IOWA CITY — Today’s Black Friday shopping extravaganza, followed by Small Business Saturday, marks a vital kickoff to the holiday shopping season, which a University of Iowa College of Business professor says could be make-or-break time for countless Iowa merchants.
Professor Peggy Stover, who directs the UI’s Marketing Institute, says some businesses may have a so-so 11 months and they rely on this weekend’s events to kickstart consumers for December to meet their margins and stay afloat.
“They’re very important, especially for the small retailers in Iowa, since so many of them are competing against your big box retailers,” Stover says, “and then you have, of course, the online retailers who have managed to carve out a significant market share of the holiday shopping.”
Not too many years ago, a majority of stores opened on Thanksgiving Day to beat the Black Friday deals, but there was a backlash that returned the holiday’s focus to family, reserving Friday for the shop-’til-you-drop enthusiasts. Now, very few retailers are open on Thanksgiving, and even many grocery stores will be closed.
“I think it’s both a great PR move by retailers, but it also comes on the heels of consumers just really realizing that the unsung heroes during the holiday season are the retail workers,” Stover says. “They oftentimes are not able to enjoy the holiday season, much like the rest of us, because they have to work.”
Many factors may impact the shopping season ahead, including high interest rates, inflation, record credit card debt, and the restart of student loan payments. Stover also says there’s a demographic change and a shift in mindsets coming, for which retailers will need to brace.
“You have Gen Z and then the younger Millennials, who they would prefer to pay for an experience versus goods or a product,” Stover says. “Another thing to take into account is that Gen Xers are starting to retire, so now you’re losing a consumer base that could have had more disposable income.”
One regional economist predicts holiday sales may rise three to four percent, but when inflation is factored in, retailers may only see a boost of between zero and one-percent compared to last year.