The holiday shopping season is off to a strong start for online retailers, thanks to the extended Black Friday sales period. A report from Adobe Analytics reveals that consumers have already spent $63.2 billion online in the first 20 days of November, a 5% increase from last year. This year-over-year increase surpasses even the company’s expectations, indicating a strong early demand for online shopping. With Black Friday and Cyber Monday still to come, the numbers are expected to rise even higher. The report highlights that early discounts and the convenience of mobile shopping have contributed to this growth. Overall, consumers have been taking advantage of the online deals, with significant drops in prices for electronics, toys, clothing, televisions, and sporting goods. As the holiday season progresses, online spending is predicted to remain strong.
Online Shoppers Have Already Spent More Than Last Year, Thanks to Black Friday Creep
Introduction
The holiday shopping season is off to a strong start this year, with online shoppers already surpassing last year’s spending record. The increase in consumer spending can be attributed to the phenomenon known as “Black Friday Creep,” where retailers extend their Black Friday sales throughout the entire month of November. This article will explore the factors driving this growth, the rising costs and consumer behavior, and provide insight into the Cyber Week forecasts.
Holiday Shopping Season Off to a Strong Start
Consumer spending in the first 20 days of the holiday season (November 1 through November 20) has reached a staggering $63.2 billion, a 5% increase from the previous year. This surge in spending is particularly notable as 17 of those days saw consumers spending $3 billion or more per day. This growth has surpassed the expectations of analysts who predicted a 4.8% increase in spending this year.
Higher than Expected Year-Over-Year Increase
The actual increase in year-over-year spending is even higher than what analysts predicted. With the upcoming Black Friday and Cyber Monday sales, it is anticipated that these numbers will continue to rise. Retailers are capitalizing on the extended period of sales to attract more shoppers and drive revenue during the holiday season.
Factors Driving the Growth
Several factors have contributed to the significant increase in consumer spending this holiday season. One factor is the availability of strong early discounts offered by retailers. These discounts have incentivized shoppers to make purchases earlier in the season. Additionally, the prevalence of mobile devices has facilitated more impulse shopping, as consumers can conveniently browse and purchase products on their smartphones. Another factor contributing to the growth is the increase in the use of flexible payment methods, such as buy-now-pay-later options, which have made it easier for consumers to make purchases.
Rising Costs and Consumer Behavior
Despite rising costs in other areas of their finances, consumers are still taking advantage of online sales. Higher interest rates and student loan payments have not deterred shoppers from participating in the holiday shopping season. This suggests an optimistic outlook on consumer spending and a willingness to prioritize holiday shopping among other financial obligations.
Cyber Week Forecasts
The upcoming Cyber Week, which includes Thanksgiving, Black Friday, and Cyber Monday, is expected to drive even higher levels of online sales. Adobe Analytics predicts online sales of $37.2 billion during this five-day period, representing a 5.4% increase compared to the previous year. These sales are projected to account for 16.8% of the full holiday season sales.
Discounts on Electronics, Toys, and Clothes
The early days of the holiday season have already seen significant discounts on a variety of products. Electronics have been discounted by as much as 24%, while toys have been priced 25% cheaper than their suggested retail price. This has led to a substantial increase in online toy sales, with a 76% surge compared to the daily average of last month. Clothing prices have been discounted by 21%, and televisions have seen a 19% reduction in price. Sporting goods have also experienced a 15% decrease in price. These discounts are expected to become even steeper during the Black Friday and Cyber Monday sales.
Other Analyst Groups Optimistic about Consumer Spending
Deloitte’s 2023 holiday retail survey predicts a surge in consumer spending this year. The survey expects consumers to spend an average of $169 online on Black Friday, compared to $121 in the previous year. The company also forecasts a 13% increase in sales during the five-day period following Thanksgiving. However, some retailers remain cautious about their holiday sales. Lowe’s, Best Buy, and Kohl’s have lowered their holiday sales forecasts, citing an uncertain demand environment and customers being more focused on finding deals.
Conclusion
The holiday shopping season has started on a strong note, with online shoppers surpassing last year’s spending record. Factors such as strong early discounts, impulse shopping on mobile devices, and the increased use of flexible payment methods have contributed to this growth. As the holiday season continues, retailers are expected to offer even steeper discounts for Black Friday and Cyber Monday. Analysts remain optimistic about consumer spending, although some retailers have expressed caution due to an uncertain demand environment.
