2020 brought a shake up to the traditional Black Friday landscape, one that accelerated the omnichannel trend with a greater focus on online deals and diverse purchasing options. However, 2021 brought new challenges with supply chain issues that caused manufacturers to adapt in new ways with reductions to advertising frequency and promotional depth, during this year’s Black November. While this year did continue the trend of offering earlier deals, even leaking into October, overall these promotions were muted – for the majority, not even reaching low prices seen earlier this year. To boil it down, this year can really be broken into three major subcategories of cause and effect: supply chain disruption, shelf price increases, and muffled discounts.

Photo by Justin Lim on Unsplash

 Photo by Justin Lim on Unsplash

The Supply Chain Dilemma

If we have come to expect anything over the past two years, it is to expect the unexpected – and 2021 was no different. With the supply chain being heavily disrupted, reaching back to March of this year, manufacturers have had to deal with: processor shortages, shipping containers idling off the coast of ports, and a lack of truckers to transport the goods that do make it to land. This has culminated in a lack of products being able to reach consumers, and a quick sell-through of these products as a result.

Disruptions were not isolated to any one category as we have seen stock status dwindle to uncharted territory across our category panel. For instance, with the gaming models that we track within our PC space, stock status has dwindled to dangerous lows making it extremely difficult for consumers to purchase a gaming console this holiday season – due in large part to the GPU shortages seen throughout the past three quarters. This was further seen across other categories as both the home appliance sector and the rest of the consumer electronics sectors have similar anecdotes to tell.

This major disruption led to two major changes to promotional activity that affected consumers this holiday season: shelf prices of models increasing, and discounts being reduced on-year.

Econ 101 – Inflation

While I am by no means a mathemagician, basic economics tells us that when supply dwindles during periods of high demand, price will increase accordingly – and 2021 was the proof for the economic lesson.

Across categories, price increases ranged from prevalent $10-$20 increases seen with headphones, to major price increases seen on over 150 vacuum cleaners over the past few months. These price hikes were inflationary, seen on products that manufacturers were struggling with stock status and those with high expected sell-through during the quarter.

This inflation was seen early and I personally expected to see steeper discounts during this holiday season as a result, however the inverse was true this Black Friday. Which brings me to my next point: less aggressive discounts seen this year.

Black Friday: Season of Discounts?

Black Friday has historically been the season of discounts and the best time to buy during the year, giving consumers great deals for the holiday season. 2021 through a wrench in that trend.

The holiday creep has continued into this year, with many of the Black Friday promotions continuing to be offered throughout the quarter – as well as many retailers offering price match during the season if the price were to reduce. However, these promotions were reduced from low prices seen earlier this year knocking Black Friday from its “Best Time to Buy” pedestal for 2021.

2022 Forecast

These muted discounts in conjunction with the price increases seen during the recent months, this Black Friday was a trended reaction from the ripples of the (I hate to say this) unprecedented times (ugh).

While 2022 may not see the promotions of 2020, which saw the highest promotional cadence and advertising spend, I do expect to see a return to a more traditional Black Friday shopping experience. With the caveat that stock availability returns to a more stable period, Black Friday 2022 should see the return of heavy discounts bringing it back to its coveted “Best Time to Buy” position.

For more than 18 years, gap intelligence has served manufacturers and sellers by providing world-class services monitoring, reporting, and analyzing the 4Ps: prices, promotions, placements, and products. Email us at hello@gapintelligence.com or call us at 619-574-1100 to learn more.