The holiday season is an auspicious time for retailers and the period when eCommerce takes center stage. The holiday spirit and the desire to find perfect deals propel people to shop more. According to the National Retail Federation (NRF), holiday e-commerce spending in 2023 was expected to reach between $273.7 billion and $278.8 billion, up from $255.8 billion in 2022, marking a 7% to 9% increase. The growth is fueled by strong consumer confidence, rising disposable incomes, and the undeniable convenience of online shopping.
Cyber Week Spending Set to New Highs
Despite the fact that Black Friday and Cyber Monday discounts are spread out more and more across the weeks leading up to and following Thanksgiving, both days were expected to see record spending levels once again this year.
Based on data from Adobe Analytics, Cyber Monday retained its position as the most significant day of the holiday shopping season, withgrowing 9.6% year-over-year (YoY) to $12.4 billion, and Cyber Week up 7.8% YoY to $38 billion. Online sales on Black Friday saw a growth of 5.7% to reach $9.6 billion, while Thanksgiving Day sales experienced a 5.5% increase, reaching $5.6 billion,which has nearly doubled since 2017.
Cyber Monday 2023 Shatters Records
Cyber Monday 2023 has surpassed all expectations, emerging as the most lucrative online shopping day in history. According to Adobe Analytics, the day concluded with a remarkable $12.4 billion in online sales, marking a substantial 9.6% year-over-year increase. This outstanding performance not only exceeded initial projections of $12 billion but also defied concerns about muted consumer discretionary spending.
Cyber Monday stands as a testament to the resilience of online retail, showcasing the ability of the digital marketplace to thrive in the face of economic uncertainties. As consumers continue to embrace online shopping, this record-breaking day marks a pivotal moment in the evolution of e-commerce.
Black Friday Reigned Supremacy
According to data, Black Friday online spending reached an all-time high of $9.8 billion, up 7.5% compared to last year. In contrast, Cyber Monday sales amounted to $12.4 billion, a 9.6% increase from 2022. This indicates that Black Friday was the clear winner in terms of sales, with Cyber Monday following closely behind. The data highlights the growing importance of both events in the holiday shopping season, as retailers offer substantial discounts and promotions to attract consumers.
Thanksgiving Breaks New E-commerce Spending Records
Thanksgiving Day e-commerce sales set a new record in online spending, according to analysis from Adobe Analytics. That sets the stage for the rest of the week, including Black Friday and Cyber Monday. According to Adobe, the $5.6 billion consumers spent online on Thanksgiving is a 5.5% increase over Thanksgiving 2022. The results are more impressive with a longer perspective. Online spending nearly doubled since 2017, when consumers spent $2.87 billion online shopping on Thanksgiving.
Boost in Consumer Confidence
The Consumer Confidence Survey reflects prevailing business conditions and likely developments for the months ahead. This monthly report details consumer attitudes, buying intentions, vacation plans, and consumer expectations for inflation, stock prices, and interest rates.The Conference Board Consumer Confidence Index increased in November, reflecting a recovery in the Expectations Index. However, the Expectations Index remains below 80 for a third consecutive month, a level that historically signals a recession within the next year. Around two-thirds of consumers surveyed still perceive a recession to be “somewhat” or “very likely” to occur over the next 12 months.
Deals Started Earlier, Shoppers Took Notice!
It certainly feels like holiday sales events kick off earlier every year. And data from Salesforce prove that thesis out, with retail discounts showing up earlier in 2023 versus 2022.
According to the National Retail federation, 55% of consumers took advantage of early holiday sales, and 35% engaged explicitly in shopping during the week leading up to Thanksgiving.
Advertising Were Costs On The Rise
Overall, there was a general uptick in advertising costs on Amazon in the days leading up to Black Friday compared to 2022, according to ad-tech provider Pacvue.The big difference between ad spend and CPC (cost per click) indicates that advertising on Amazon is generally becoming more competitive.
ROAS (return on ad spend) decreasing from 2022 is also a concerning trend for advertisers. But holiday spending will continue for a few more weeks. A PYMNTS Intelligence survey found that 57% of U.S. consumers plan to purchase in the weeks following Black Friday and through Christmas, up 2% from 2022.
Inflation Amplifies Cyber Week Sales Growth
Adobe’s sales figures for Cyber Week show strong spending growth, but they are not adjusted for inflation. If the data were adjusted for inflation, it would show even more robust spending growth, as prices were lower across Adobe’s wide range of categories. Salesforce data show that discounting significantly drove demand during Cyber Week, with retailers offering an average of 30% off.
The early start to holiday shopping has been a notable trend in 2023, with many retailers initiating holiday sales and promotions well before the traditional start of the holiday season. This trend is attributed to consumers’ desire to secure the best prices and deals, leading to a longer holiday shopping season that starts early and is expected to end late.
Surge in Average Selling Prices
Salesforce data show that the average selling price across all categories has grown 4% in 2023 versus 2022. But the increase varies significantly by each spending category. Growth was driven primarily by order volume, rather than inflation, signaling increased consumer demand for the first time in more than five quarters.
While there was a steady drumbeat of promotions early in the season, diligent and patient shoppers held out for – and got – attractive Cyber Week deals. This delivered a solid Cyber Week performance as consumers sought value and convenience.
Wrapping up
The Black Friday Cyber Monday shopping period has undoubtedly become a cornerstone of the retail calendar, a testament to its dynamic nature and profound impact on the industry.
Consumer behavior continues to evolve, shaping the retail landscape, and retailers are compelled to adapt and innovate to stay ahead of the curve. Retailers and brands that embrace creativity and meet consumers’ needs are the ones that thrive in this ever-changing retail environment.