As the five-day post-Thanksgiving shopping extravaganza concludes with Cyber Monday, consumers are flocking to online platforms in search of deals, marking this day as the pinnacle of the holiday shopping season. Coined in 2005 by the National Retail Federation, Cyber Monday continues to reign as the biggest online shopping day of the year, with Adobe Analytics projecting a historic spending range between $12.0 billion and $12.4 billion but we are expecting it will cross $13 billion.
Major retailers, such as Amazon, Target, and Walmart, have extended Cyber Monday into a days-long event, starting over the weekend. The National Retail Federation notes that consumer spending during Cyber Week serves as a crucial indicator for overall holiday season spending. Despite facing stubbornly high inflation, shoppers have demonstrated resilience, relying on savings and exploring “Buy Now Pay Later” options.
Preliminary data from Adobe reveals a robust start to the holiday shopping season, with Black Friday online sales reaching a record $9.8 billion, representing a 7.5% increase from the previous year. Salesforce estimates Black Friday online sales at $16.4 billion in the U.S. and $70.9 billion globally, while Mastercard SpendingPulse reports a 2.5% rise in overall Black Friday sales excluding automotive.
In-store traffic saw a significant boost on Black Friday, signaling a positive trend for both physical and e-commerce retail. Categories such as electronics, clothing, toys, jewelry, health and beauty products, and sporting goods experienced notable growth. Retailers, adapting to supply chain challenges and inflation, initiated holiday deals in October, with discounts expected to continue in the coming days.
However, Jefferies reports that a majority of retailers offered flat discounts compared to the previous year. Despite this, Salesforce’s data indicates a rise in discount rates to 30% in the U.S. on Black Friday, influencing consumer purchasing decisions. Adobe’s statistics show that spending surpassed Black Friday levels over the weekend, reaching $10.3 billion, driven by higher-than-usual discounts. [Handbook on How to Become an Event Planner and Boost Your Career]
As Cyber Monday unfolds, Adobe Digital Insights projects record-breaking spending, exceeding $12 billion. The estimate anticipates a surge in last-minute spending, particularly between 6 p.m. and 11 p.m. EST, with U.S. shoppers expected to spend $8.3 billion online by 6 p.m. EST. Retailers have employed various strategies, including push notifications and video streaming ads, to entice consumers to take advantage of heavily discounted products.
Buy now, pay later services are expected to play a significant role in alleviating financial stress for holiday shoppers. Preliminary data from Criteo indicates a strong start to Cyber Monday, with transactions during the first 12 hours surpassing those of the previous year.
Despite concerns raised by some retailers, including Walmart, Target, and Home Depot, about the strength of consumer spending due to higher interest rates and depleting household savings, experts such as Nancy Tengler, CEO of Laffer Tengler Investments, express optimism about a robust holiday season.
As the holiday shopping season unfolds, retailers face the challenge of balancing discounts to meet consumer expectations while managing profit margins. Amazon, Walmart, and other major retailers have aggressively marketed Cyber Monday deals, offering substantial discounts on a range of products.
Cyber Monday 2023 is shaping up to be a historic day for online shopping, fueled by consumer resilience, strategic retail initiatives, and enticing discounts across various product categories.
Suggested reading: 39 Insightful Cyber Monday Statistics (2023 Report).