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Deep Discounts Fuel Cyber Monday to Record $11.3B in Revenue

Discount-seeking consumers loaded up on gaming consoles, smart TVs, tablets and more as Cyber Monday sales grew 5.8 percent in the U.S. to $11.3 billion, with shoppers spending as much as $12.8 million per minute in the peak hour of 8 p.m. to 9 p.m. Pacific time, according to the latest Adobe Analytics figures.

On a global scale, Salesforce said Cyber Monday sales totals reached $46.2 billion on 4 percent growth. Its U.S. tally was more bullish than Adobe’s, calculating 8 percent growth on the day to $12.2 billion.

On Cyber Monday, Adobe said online spending was driven by toys, where online sales grew 684 percent compared to an average day in October 2022, as well as perennial favorites including electronics (up 391 percent) and computers (up 372 percent). Other categories with strong demand included sporting goods (466 percent growth), appliances (458 percent), books (439 percent) and jewelry (410 percent). 

Apparel wasn’t listed as a top-growing category when compared to October figures, but was instead more known for its deep discounting. The category saw an average markdown of 18 percent on Cyber Monday, deeper than the prior-year discounts of 13 percent.

During the day, consumers found deals in electronics, (25 percent), toys (34 percent), computers (20 percent) and televisions (17 percent).

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As retailers take more steps to purge their inventory glut, it appears the discounts are working in their favor.

In tracking the status of roughly 1 million products since the start of Thanksgiving week, 7 percent of products that were live a week ago are now out of stock, according to FindMine, an AI-based platform designed to help retailers automate the “complete the look” in the apparel recommendation process.

This number is up from 5 percent at the same time last year, indicating that site-wide discounts are enticing shoppers to buy. Interestingly, despite retail’s constant harping on markdowns over the year, FindMine said that the percentage of individual products labeled as “On Sale” versus those marked “full-price” has remained largely unchanged.

“Based on our findings to date, retailers aren’t marking down any new individual products as the days go on—rather opting instead to introduce site-wide discount codes, which are subject to change daily,” said Michelle Bacharach, CEO of FindMine. “Consumers are increasingly choosing sale products over full-price ones, where their dollars go further for having stacked a discount. For retailers, it’s a delicate balance to try and clear excess inventories that have been clogging balance sheets while also protecting margins and maximizing profits. Consumers who wait might do well as the season wears on but risk missing out on hot products as retailers aim to clear the shelves.”

Not all brands went fully promotional as companies with strong followings have strayed from discounts, according to analysis from Cowen managing director John Kernan.

“While many promotions were planned in advance and accounted for within Q4 guidance, some are telling nonetheless,” Kernan said in a research note to clients. “Our checks suggest Lululemon, Hoka and Yeti were the most full-priced in our coverage during the holiday weekend, while Ralph Lauren digital traffic data remains robust vs. expectations and guidance. Off-price positioned stores and marketing effectively to highlight values relative to full-price stores and gifting opportunities.”

Kernan said that the most promotional brands and retailers relative to their history largely came from athleticwear and footwear, with names including Adidas, Skechers, Allbirds, Under Armour, Vans, Nike and Puma.

Cyber Week, which comprises Thanksgiving through Cyber Monday, brought in $35.27 billion overall, up 4 percent annually, according to Adobe Analytics. The day capped off what was a fairly tepid increase in online sales across Thanksgiving, which grew 2.9 percent to $5.29 billion, and Black Friday, which inched up 2.3 percent to $9.12 billion. Salesforce, which also accounted for Tuesday and Wednesday in its Cyber Week sales, said the week brought in $262.4 billion globally, on 2 percent growth.

It appears consumers really did commit to spending more throughout November as opposed to waiting until the peak selling weekend. Across Nov. 1 to Nov. 28, consumers have spent $107.7 billion online, up 8.7 percent from these dates across November 2021, Adobe said. With discounts coming earlier and more frequently, 20 days topped $3 billion, with eight more days generating between $2 billion and $3 billion in daily online spend. Adobe expects the full holiday season (Nov. 1 to Dec. 31) will hit $210.1 billion, growing 2.75 percent on an annual basis. 

Should inflation take full credit for the sales increase?

Adobe argued that strong consumer spending across Cyber Week was driven by net-new demand, and not just higher prices. The Adobe Digital Price Index (DPI), which tracks e-commerce prices across 18 categories, indicated that online prices have been “nearly flat” in recent months, and down 0.7 percent on a year-over-year basis in Oct. 2022.

The tech giant says that its figures are not adjusted for inflation, but if online inflation were factored in, there would still be growth in underlying consumer demand.

“With oversupply and a softening consumer spending environment, retailers made the right call this season to drive demand through heavy discounting,” said Vivek Pandya, lead analyst, Adobe Digital Insights. “It spurred online spending to levels that were higher than expected, and reinforced e-commerce as a major channel to drive volume and capture consumer interest.”

But Salesforce’s data runs counter to Adobe, both in the U.S. and globally. In the U.S., average order value (AOV) grew 4.3 percent to $116 on Cyber Monday, while units per transaction dropped 5 percent. For the total of Cyber Week, AOV increased 1.7 percent while units per transaction dipped 3 percent. Whether demand is still there or not, this information illustrates that consumers are getting less bang for their buck.

NRF: Inflation didn’t stop record turnout

As the debate rages on about how much inflation is impacting the consumer, that hasn’t stopped more people from shopping during Thanksgiving weekend. According to a survey from the National Retail Federation (NRF) and Prosper Insights & Analytics, a record 196.7 million Americans shopped in stores and online from Thanksgiving Day through Cyber Monday.

The total surpassed the association’s initial expectations by more than 30 million shoppers, and grew more than 17 million since last year. It marks the highest figure since NRF first started tracking this data in 2017.

More than 122.7 million people visited brick-and-mortar stores over the weekend, up 17 percent from 2021. The number of online shoppers also grew, albeit at a slower pace. This year saw 130.2 million online shoppers, a 2 percent increase.

“The Thanksgiving holiday shopping weekend is a tradition treasured by many American families,” said NRF President and CEO Matthew Shay. “As inflationary pressures persist, consumers have responded by stretching their dollars in any way possible. Retailers have responded accordingly, offering shoppers a season of buying convenience, matching sales and promotions across online and in-store channels to accommodate their customers at each interaction.”

Consumers spent an average of $325.44 on holiday-related purchases over the course of the weekend, up 8 percent from $301.27 in 2021. Of that amount, most ($229.21) was directed specifically toward gifts.

The vast majority of the 3,326 consumers surveyed (90 percent) felt the deals were the same or better than last year.

In line with the Adobe data, which suggested consumers were shopping earlier in November,M more than half (56 percent) of shoppers said they took advantage of early holiday sales or promotions before Thanksgiving this year. One-quarter (24 percent) did so before Nov. 16 and another 36 percent shopped in the week leading up to Thanksgiving (Nov. 16-23).

“While Thanksgiving is no longer the starting point for holiday shopping, the five-day shopping period still plays an important role in the overall holiday season,” said Phil Rist, executive vice president of strategy, Prosper. “On average, consumers say they are almost halfway (47 percent) done with their holiday shopping at this point in time, leaving plenty of room for additional purchases in the remaining weeks of the year.”

The NRF is still maintaining its initial expectations for holiday sales throughout Nov. 1 through Dec. 31, forecasting that retail sales will grow between 6 percent and 8 percent over 2021 to between $942.6 billion and $960.4 billion.