Neither inflation, supply chain challenges, credit card debt, nor the rising costs of living were able to stop the biggest Black Friday and Cyber Monday in history.
There is still so much uncertainty in today’s economy. Unemployment holds steady at 3.7% after hitting double digits (14.7%) during Q2 pandemic lockdown of 2020 and while the job market is improving, the tech sector saw massive layoffs. Inflation is only beginning to taper but credit card debt and the cost of living are both on the rise and domestic and Chinese supply chain issues brought upon by both inflation and new COVID surges threaten to topple the global economy. Still, none of these factors were able to prevent the largest Black Friday and Cyber Monday in eCommerce history.
As reported by Digital Commerce 360, this year’s Black Friday took in a record $9.12 billion in the US while Cyber Monday’s sales totals hit a record $11.3 billion. Black Friday was up 2.3% from 2021 and Cyber Monday grew 5.8%. eCommerce sales throughout the Cyber 5, the 5-day period from Thanksgiving Day to Cyber Monday itself, grew 4.4% over last year with figures reaching $35.27 billion.
Despite Inflation, Customers Still Spend
Unlike last year, where lower-than-anticipated figures were the result of retailers spreading out their sales throughout the year and the changing habits of consumers, 2022’s Black Friday and Cyber Monday saw a complete reversal. Retailers still spread out their discounts throughout 2022 but made sure to offer the best and biggest discounts for the beginning of the holiday season shopping rush. Retailers were also left with a surplus of goods as consumers tightened their wallets and purse strings throughout the year in response to inflation which, in turn, made it easier to offer even deeper discounts than in previous years.
Consumers spent a record $5.29 billion online on Thanksgiving Day (Nov. 24), up 2.9% over last year, exceeding the original Adobe Analytics estimate. During the first three weeks of November (Nov. 1-22), online sales decreased only 0.1% compared to the same period of Nov. 1-21 in 2021 as consumers were waiting for sales.
Buy Now, Pay Later
Inflation’s effect on consumers was that few were willing to spend high ticket amounts in one shot. Alternatively, many opted to use a buy now, pay later (BNPL) option if offered by their retailer of choice. Adobe Analytics reports show BNPL orders increased 78% on just Black Friday alone compared to the previous week from November 19th to the 25th.
With a credit and financing solution or a BNPL service, retailers can persuade shoppers to complete their purchases despite the hardships of today’s economy by allowing them to spread out their payments if they sell high-ticket merchandise or have high average order values. The use of BNPL services, such as PayPal Credit, Affirm, and Karma, is becoming increasingly popular as an alternative to bank payday loans, especially among those with poor credit or rebuilding their credit profile.
Ted Rossman, senior industry analyst at consumer financial services company Bankrate.com says: “Buy Now, Pay Later is an attractive proposition for many shoppers watching how they spend this holiday season. These plans are pushed aggressively online [at checkout]. BNPL [companies] often don’t charge interest, especially ‘four payments over six week’ plans.” This is in stark contrast to the 19.2% APRs that are being charged by credit card companies today which, according to Bankrate.com, is the highest APR since the company began measuring in 1985.
The Impact of Mobile Devices
Salesforce reported that mobile use also greatly contributed to the increases in customer spending. 78% of web traffic came from mobile devices and social media platforms accounted for 12% of all mobile traffic referrals in the US. The consumer public is apparently becoming more comfortable with using mobile devices for shopping; 48% of Black Friday online sales came VIA mobile devices, up 4% from 2021.
For the first time, mobile devices accounted for 51% of online sales during the five-day period, compared to 46% last year. Compared to Thanksgiving Day 2021, smartphones and tablets represented 55% of sales. 43% of Cyber Monday sales came from mobile devices, up from 40% last year. There was also an increase of 85% in the number of BNPL orders during the holiday period compared to the prior week, as well as an increase of 88% in dollars terms.
Online sales were driven primarily by paid search, which accounted for 28% of orders during the five-day period. Direct consumer traffic to retail websites, affiliate sites, and partners accounted for 18% of orders, followed by email at 17%, and organic search at 15%. The share of sales generated by social media clicks during the period remained below 5%, though it grew by 27% on an annual basis.
In-Store Shopping is Back
eCommerce wasn’t the only retail field to score big on Black Friday and Cyber Monday. With the COVID pandemic largely over in the mindsets of most Americans, shoppers returned to physical retail store locations. Sensormatic Solutions by Johnson Controls reported a strong turnout on Black Friday with in-store shopping increasing 2.9% versus last year. Curbside pickup, a service which saw industry-wide increases during the pandemic, was down 21% from 2021 with more shoppers opting to pick up their purchases in-person.
According to Mastercard SpendingPulse, Retail sales at U.S. stores (excluding automobile purchases) increased 10.9% over last year during the Thanksgiving weekend. In-store sales increased +10.5% year-over-year (YoY), while the eCommerce experienced a positive growth rate of 12.5% YoY from Thursday, November 24 through Sunday, November 27.
Holiday-related purchases amounted to $325.44 on average last weekend, up from $301.27 in 2021, with gifts accounting for $229.21. While retailers offered deeper discounts this year, an NRF survey of 3,326 adult consumers from Nov. 23-27 found that 90% of shoppers felt Thanksgiving weekend deals were as good as last year. Cyber Monday 2022 sales increased 20.0% from $9.42 billion in 2019. Sales increased 23.8% over the five-day holiday period, which increased 7.4% over 2019’s $28.5 billion.
Winning Categories
According to Adobe Analytics, 5 categories drove the bulk of online sales growth during Black Friday (versus an average October day):
- Toys (+285%)
- Smart Home Devices (+271%)
- Audio (+230%)
- Electronics (+221%)
- Exercise Equipment (+218%)
The hottest selling toys included Fortnite, Roblox, Bluey, Funko Pop!, and Disney’s Encanto. The gaming category was the most popular, with shoppers purchasing Xbox Series X, PlayStation 5, FIFA 23, NBA 2k23, and Pokémon Scarlet & Violet. Apple MacBooks and Dyson Airwrap and vacuum products were also among the top-sellers.
US consumers spent $11.3 billion in online sales on Cyber Monday, making it one of the biggest bargain days of the year. Adobe’s projections for one-day retail web sales were on target, with a growth rate of 5.8% year over year.
Deep discounts led to big Cyber Monday sales in these following categories:
- Toys (+684% than on an average October day)
- Sporting Goods (+466%)
- Appliances (+458%)
- Books (+439%)
- Jewelry (+410%)
- Electronics (+391%)
- Computers (+372%)