Everything riding on Cyber Monday as online sales on Black Friday deliver mixed results

Stuart Lauchlan Profile picture for user slauchlan November 29, 2021 Audio mode
Not quite out of the pandemic's influence, Cyber Week has resulted in some up-and-down numbers this year...

Man looks at Black Friday e-commerce offer on laptop and mobile © Proxima Studio - shutterstock

So how did we do on the Black Friday front? Did the COVID-powered online boom carry on? Or were we all excited to get into the stores? The answer? Who really knows? There are already a lot of assessments of how things went late last week, but the only consistent message seems to be that there’s a lot riding on today, the so-called Cyber Monday.

According to Adobe’s predictions via its Digital Economy Index, US Black Friday spending was supposed to be between $8.8 billion and $9.2 billion. In reality, according to the firm’s data today. online spending on Black Friday fell slightly to $8.9 billion, compared to the record $9 billion reported last year.

More than that, it seems that, according to Adobe’s number crunching, this year was the first time both Thanksgiving and Black Friday online spend did not go up year-on-year. Leaving aside the idea that that was almost certainly something that had to happen at some point, what are the likely reasons behind this?

Well, first up, every retail commentator for months has been urging consumers to get out there and shop early. As a result, Cyber Week is more probably accurately referred to as Cyber-since-around-September! According to Adobe’s numbers, online shoppers in the US had already spent $7.6 billion from the start to November through to Thanksgiving, up 20% on a year ago.

Punters are also concerned about inflationary rises and the lack of major discounting on the part of key retailers this year. Adobe’s Digital Price Index at the start of the month revealed that US shoppers had been hit by the 17th consecutive month of e-commerce price rises. Rather than prices declining into the Holidays, the big deals of old just haven’t come through this year.

Then there’s the supply chain crisis. We saw last week how badly damaged Gap has been by this and it’s inevitable that others will follow suit. According to Adobe’s numbers, out-of-stock messages have increased 124% since January 2020 and 172% since 2019, with appliances and electronics most affected due to a chip shortage.

Vivek Pandya, lead analyst at Adobe Digital Insights, commented:

For the first time, Black Friday saw a reversal in the growth trend of past years. Shoppers are being strategic in their gift shopping, buying much earlier in the season and being flexible about when they shop to make sure they get the best deals…After 17 consecutive months of online inflation, we are entering a new normal in the digital economy.

On the other hand...

Data from Salesforce is slightly different. The firm reports that as of mid-day Eastern Time on Black Friday, US online shoppers had in fact spent more, 7% more, than the comparable time in 2020. Salesforce had originally projected that the spend would be flat year-on-year.

Other data from Salesforce found that shoppers were disappointed by the bargains on offer this year, with the average discount over Cyber Week was 23% globally of usual price, down 8% in previous years. The Average Selling Price (ASP) over Cyber Week (Tuesday-Sunday) has been up 6% globally compared to last year. In the US alone, ASP rose 22% over the first three days of 2021’s Cyber Week.

What has changed in 2021 is that more physical stores are opened than at this time last year. So have shoppers moved away from the keyboard and back to the aisles? It’s not entirely clear. Many retailers in the US this year chose to remain shuttered on Thanksgiving day itself, driven by a combo of COVID concerns and a shortage of staff

But when stores reopened on Black Friday itself, consumer visits were up by 47.5% compared to 2020, but down by 28.3% compared to the ‘old normal’ of 2019, according to data from Sensormatic Solutions. In other words, it’s better than last year, but down over a quarter on pre-COVID times. According to Brian Field, Senior Director, Global Retail Consulting of Sensormatic Solutions.:  

While in-store shopping is still not back to 2019 levels, more shoppers felt comfortable visiting stores in person this Black Friday than in 2020. One driver of this increased traffic could be ongoing supply chain challenges and shipping delays, which are resulting in consumers shopping earlier to ensure their gifts arrive on time. With ongoing staffing challenges due to the labor shortage, retailers can leverage data-driven solutions to ensure their stores are appropriately staffed and shelves are stocked during anticipated busy shopping days…Retailers kicked off holiday deals early this year to spread traffic peaks out throughout the season, helping to avoid crowded stores on Black Friday, better track and plan inventory, and create an improved holiday shopping experience.

So what’s to come today, Cyber Monday (and beyond)? Field says:

With concerns about supply chain delays, we expect to see consumers make the most of in-store shopping opportunities. Coupled with unified commerce options like buy online, pick up in-store and pickup at curbside, consumers can ensure they are getting their holiday shopping done when and where it’s most convenient and in using fully integrated inventory intelligence retailers can feel confident in the accurate data powering each shopping channel.

For their parts, Adobe and Salesforce are both betting on Cyber Monday to be the boom day of Cyber Week. Adobe expects $10.2 billion to $11.3 billion estimated in online spending, against last year’s  record of $10.8 billion in online purchases, while Salesforce is projecting $11 billion spend, flat year-on-year. We shall see...

My take

No complete picture just yet, but the data from Adobe and Salesforce reflect a retail market in flux, not clear yet of the pandemic  - and thanks to Omicron for its timing! - but not having to deal with a consumer base under total house arrest.

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