With the Christmas season officially underway, US sales experienced increased spending as shoppers sought the best discounts.
It’s that period of the year again for discounted online shopping in the US, albeit one that might likely feature a higher number of penny-pinching consumers. The reason for a plausible rise in prudent shoppers at 2022’s Black Friday and Cyber Monday shopping bonanzas is the state of the economy. The US and several other global economies are going through one of the most challenging inflation periods in decades. This unsavory period has seen central banks such as the Federal Reserve hike interest rates repeatedly. So far in 2022, the Fed has raised interest rates by 0.75 basis points several times to rein in inflation. Therefore, it is hardly surprising that this Fed development is a significant talking point for how consumers spend during the latest sales period.
However, despite the cash crunch on consumers, this year’s Black Friday has seen online sales hit over $9 billion, a record high. According to Adobe Analytics, consumers who shopped online during 2022’s Black Friday spent an astonishing $9.12 billion. Furthermore, the record Black Friday sales came on the heels of another record $5.26 billion spent during the Thanksgiving break. Cyber Monday follows Black Friday, which typically marks the beginning of US Christmas shopping. According to preliminary estimates, this online shopping on the first weekday is already on course to hit a record high of $11.6 billion.
Demand, not Inflation Fears, Drove Black Friday & Cyber Monday Sales, Adobe Analyst Explains
Despite prevalent inflationary pressure, lead analyst at Adobe, Vivek Pandya, explained that the surge in spending was driven by demand. He also stated that shoppers found the steep discounts to be irresistible. Nearly every item, including clothing, electronics, jewelry, and toys, was offered during Black Friday and Cyber Monday at double-digit discounts. As a result, Pandya summarized the situation, saying:
“Given the macroeconomic headwinds and backdrop coming into the season for consumers, the big question was, ‘Would the strength of discounts be able to keep demand strong and have it be stable – on par with what we saw last year? What we are seeing is the discount being strong enough to entice consumers to continue to spend.”
Besides the increase in consumer spending tendencies at this year’s sales, inflationary pressure is also attributable to the overall higher sum. This means shoppers would have to spend relatively more money to procure items because prices rise faster than promotions in numerous categories.
Shopper Prudence for ‘Best Deals’
Amid the perceived spending increase, Brian Field of store traffic tracker Sensormatic Solutions also believes shoppers are more prudent. “Shoppers are being more thoughtful,” he explains, also adding they are comparing retailers to determine items worth procuring this year. Carol Spieckerman, president of consultancy Spieckerman Retail, also shares Field’s assessment. According to this business news today post by Coinspeaker, Spieckerman opines that prospective shoppers are holding out for the most favorable deals. She said, “Shoppers are waiting out the season in anticipation of deeper discounts and are less susceptible to shiny objects.”
According to Adobe, online spending will increase by 2.8% to $34.8 billion during the five days from Thanksgiving through Cyber Monday.