Retailers went into this year’s Black Friday season with what can only be described as cautious optimism—or maybe just plain low expectations. After months of hearing about inflation fatigue, tighter household budgets, and cautious consumers, many retailers started discounting early. Some rolled out deals days, even weeks, before Thanksgiving, hoping to coax shoppers off the sidelines.
Then shoppers did what they sometimes do best: they surprised everyone.
Brick-and-mortar retail sales rose 4%. Online sales jumped 9%. Cyber Monday followed suit with sales up 7.1% over last year. Even Giving Tuesday joined the momentum, with philanthropy increasing by roughly half a million dollars compared to the previous year. That’s a lot of movement in a short window, and it happened during a season when discounts were actually smaller than last year, meaning prices were higher.
So the obvious common cents question is: how did that happen?
Black Friday and Behavioral Economics
If prices were higher and discounts were thinner, why did people still spend?
The answer lies in something economists love to talk about but don’t always explain well: behavioral economics. Or, as I like to call it, smart marketing that understands human behavior.
Retailers leaned heavily into storytelling and relational advertising. Instead of shouting, “Look how cheap this is,” they asked a different question: Can you see yourself in this product? Does it connect to your values, your identity, or your aspirations? Does it make you feel something beyond the number on the price tag?
This year, that strategy worked.
Shoppers weren’t just chasing bargains—they were buying things they could relate to. They were responding to stories, emotions, and meaning. That shift tells us something important about where consumers are right now. Price still matters, but it’s no longer the only deciding factor. People want purchases to feel worth it.
Now let’s talk about where the money actually went.
The highest growth category this Black Friday season was luxury clothing and accessories, up a striking 21%. That’s a big number, and it tells us we’re still living in what economists call a “K-shaped economy.” The top half of the K—higher-income households—clearly had the confidence and the cash to spend on premium items.
But that’s only half the story.
Black Friday Buy Now and Pay Later
On the other side of the K, buy-now-pay-later services were used heavily. That tells us lower-income and budget-conscious consumers were also participating—but in a different way. They were spreading payments out over time to make purchases manageable. In other words, spending wasn’t limited to just one group. Everyone was willing to spend if the product felt worth it.
And that’s an important insight. Consumers across income levels showed up this season, but they used different tools and strategies to do it. The willingness to spend was there. The condition was value, not just price.
Now, before we break out the confetti, there’s an important economic caveat to keep in mind: real GDP. When economists look at spending, they have to ask whether people are buying more stuff or simply paying more money for the same amount of stuff due to inflation.
In other words, is spending up because quantities are higher, or because prices are higher?
We won’t know the full answer to that until fourth-quarter data comes in and inflation is factored out. That adjustment matters because it tells us whether consumer demand is truly growing or just keeping pace with rising costs.
But here’s the part that’s still undeniably true.
Spending—when it’s sustainable—fuels the economy. It supports jobs, drives research and development, and keeps businesses investing in the future. When consumers feel confident enough to open their wallets, it creates momentum that spreads well beyond retail counters and checkout screens.
Even the increase in Giving Tuesday donations is worth noting. It suggests that despite higher prices and economic uncertainty, people are still making room for generosity. And that’s not just good economics—it’s good society.
So what’s the takeaway from this Black Friday season?
Consumers didn’t disappear. They didn’t shut down, they became more intentional, they responded to stories, values, and products that felt meaningful. Retailers who understood that—and marketed accordingly, were rewarded.
It’s a reminder that economics isn’t just about numbers on a spreadsheet. It’s about people, behavior, and choices. When businesses use behavioral insights wisely, and consumers spend thoughtfully, the results can be surprisingly strong—even in uncertain times.
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