern states typically spend more than those in the north. This is perhaps a little surprising since many Canadians cross the border to take advantage of Black Friday sales which aren't commonly offered north of the border. The state of Texas, and even more precisely the city of Austin, Texas, is home to the biggest spenders in the country. Other cities known to be home to the big spenders are Scottsdale, Ariz. and San Jose, Calif. States with a higher cost of living also tend to see larger expenditures. Some of the top states include Connecticut, Hawaii and California.
Online retailers are getting in on the Black Friday action as well. In 2010, comScore Inc. reported that online retailers enjoyed sales of $648 million, which was a 9% increase from the preceding year. With total spending of $45 billion, online retailers may not account for a huge percentage of the overall spending on Black Friday, though they are certainly gaining popularity. The massively popular online retailer Amazon.com enjoyed huge successes during 2010's Black Friday with a 25% increase in unique visitors coming to the site to take advantage of their sale offerings. That's a pretty hefty increase in traffic for one day. (For related reading, see What Is Black Friday?)
Individuals who do a large portion of their holiday shopping online are also likely to spend more than those who opt for more traditional retail venues. The National Retail Federation also suggests that those that buy online are 3% more likely to buy things for themselves while holiday shopping than more traditional shoppers.
Statistics show that men are more likely to shop on Black Friday than women, with men spending an average of 3% more. Statistically, age also factors into holiday spending with those in the 50 to 65 year bracket spending nearly 75% more than those aged 18 to 25. These figures make sense when considering that older individuals who are generally more established in their careers tend to have more disposable income than those who are just starting out.
What's Being Bought
Black Friday tends to be when shoppers are looking to buy big ticket items. According the NRF, jewelry and electronic items are both popular choices, and both these items saw an increase in sales in 2010. In 2009, 11.7% of shoppers purchased jewelry items on Black Friday, which increased to 14.3% in 2010. Toys, books and gift cards have also been popular choices.
Though it's difficult to say for sure, some analysts suggest that colder weather may even lead to higher sales on Black Friday. Many retailers are also offering "Cyber Monday" sales on the Monday following Black Friday. These sales are meant to attract those who are unable to get out on Thanksgiving weekend to do their holiday shopping. Perhaps some consumers are saving their cash for Monday when the malls and online retailers are a little less swamped with traffic. Store hours are also thought to be a factor in Black Friday spending. In 2010 many stores opened earlier than in previous years, and many consumers were out waiting for the stores to open at an earlier hour. (For related reading, see Goodbye, Black Friday; Hello, Green Monday.)
The Bottom Line
Why is everyone so obsessed with Black Friday sales figures? With people spending rather hefty sums of money on this notoriously busy shopping day, the amount spent on Black Friday is often thought of as a litmus test for the overall economic condition of the country and a way for economists to measure the confidence of the average American when it comes to discretionary spending. Those who are afraid of losing their job aren't likely to be out in the malls buying diamond rings or new video game systems to hide under the Christmas tree. However, to use the Black Friday expenditures as the sole measure of overall economic conditions isn't too wise, though these figures do help retailers to anticipate what kind of sales they can expect through the remainder of the holiday season. With 2011's Thanksgiving season just around the corner, it will be interesting to see what kind of story this year's figures will tell us about consumer confidence and spending.