The Holiday Season Economics

A street filled with shoppers and decorated for the holiday

The Holiday Season, or as retailers like to call it, the shopping season, is here, and two key dates are Black Friday and Cyber Monday.

According to a survey by, 86% of Americans are planning to spend their hard-earned cash on pre-Christmas sales. Estimates are that Americans will drop roughly $87 billion on Black Friday and Cyber Monday promoted sales.

The term Black Friday was adopted in the 1950s, to signify the day that retailers turned a profit for the year. The one-day retail sale event happens the day after Thanksgiving and generates more business than any other day of the year. By the way, the term Black Friday was first associated with financial crisis, not shopping, and the evolution of its meaning is an interesting read.

The term Cyber Monday was first coined during the 2005 holiday season when Ellen Davis of the National Retail Federation noted the increase in online shopping. This event occurred on the Monday after Thanksgiving, mainly because, at that time, businesses had better access to the internet and better computers with faster processors. Also, due to the increase in the number of products available for purchase through the internet and the efficiency of delivery services.

However, just as retailers stock their shelves with Christmas decorations earlier and earlier each year, Black Friday and Cyber Monday sales are no longer single-day events. As you may have noticed, stores have started promoting significant savings on popular products beginning the Monday before Thanksgiving and extending special pricing for the week after, turning both days into week-long events generating huge revenue numbers.

Research also shows that although 12% more Americans are planning to partake in 2019 pre-Christmas sales than in 2018, they are expected to spend about $3 billion less than the previous year with the average adult expecting to drop $397.50 (roughly $87 billion).

While you might think that women are more likely than men to shop ’til they drop, survey results also show that slightly more men, 88% say they plan to shop over Black Friday and Cyber Monday versus 85% of women.

Men are also expected to spend $58.26 more than women, budgeting an average of $436.20 for men compared with $377.94 for women.

Whether it is because of the long-ingrained family holiday tradition or the fact that Baby Boomers have a more extended family tree, they are expected to spend more than the younger generations, an average $626.35 this year. Generation X’s, those between the age of 39 & 54, are expected to spend an average of $459.72, and Millennials an average of $252.11.

Knowing your customers is key.

If you are selling electronics, your target audience is the Gen X and Millennial crowd, who are expected to spend $31.8 billion and $11 billion on electronics that are popular with their respective age groups and activities.

In the category of beauty and makeup products, the younger, fresh-faced Millennials will spend about $2.8 billion while the middle-aged Gen Xs are expected to spend about $3.1 billion.

The Baby Boomers are forgoing the electronics and accepting the signs of aging, spending only $2.8 billion on beauty products. So, where are the Boomers spending their money? After gifts for the children and grandchildren, Boomers will be traveling, spending an estimated $12.2 billion on hotels, airfare, and cruises.

What does this mean for my local business?

While Black Friday and Cyber Monday are huge retail days for big box stores like Walmart, Target, J.C. Penny, Best Buy, and the like, small businesses have struggled to get into the game. They simply cannot compete with the sales volume and buying power of the big corporate giants.

In 2010, credit card giant American Express created the idea of Small Business Saturday, squeezing it between Black Friday and Cyber Monday. This year it falls on November 30. The compelling argument for supporting local small businesses is the impact that your purchase makes on the local community. In fact, for every 100 dollars spent at a small business in the U.S., approximately $68 of it stays within the local community—compared to just $43 for large businesses.

According to the Small Business Association (SBA), small businesses make up more than 99% of all businesses in the U.S. and employ 47.5% of the country’s workers. On average, only 50% of these businesses survive to pass the five-year mark.

If you have a small retail business, generally classified as having 100 employees or less, there is an excellent article in on how to prepare and promote your business next holiday season. Unfortunately, if you have not already started promotions for this year, you are too late.

In 2018, it was estimated that $17.8 billion was spent by U.S. consumers who said they shopped at independent retailers and restaurants on Small Business Saturday. And, according to small business owners, sales on that day accounted for 29% of their total annual business.

Business Finance Corporation (BFC) is a Las Vegas-based owned and operated small business that helps other small businesses maintain a cash flow balance throughout the year. Just as the holiday season provides a spike in sales for retail type businesses, there are other times of the year, based on the weather, school programs, and other factors that influence other types of companies. BFC helps to smooth out the typical peaks and valleys of accounts receivables and collections. To learn more, call David Cabral at 702-947-3800 or go to