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Holiday Shopping Review: How the Turkey 5 Set the Tone

3 Mins read

Back in 2017, Amazon coined a new term for the shopping period between Thanksgiving and Cyber Monday: The Turkey 5. Apart from injecting a little fun into the world of eCommerce, this new name helped highlight just how critical the Turkey 5 had become for retailers.

The opening days of holiday shopping typically set the tone for the remainder of the season. Those early results also help marketers pivot their strategies to move away from bad bets or seize exciting opportunities.

Questions of how the pandemic would impact holiday shopping have dominated the last two Turkey 5 seasons. This year, retailers wondered how rising interest rates and economic uncertainty would affect the market. Once again, the 2022 Turkey 5 results painted a clear picture of the typical American consumer’s mood.

Key Findings From the Turkey 5

An analysis of the Turkey 5 shopping data taken from a macro perspective and a cross-section of our clients revealed a couple of important takeaways. The first is that inflation likely eliminated any profit increases for many retailers. Secondly, the average consumer felt the impact of rising prices on their pocketbook. Here’s what the data showed us.

Revenue Was Up, But That’s Not the Whole Story

Adobe, one of the country’s leading analytics providers, published its 2022 Holiday Shopping Report just days after the Turkey 5 ended. It showed online Black Friday spending reached $9.12 billion, up 2.3% year-over-year. Cyber Monday online spending was also up 5.3% over 2021, hitting $11.3 billion.

While these were encouraging results, the numbers didn’t tell the entire story. Inflation has driven up the costs of goods and services dramatically during 2022. November’s consumer price index pegged inflation at 7.1%, meaning retailers likely saw their Turkey 5 net profits decline year-over-year despite seeing topline revenue growth.

Consumers Chased Deals on Short-Term Credit

2022 Turkey 5 data also pointed to growing price sensitivity among American consumers. According to Google, searches for “deals” were up 25% over 2021, while searches for “gifts” were down 10%. These results indicated that consumers were looking for the perfect bargain this year rather than the perfect gift.

More consumers also took advantage of short-term credit options this year, as buy now pay later use increased by 78%. From the consumer side, Turkey 5 data suggested that good deals serviced by short-term credit helped buoy holiday shopping sales.

A Holiday Season Predictor

The Turkey 5 results clearly showed the toll inflation and economic uncertainty have taken on both retailers and consumers. With the cost of living rising dramatically in 2022, consumers had less money available to spend on holiday gifting.

Retailers, faced with the same economic conditions, saw profits eaten away by increased costs and reduced spending. This dynamic set the stage for a disappointing holiday season overall.

Moreover, many retailers placed inventory orders early this year to avoid supply chain disruptions. Softer-than-expected sales had the potential to create added pressure as retailers looked to move inventory to free up cash.

So what would the remainder of the holiday shopping season bring? Would consumers continue to curb spending, or would they defy the Turkey 5 data and deliver big returns for retailers?

How Has the Shopping Season Played Out?

As in previous years, the Turkey 5 set the tone for the rest of the holiday shopping season. While it will take a few more months for the complete picture to appear, early results point to a significant holiday shopping slowdown.

Census Bureau data shows that sales dropped by a seasonally adjusted 0.6% in November. Those numbers are even more stark when compared to October’s 1.3% sales increase. Such a significant drop in the heart of the holiday shopping season demonstrates how much the market has changed over the last 12 months.

Inventory concerns also appear to be growing for businesses. October’s data shows U.S. business inventory levels at an all-time high of $2.468 trillion. This glut could push retailers to try and offload excess inventory after the holiday season ends through additional deep discounting.

The Long-Term Impacts Are Unknown

It’s too early to know what the 2022 holiday shopping season says about our broader economy. Could these lackluster results be a sign of wavering consumer confidence in the face of a potential recession? Or does this data represent the transitory impact of sustained inflationary pressures? Only time will tell.

Hopefully, inflation will soon wane, the economy will demonstrate the same resilience it showed during the pandemic years and the 2023 Turkey 5 numbers reflect continued growth without any necessary qualifiers or context. That’s a result we’ll all be pulling for.

Matt Bowen is the associate director of enterprise client services | strategy at Logical Position, an Inc. 500 company headquartered in Oregon with offices nationwide. The agency offers full-service PPC management, SEO, and website design solutions for businesses large and small, and was ranked as the third best place to work in America by Inc. Magazine.

Shopping stock image by Alliance Images/Shutterstock

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