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Bargain hunters roil retailers looking for Black Friday bounce

Paul Poirier shops for sales at Target on Black Friday, Nov. 25, 2016, in Wilmington, Mass. (Elise Amendola / Associated Press)
Paul Poirier shops for sales at Target on Black Friday, Nov. 25, 2016, in Wilmington, Mass. (Elise Amendola / Associated Press)

Thrifty U.S. consumers carefully picked over Black Friday discounts during the four-day weekend, leaving retailers with less money in their registers and a lukewarm kickoff to the holiday season.

Though the number of shoppers grew over the weekend, the average amount they spent fell 3.5 percent to $289.19, including both online and offline purchases, the National Retail Federation found. Consumers shelled out $299.60 in 2015, according to the trade group, which bases its figures on surveys conducted by Prosper Insights & Analytics.

The weekend was characterized by heavy markdowns and a shift toward e-commerce, meaning there were smaller crowds at the mall. Forty-four percent of consumers did their shopping online, compared with 40 percent at brick-and-mortar stores. In either case, many of them were looking for just one thing: a good deal.

“Over one-third of shoppers said 100 percent of their purchases were on sale,” NRF Chief Executive Officer Matthew Shay said in a statement. That increased more than threefold from last year, setting an ominous tone for the rest of the holiday season — retailers’ biggest sales period of the year.

While the total number of Black Friday weekend shoppers grew 2 percent to 154 million, their refusal to spend as much could renew concerns about the sluggish retail economy. Companies have been trying to bounce back from a polarizing election season that they said prevented consumers from making purchases. They were hoping a strong start to the holiday shopping season would give a boost to the industry.

But retailers also are grappling with a longer-term shift toward more thriftiness — aided by technology.

“There’s a confluence of events here,” Shay said on a conference call Sunday. “Since the recession, we’ve had much more cost-conscious consumers. In the last six to seven years, people have been much more deliberate about the purchases they’ve made. And that coincided with the ability to access information in a very transparent way because of the existence of smartphones and technology-enabled pricing.”

Moreover, e-commerce has reduced the need to buy gifts on Black Friday weekend itself. Online sellers are doing more promotions either before or after the four-day stretch. EBay, for instance, urged Thanksgiving travelers to buy things on their phones while in transit, dubbing the event “Mobile Wednesday.”

Black Friday weekend is followed by Cyber Monday, a push for e-commerce shoppers. More than 122 million consumers plan to take part, up from 121 million last year, the NRF said.

Brick-and-mortar chains have become more aggressive in chasing online customers. Wal-Mart Stores kicked off its “Cyber Week” promotions on Friday, and Target Corp. has been offering 15 percent off all purchases — either in stores or online — Sunday and Monday.

The discounts squeeze profit margins, but there’s often no alternative, Shay said. And in many cases, retailers have been carefully planning for the markdowns as a means as of keeping their inventory low, he said. That decreases the amount they have to spend hanging on to excess stock.

“In a perfect world, everyone would sell everything at full price,” Shay said. “But as consumers, and as buyers, all of us would like to get a deal on things we’d like to buy.”

Spending during the overall season — November and December — is expected to grow 3.6 percent to $655.8 billion, the NRF estimates.

Some consumers also are waiting longer to start their holiday shopping, which puts pressure on retailers to keep up the promotions. Almost a quarter of consumers surveyed by Prosper Insights hadn’t purchased anything on their holiday lists yet, a higher percentage than last year.

“December might even be a little more important this year than last year,” said Pam Goodfellow, the principal analyst for Prosper Insights.

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