Nov 28 (Portal) – Deep discounts on everything from beauty products and toys to electronics over the Thanksgiving weekend lured U.S. shoppers to spend about $38 billion online, pointing to a strong holiday shopping season even as the economic one There was uncertainty.
According to data from Adobe Analytics, online consumer spending rose 7.8% during Cyber Week, the five days from Thanksgiving to Cyber Monday, exceeding initial expectations for a 5.4% increase.
Ahead of the crucial shopping season, industry forecasters including Deloitte and retailers such as Walmart (WMT.N) and Macy’s (MN) warned of cautious consumer spending due to budgets constrained by inflation. But blockbuster deals helped bargain hunters.
“I don’t think we’re seeing great sales numbers, but I think expectations have been suppressed to the point where this was kind of expected, if not a little bit better,” said Jim Tierney, chief investment officer at AllianceBernstein.
More than 200 million shoppers shopped both in-store and online over the Thanksgiving weekend, the National Retail Federation (NRF) said Tuesday, up nearly 2% from a year ago and exceeding the trade association’s estimates of 182 million .
“It seems like individuals are becoming a little more price conscious this season. From a retailer perspective, it’s probably worth discounting a little more and seeing if the consumer responds accordingly,” said Jeffrey Roach, chief economist at LPL Financial.
“It seems like retailers are expecting consumers to continue buying holiday gifts,” said Brian Mulberry, client portfolio manager at Zacks Investment Management, which owns shares of Amazon and Walmart. “It will be an interesting indicator to gauge whether these discounts will be significantly expanded over the next week or two to try to attract consumer spending of any kind.”
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But with about half of Americans’ holiday shopping going unused, the NRF stuck to its forecast for retail sales growth of 3 percent to 4 percent throughout the November-December holiday season, saying shoppers would continue to look for big promotions and bargains .
On average, consumers spent $321.41 on holiday shopping, including toys, electronics and gift cards, over Thanksgiving weekend, compared to $325.44 last year, the NRF data showed.
“I think we’re seeing a bet from consumers that there will be deals before the holidays…there’s optimism for the holidays, it’s just a different spending pattern than what we’re used to,” Dave Peacock, CEO of Advantage Solutions, said. a consulting firm that works with retailers including Walmart.
“There will be an opportunity, a consumer looking for value through the end of the shopping season,” said Tanger CEO Stephen Yalof. With Christmas falling on a Monday this year, he predicted shopper traffic would be stronger “throughout the selling season” than in 2022.
Discounts of up to 31% on electronics and 27% on toys, as well as the ability to make last-minute purchases from the comfort of home, have given online sales an edge over in-store shopping.
The number of online shoppers rose 3.1% to 134.2 million over Thanksgiving weekend, offsetting a slight decline in the number of customers visiting brick-and-mortar stores. According to the retailer, there were about 121.4 million in-store shoppers during that period, up from 122.7 million in 2022.
“What I’m not hearing about is the one overwhelming gift or the five overwhelming gifts like we’ve had in the past,” Tierney said. “That benefits Amazon to a certain extent, considering it’s us.” “Shopping isn’t just seen on a big day anymore,” he said.
“If there isn’t that one hot thing, it’s to Amazon’s advantage that consumers’ desires are broad enough, and when they’re ready to buy, it’s broader than just a weekend.”
According to Salesforce, which derives its online traffic and spending benchmarks from data flowing through its e-commerce service Commerce Cloud, U.S. shoppers spent about $70.8 billion online over this year’s Thanksgiving weekend, which corresponds to an increase of 4.1% compared to 2022.
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“BUY NOW, PAY LATER” LEADS TO HIGH ONLINE SPENDING
To protect their Christmas budget, shoppers are also turning to BNPL (Buy Now, Pay Later) services such as Klarna or Affirm to avoid the additional fees and interest that come with credit card payments.
A record $940 million in purchases were made via BNPL on Cyber Monday, up 42.5% year over year and up 18.8% from Adobe’s previous estimate, as consumers took advantage of the flexible payment option . Adobe tracks transactions through its Experience Cloud service, which powers retailers’ e-commerce platforms.
Payments company Block (SQ.N) noted that BNPL transactions through Afterpay rose 19% over the weekend, adding that online shopping cart sizes were 3.9 times larger than in-person shopping.
Klarna also said it saw a 29% increase in orders from US shoppers on Black Friday.
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Reporting by Deborah Sophia, Juby Babu and Ananya Mariam Rajesh in Bengaluru and Kate Masters and Amina Niasse in New York; Editing by Devika Syamnath and Aurora Ellis
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