After enjoying their Thanksgiving dinner, American consumers set aside their economic concerns and embarked on a three-day online shopping frenzy, totaling $236 billion, surpassing analysts’ expectations and kicking off the holiday shopping season.
According to Adobe Analytics, which tracks online retail website visitor data, by 6:30 p.m. Eastern Time on Monday, the online spending for the day had grown by 4.5% compared to last year, reaching $91 billion. Adobe predicts that by the end of Cyber Monday, American consumers’ online shopping expenditure will range from $139 billion to $142 billion, with a potential increase of up to 6.3% from last year. It is traditionally the biggest online shopping day in the United States.
Adobe’s statistics show that this year’s online sales on Black Friday reached $118 billion, a 9% increase from last year, setting a new record high. Including the five days starting from Thanksgiving, the total online spending is estimated to reach around $437 billion.
Global markets are showing a similar trend. According to Salesforce, as of noon Eastern Time, global consumers have already spent $173 billion on Cyber Monday, a 5.3% increase from the same period last year. The company predicts that the total global spending for the day will reach $527 billion, a 6% increase from last year.
Despite initial mixed expectations for consumer spending over the Thanksgiving weekend due to soft consumer confidence and rising prices, affluent consumers have been generous in their spending, while others have made room in their limited budgets to purchase gifts for loved ones. Significant discounts have also helped attract buyers, leading to a shopping frenzy beyond expectations.
Mark Mathews, chief economist of the National Retail Federation, stated, “Holiday shoppers are spending wallets, not emotions,” indicating that consumer behavior remains steadfast despite soft consumer confidence. Mathews also pointed out that despite recent pressures such as the government shutdown, other economic indicators like wage growth remain strong.
Analysts at Kantar, a consumer research company, noted a decrease in impulse shopping this year based on shopper surveys and store visits. Moreover, in-store promotions at retailers like Walmart and Target featured clearer, more specific, and detailed discount language compared to previous years.
Rachel Dalton, Director of Retail Insights at Kantar, stated that this reflects shoppers being “vigilant to avoid being misled.”
On the other hand, low-income shoppers who have exhausted government aid received during the pandemic are finding ways within tight budgets to purchase gifts. Consequently, many retailers have extended the range of discounts compared to previous years.
Jack O’Leary, Director of eCommerce Research at consumer intelligence company NielsenIQ, mentioned that some stores have extended Black Friday discounts to items that don’t usually go on sale, such as essential household goods. Amazon, for example, offered discounts of 30% to 60% on items like headphones, computers, and batteries, indicating a proactive approach to stimulating demand.
As financial conditions tighten, short-term loan services like Affirm and Klarna are becoming increasingly popular.
Research from CivicScience found that 38% of respondents used Buy Now Pay Later (BNPL) services for at least one purchase over the Black Friday weekend, with the majority being young, low-income shoppers.
Adobe’s data shows a 9% increase in BNPL usage on Black Friday compared to last year. For Cyber Monday, Adobe expects BNPL usage to exceed $10 billion, a 5% growth from last year.
Meanwhile, consumers are actively using chatbots and other AI features to compare prices and obtain discounts.
Adobe predicts that AI-driven retail website traffic will increase nearly eightfold from last year, as AI shopping assistants like Walmart’s Sparky or Amazon’s Rufus were nonexistent at that time.
CivicScience found that 40% of survey respondents used AI tools over the weekend for shopping assistance or decision-making. Among the “heavy users” who heavily rely on AI for shopping, 87% are under the age of 45.