It's Black Friday! Salesforce and Adobe crunch the numbers on a crucial Holiday season for retailers

Stuart Lauchlan Profile picture for user slauchlan November 24, 2023
Summary:
Salesforce and Adobe place their bets on how good or bad retailers can expect the coming days to be.

black friday

Right then, it’s Black Friday. So it’s time to brace for post-turkey online shopping frenzy, isn’t it?

Well, that’s the theory, but in recent years that focused attention on Friday has spread out, back down the calendar and across several weeks.

Add to that, the ongoing macro-economic environment and the downbeat prognostications of various retail bellwethers over the past week or so and 2023 is hard to read. 

As in previous years, diginomica is looking to two sets of data coming in, from Salesforce and Adobe respectively. Both vendors have produced analysis of retail activity over the Holiday period in the past that has had much in common, but also some striking divergences. This year looks to be no exception. 

Hesitant

Salesforce’s data found shoppers started early for the season, beginning to look for gifts in early October, pushing digital traffic up globally year-on-year by five percent. But crucially they weren’t putting their money where their eyes were as consumers browsed, took mental notes, but didn’t actually make their purchases - yet. The cautious consumer cited by so many retailers of late is still in play. As a result, while product views were up, actually sales declined. 

But this may result in pent-up demand, suggests the Salesforce worldview, with slow activity to date driving a high-volume Cyber Week as Black Friday and Cyber Monday deals kick in. Cyber Week is set to account for over a quarter of all Holiday purchases this year, predicts Salesforce.

As per Rob Garf, VP & GM of Retail at Salesforce:

Consumers are taking control of their budgets and seeking value as they shop this Holiday. With a quarter of all Holiday sales expected to take place during Cyber Week, this will be the time for retailers to pull out all the stops – including promotions, loyalty rewards, financing options, and personalized product recommendations to drive shoppers to buy.

And that consumer hesitation may well pay off as Salesforce predicts that discount rates are likely to reach 29% globally, on par with pre-pandemic levels.

Bargains

Adobe’s data, which covers over 1 trillion visits to US retail sites, 100 million SKUs, and 18 product categories, found that in the first 20 days of the Holiday season - 1st thru 20th November - consumers spent $63.2 billion online, up five percent year-on-year, with 17 out of those 20 days recording consumers spending over $3 billion online in one day. This is a new record, according to Adobe, and leads it to predict that despite rising the macro-economic climate,  consumers are willing to spend.  

The firm goes on to postulate that Cyber Week spending will be up 5.4% year-on-year and account for 16.8% of total Holiday season spend, generating $37.2 billion in online spend. Cyber Monday will be the biggest online shopping day at $12 billion, up 6.1%, while today is expected to bring in $9.6 billion, up 5.7%.  

In common with Salesforce, Adobe expects to see big discounts, with electronics leading the way in the early part of the Holiday season, peaking at 24% off list price. Toys and apparel follow close behind with 23% and 21% discounts already on offer. 

But the best is yet to come, suggests Adobe, predicting that today will offer the biggest discounts for televisions (22%). The best bargains for toys (35%) and apparel (25%) will be on Sunday, while Cyber Monday will have the best deals for electronics (30%) and furniture (19%).

Mobile

Both vendors agree on the importance of mobile devices to drive traffic, but differ on the actual scale. Salesforce saw US mobile traffic up by as much nine percent in the pre-Cyber Week period, while computer traffic fell by as much as 17%. Mobile devices (not including tablets) accounted for up to 81% of traffic pre-Cyber Week, although that figure had stabilized at 76% on the eve of Black Friday. Is this the calm before the storm?

Adobe’s numbers are more evenly split. For that first 20 days of the season, mobile traffic accounted for 48.73% of revenue compared to 51.27% for desktop or other. But mobile shopping continues to rise. In the first 20 days of November, 48.7% of online spend came through a mobile device, up from 45.5% in the comparable period last year, to account for $30.8 billion in online spend, up 12.4% year-on-year. Adobe predicts that mobile spending will hit a record $113 billion for the full Holidays season, up 13.7% year-on-year.

Living on the never never

Both sets of data also agree that there’s more use of alternative payment models, particularly around Buy Now, Pay Later [BNPL] solutions, such as Klarna and Afterpay. Salesforce’s numbers have this trend growing at five percent globally, while Adobe’s first 20 days analysis sees BNPL usage up 14.5% year-on-year, accounting for 44.9 billion. Adobe also notes that for the year to date - up to 20 November - BNPL has have risen 14.4% to represent $63.4 billion of online retail revenue. That’s a lot of consumers willing to live on the never never…

My take

Vivek Pandya, Lead Analyst, Adobe Digital Insights, sums up: 

All eyes are on the consumer as we near Cyber Week, given a Holiday season where shoppers are dealing with rising costs, and retailers are contending with an uncertain demand environment.

Let’s see where we are when the dust settles next week. 

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