With the rise of inflation, Cyber Monday deals are a great way to entice consumers.
On Black Friday, consumers flock to stores for deals. On Cyber Monday, they turn online to find deals that are more affordable. After days of spending too much money (during Black Friday sales), a good way to get a break is by finding discounted items on CyberMonday.
According to Adobe Analytics, Cyber Monday is expected to remain North America’s biggest online shopping day. This year, it could generate up to $11.6 billion in sales and represent a jump from the $10.7 billion spent last year.
Adobe’s numbers are not adjusted for inflation, but it says demand is still just as strong even when inflation is factored in. Some analysts have said the boost in top line numbers will come from higher prices and that buyers may purchase less than they would in previous years. Retailers will also deal with tighter profit margins due to deep discounts offered by shoppers looking to buy items on sale in order to save money.
Retailers are quickly adapting to a digital world, as online shoppers spent $9.12 billion on Black Friday, which is up 2.3% from last year. Online sales continued over the weekend, with $9.55 billion in activity.
Salesforce estimates that online U.S. sales hit $15 million on Friday and $17.2 million over the weekend, with a discount rate of 30% on most goods. Electronics, active wear, toys and health and beauty items provided a big boost to these numbers, according to Salesforce’s estimates.
While e-commerce sales are on the rise, it seems a number of consumers are heading back to physical stores during recent months as things have begun to return to normal. NRF reports that foot traffic to major retailers is up 3% this year and it’s expecting 63.9 million consumers to shop online this upcoming Cyber Monday.
CONSUMERS ARE BUYING LESS NOW
SpendingPulse, a tracker of spending across every type of payment including cash and credit cards, saw overall Black Friday sales rise 12% from the year ago. At physical stores, sales went up by 12%, while online shopping rose 14%.
RetailNext, which captures sales and traffic via sensors, reported that retail traffic increased 7% on Black Friday. However, spending per customer dropped nearly 7% as cautious shoppers did more browsing than touching the merchandise. E-commerce was also up, with sales reaching $12.2 billion on Friday.
“Shoppers are becoming even more thoughtful, but they’re not just shopping at one retailer,”reports Brian Field. “If you want to find out how to predict what your customers are going to buy this year, you should check out Sensormatic’s retail consulting and analytics.”
Overall, online spending has remained sturdy in the past few weeks as shoppers have increased their purchases on credit and embraced “buy now, pay later” services that don’t carry interest charges but do carry late fees.
This can best be summed up by the recent data from Adobe, which indicates that online retail sales were essentially flat for the first three weeks in November. This modest uptick shows that consumers are eager for the holiday season with uncertainty about the economy.
Despite the slowdown in consumer spending, Walmart says they have seen a rise in sales. Target, Kohl’s and Macy’s are seeing a decrease in sales.
“At the moment, we’re seeing inflation really take a toll on the average consumer and that these individuals are amassing more debt at this point in time. There’s more pressure for consumers to purchase cheaper alternatives, which is an issue for retail businesses.” said Guru Hariharan, founder and CEO of CommerceIQ, adding
The cyberMonday sales this year come amid a wider e-commerce slowdown that’s affecting online retailers. For example, Amazon has seen record revenue, but demand for its products has waned in recent weeks as the worst of the virus has eased and consumers feel more comfortable shopping at brick and mortar stores.
In response to the changes in the retail industry, the company changed its plan. The company has been scaling back warehouse expansion plans and is cutting costs by axing a few of their projects. Amazon is also stepping into this new era following in the steps of other tech companies and implementing mass layoffs within its corporate ranks. Andy Jassy, Amazon CEO, states that we will continue to cut jobs until early next year.
Shopify, a company that helps businesses launch e-commerce websites, laid off 10% of its staff this summer.