Black Friday is most popular with Gen Z, even as the holiday loses its shine, new survey finds

AT&T Business/Morning Consult survey shows Black Friday remains especially popular with younger shoppers—40% of Gen Z and 32% of millennials plan to do most of their shopping that day—while broader consumer intent is softening: PwC finds Gen Z plans to spend 23% less year-over-year and Deloitte reports consumers intend to spend ~4% less on Black Friday. The survey also highlights a shift toward value-driven, local purchasing (77% would shop small businesses if price parity) and limited current uptake of AI for gift discovery (9% more likely to use AI). These mixed signals—strong event-focused demand among younger cohorts but overall weaker spend and cost-of-living pressure—suggest selective upside for retailers targeting Gen Z and value propositions, but limited broad tailwinds for the sector this holiday season.

Analysis

Market Structure: Early-season concentration of Gen Z and millennials on Black Friday favors large omnichannel retailers and payment/fulfilment platforms that can take margin-for-volume (Amazon AMZN, Walmart WMT, PayPal PYPL, Block SQ) and nimble small businesses that match price parity. Expect promotional intensity that lifts unit volumes but compresses gross margins by 100–300bps for incumbents that chase share; inventory-flexible models (drop-ship, marketplace) win over full-price specialty brands.

Risk Assessment: Immediate risk (days–weeks) is execution: logistics delays or higher shipping costs amplify markdowns; short-term macro (CPI, weekly retail sales) can flip sentiment quickly. Tail risks include a sharper-than-expected Gen Z pullback (-23% planned spend) or regulatory limits on BNPL/ads; medium-term (quarters) AI-driven search adoption could reallocate ad spend away from legacy search platforms, changing customer acquisition economics.

Trade Implications: Direct equity/derivative plays should favor market-share beneficiaries and payment processors while underweighting high-FX/high-inventory specialty retailers. Use short-dated options to play event volatility around weekly retail data and Black Friday cadence; rotate capital from high-margin discretionary names into logistics/discount leaders and select tech ad platforms that capture social-first Gen Z demand.

Contrarian Angles: Consensus overestimates small-business shift unless pricing parity holds—large retailers will likely undercut local sellers on units and delivery, so small-business sales gains are conditional and limited. AI is underutilized now (9%) but adoption could accelerate in 6–18 months, benefiting platform owners of proprietary search and customer data (AMZN, META) and hurting pure-play search/SEO monetization.

Key Decisions for Investors

• Establish a 2–3% long equity position in AMZN within 3 trading days to capture Black Friday volume + logistics premium; complement with a 6–8 week call spread (buy Dec 2025 calls, sell higher strike) to limit cost if weekly retail prints show ≥+2% YoY growth.
• Allocate 2% long WMT and 1% long UPS/FDX (split) for defensive, high-volume exposure; simultaneously trim 50% of positions in high-inventory specialty retailers (e.g., RH, COH) where near-term margin compression >200bps is likely if YoY Black Friday traffic beats <1%.
• Buy 1–2% position in PYPL (or one-month ATM calls) targeting a 5–10% move from higher TPV during Nov–Dec; exit if holiday digital payment volumes underperform the 3-year average by >4% on weekly data.
• Establish a tactical 1–2% long in T (AT&T) to play small-business connectivity and subscriber stability into Q1 2026; increase to 3–4% only if small-business sales surveys or AT&T Business announcements show >5% YoY service revenue growth over two consecutive quarters.