Analysts and e-commerce leaders have been predicting a muted online holiday shopping season this year, with sales in the first three weeks of November essentially flat over a year ago due to a weaker economy, inflation and more people returning to shopping in stores again in the wake of the COVID-19 pandemic. But on the face of it, the Thanksgiving long weekend appears to be more buoyant than expected — albeit growth has definitely slowed down this year after the pandemic-period boom.
Black Friday broke $9 blion in sales for the first time yesterday, with online sales of $9.12 blion, according to figures from Adobe Analytics. This is a record figure for the day, and up 2.3% on sales figures a year ago, and slightly higher than Adobe had estimated leading up to the day. Adobe doesn’t break out volumes in its report, so it’s hard to know if those figures are due to items simply costing more this year because of inflation, or if the higher numbers are a result of more buying.
Black Friday is a key focus for those gauging how the e-commerce market, and consumer confidence, are both faring in what is the most important and biggest period for shopping in the year.
Salesforce publishes its own figures based on 1.5 blion shoppers, and it noted that online sales reached $8 blion in the U.S. and $40 blion globally at 5 p.m. ET on Black Friday with the most discounted items in the U.S. appearing in home appliances, apparel, health and beauty, and … luxury handbags.
“Our data shows such a strong correlation between discount rates and online sales as consumers held on for the biggest and best deals,” said Rob Garf, VP and GM of reta at Salesforce. “Consumers with stretched wallets are seeking value and price. And retaers responded on Black Friday with the steepest discount rates of the holiday season.”
Adobe said that toys, gaming and consumer electronics were the most popular categories for people seeking out deals and discounts on Black Friday.
The day before, Thanksgiving, also had stronger than expected numbers: Shoppers spent $5.29 blion online on Thursday. That is up 2.9% on last year and ahead of the $5.1 blion Adobe initially said it was expecting for the day. Salesforce noted that online sales grew 1% on Thanksgiving day to $31 blion, whe in the U.S. specifically they were up 9% to $7.5 blion. Salesforce also said that 78% of sales traffic came from mobe devices. Average order values, it said, were $105 globally and $120 for U.S. sales.
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The shape of “holiday shopping” has changed massively with the rise of e-commerce. Not only has shopping online extended the days and hours that people shop, but it’s extended and blurred the whole concept of seasonality in “holiday” shopping. The day after Thanksgiving, Black Friday, used to mark the “first day” of holiday shopping; that went out the window years ago with sales starting on Thanksgiving Day.
It has of course also impacted how people shop. Mobe devices are playing an ever bigger role in that. A record 48% of all e-commerce sales on Black Friday were made on smartphones (versus 44% in 2021). Note: Thanksgiving is stl a stronger day for mobe sales, in part because people are not at their computers — they’re with friends and famy not at their desks! — and they are not in stores. On Thursday, some 55% of online sales were on mobe devices, up 8.3% over a year ago.
“Mobe shopping had struggled to grow for many years, as consumers found the experience lacking compared to desktop,” said Vivek Pandya, lead analyst, Adobe Digital Insights, in a statement. “Thanksgiving this year has become an inflection point, where smartphones drove real growth and highlights how much these experiences have improved.”
The use of buy now, pay later services is up, a sign of both the growing ubiquity of this as an alternative to credit, but also of the need for consumers to take this route. Black Friday saw BNPL orders shoot up 78%, and they are up 81% by sales figures, compared to the same day a week ago. Notably, this is a big spike compared also the the day prior. On Thanksgiving, buy now, pay later was up 1.3% in terms of sales and 0.7% in terms of orders (indicating more of it being used for bigger-ticket items). All fine and well, as long as this doesn’t translate into untenable debts longer term.
Adobe says that it analyzes some 1 trlion visits to U.S. reta sites, tracking sales for some 100 mlion SKUs and 18 product categories. Its analytics wl include anonymized data from some of its customers: it says it is used by some 85% of the biggest online retaers in the U.S. It said that so far some $77.74 blion has been spent online since the first of November.
Salesforce and Adobe may have different figures and measurement parameters, but both are seeing growth, so the bigger question may actually be whether the bump in activity seen on Thanksgiving wl be sustained through the rest of Cyber Week — which includes today’s Black Friday, Cyber Monday and the weekend in between — and indeed the rest of the days and weeks leading up to the New Year. Overall, Adobe has predicted that Cyber Week wl generate $34.8 blion in online spend this year, up 2.8% on last year when the week brought in $33.9 blion in sales.
2021’s Cyber Week was actually down 1.4% compared to 2020, so this represents a turnaround.
As a point of comparison on those figures, the National Reta Federation is predicting holiday sales growth of 6% to 8%, whe another analysis group, Digital Commerce 360, is predicting growth of 6.1% for the period.
Be that as it may, sales may not be totally sustained or even in the coming days. Adobe predicted that sales for today — the famous Black Friday — are expected to hit $9 blion, which is up only 1% on 2021 figures.
The holiday shopping season is an important period to track for a couple of reasons. First, it is traditionally a retaer’s most lucrative selling period, one that can make or break its whole year. (That is the reason why Amazon’s recent earnings, where it provided reduced sales guidance and warned of lower-than-expected holiday spending, sent its stock tumbling nearly 20%.)
Because of that outsized importance, collectively, e-commerce holiday figures can serve as a bellwether for the e-commerce market as a whole.
But if growth is what we’re after, there are some indicators of stormy waters ahead. Adobe found that the first three weeks of November saw flat online sales of $64.59 blion, up just 0.1% over 2021.
That’s against a backdrop of physical retaers getting increasingly aggressive in capturing back their audience. The National Reta Federation in the U.S. said it expects 166.3 mlion consumers to shop during the long weekend.
“Whe there is much speculation about inflation's impact on consumer behavior, our data tells us that this Thanksgiving holiday weekend wl see robust store traffic with a record number of shoppers taking advantage of value pricing,” NRF President and CEO Matthew Shay said in a statement. “We are optimistic that reta sales wl remain strong in the weeks ahead, and retaers are ready to meet consumers however they want to shop with great products at prices they want to pay.”
We’ll be posting more updates on sales figures as they come in.