NEW YORK (AP) — Days after flocking to stores on Black Friday, consumers are turning online for Cyber Monday to get more discounts on gifts and other items that have increased in price due to high inflation.
Cyber Monday is expected to remain the biggest online shopping day of the year and garner up to $11.6 billion in sales, according to Adobe Analytics, which tracks transactions at more than 85 of the top 100 U.S. online stores. This forecast represents a leap from the $10.7 billion consumers spent last year.
Adobe’s numbers aren’t adjusted for inflation, but the company says demand is growing even when inflation is factored in. Some analysts said peak numbers will be boosted by higher prices and the amount of items consumers buy could remain the same or even decrease. compared to previous years. Profit margins are also expected to be squeezed for retailers offering higher discounts to attract budget-conscious consumers and clean up their bloated inventories.
Shoppers spent a record $9.12 billion online on Black Friday, up 2.3% from last year, according to Adobe. E-commerce activity continued to be strong over the weekend, with $9.55 billion in online sales.
Salesforce, which also tracks spending, said their estimates show U.S. online sales hit $15 billion on Friday and $17.2 billion over the weekend, with an average discount rate of 30 % on products. Electronics, sportswear, toys, and health and beauty items were among those providing a big boost, the two groups said.
CONSUMERS SPEND WITH CARE
Mastercard SpendingPulse, which tracks spending for all types of payments, including cash and credit cards, said overall sales on Black Friday were up 12% from a year ago. Sales in physical stores increased by 12%, while online sales increased by 14%.
RetailNext, which captures sales and traffic via cameras, reported that in-store traffic increased 7% on Black Friday, while physical store sales improved 0.1% from a year ago. However, spend per customer fell nearly 7% as savvy shoppers did more browsing than buying. Another company that tracks in-store traffic, Sensormatic Solutions, said in-store traffic increased 2.9% on Black Friday compared to a year ago.
“Shoppers are being more observant, but they are turning to more than a few retailers to be able to determine what they will buy this year,” said Brian Field, Sensormatic’s global leader for retail analytics and consulting.
Danny Groner, a 39-year-old who lives in New York City, said he and his wife want to get a new TV to replace the one they’ve had for about seven years. On Monday he spent some time looking for deals online and found some good discounts. However, he says he wants to be intentional about what he buys and doesn’t mind spending a little more on the right product.
Overall, online spending has remained resilient in recent weeks as eager shoppers buy more items on credit and embrace “buy now, pay later” services that have no interest charges but come with late fees.
In the first three weeks of November, according to Adobe, online sales were essentially stable compared to last year. He said the modest increase shows consumers have a strong appetite for holiday shopping amid uncertainty about the economy.
However, some major retailers are sensing a shift. Target, Macy’s and Kohl’s all said this month that they have seen a slowdown in consumer spending in recent weeks. The exception was Walmart, which reported higher sales in the third quarter and boosted its earnings outlook.
“We are seeing that inflation is starting to really hit the wallet and consumers are starting to run up more debt at this point,” said Guru Hariharan, founder and CEO of retail e-commerce management firm CommerceIQ. adding that there is more pressure on consumers to buy cheaper alternatives.
DEMAND ON THE GO
This year’s Cyber Monday also comes amid a broader e-commerce slowdown affecting online retailers who have seen sales boom during most of the COVID-19 pandemic. Consumers who feared leaving their homes and embraced e-commerce during the pandemic are returning to physical stores in greater numbers this year as normalcy returns.
The National Retail Federation said its recent survey showed a 3% increase in the number of Black Friday shoppers planning to hit stores. 63.9 million consumers are expected to shop online on Cyber Monday, up from 77 million last year.
Amazon has seen its retail business thrive during most of the pandemic, but much of the demand has declined as the worst of the pandemic has abated. To accommodate the change, the company has scaled back its warehouse expansion plans and is cutting costs by cutting some of its projects. It is also following in the footsteps of other tech companies and implementing mass layoffs across its corporate ranks. Amazon CEO Andy Jassy said the company would continue cutting jobs into early next year.
Shopify, a company that helps businesses build e-commerce sites and also offers offline software, laid off 10% of its staff this summer.
The company said on Monday that its merchants have surpassed $5.1 billion in global sales since the start of Black Friday in New Zealand. And spend per U.S. customer is up $5 from last year, said Shopify President Harley Finkelstein.
Despite the bump, Finkelstein said shoppers have been more willing to spend this year and wait for discounts before making a purchase.
AP Business Writer Anne D’Innocenzio contributed to this report.