Why Both Black Friday and Cyber Monday Were Disappointing This Year

Holiday shopping on Black Friday and online over the weekend culminating in Cyber Monday was down compared to the previous year for the first time ever.

Strong demand gave merchants less incentive to offer discounts, while fears of supply chain impact on availability caused many consumers to shop earlier, spreading out the sales over a longer period of time. Overall sales are still expected to be strong this season, but the old reliance on two days may become obsolete. JL

Charity Scott reports in the Wall Street Journal and Lisa Lacy Reports in Ad Week:

For the first time ever, total online spend on Black Friday dropped - to $8.9 billion. With spend on Thanksgiving Day flat at $5.1 billion, 2021 is the first year both days did not see an increase year-over-year. Online sales were flat throughout Cyber Monday, as smaller discounts gave shoppers less incentive to spend. Supply-chain disruptions have made it difficult for some retailers to keep their shelves stocked, spurring consumers to begin their holiday shopping early. “Shoppers are being strategic in their gift shopping, buying much earlier in the season."

Ad Week

 

Forget about smashing any records this year.

For the first time ever, total online spend on Black Friday dropped slightly to $8.9 billion.

American consumers had spent $6.6 billion as of 9 p.m. ET en route to a projected total of $8.8 billion to $9.2 billion, per Adobe’s Digital Economy Index. However, the final figure rang in at the lower end of the predicted range—and less than the total overall spend in 2020.

With spend on Thanksgiving Day flat at $5.1 billion, Adobe noted 2021 is the first year both days did not see an increase year-over-year (YoY) and it’s “another sign consumers started to shift their spending to earlier in the season, responding to promotions and deals from retailers that started in October.”

Indeed, Salesforce found U.S. sales for the first three weeks of November are up 10% YoY as consumers shopped early to avoid shipping delays and supply chain issues.

“We are on track for record online sales during Cyber Week,” Rob Garf, vp and general manager of retail at Salesforce, said in a statement. “That said, with people getting back into physical stores and making purchases earlier in the holiday season, demand is smoothing out beyond the typical peak shopping days.”

Vivek Pandya, lead analyst at Adobe Digital Insights, agreed.

“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,” he added in his own statement.

Cyber Monday

Adobe still anticipates Cyber Monday will be the biggest online shopping day of 2021 with a projected total of between $10.2 billion and $11.3 billion in online spend. However, that could still fall short of last year’s record of $10.8 billion.

Adobe nevertheless predicts online sales will hit $207 billion for the holiday season overall, which would mark a 10% increase YoY and set a new holiday shopping record for the period it defines as Nov. 1 to Dec. 31. That’s in part because consumer spend has surpassed $2 billion every day so far this season, as well as 19 days over $3 billion. At this point in 2020, there had been just five days that hit the latter mark.

For its part, ecommerce platform Shopify saw $2.9 billion total sales worldwide on Black Friday, which is an increase of 21% compared to 2020. Top-selling cities included London, New York and Los Angeles, while the top-selling product category was apparel and accessories.

“Consumers have been shopping strategically this season: Buying early and taking advantage of deals retailers have been promoting since late October,” said Taylor Schreiner, director of Adobe Digital Insights, in a statement. “Black Friday still remains a major online shopping day, but the surge in online shopping is coming from the less marketed days of the season.”

Thanksgiving

Meanwhile, Thanksgiving sales of $5.1 billion mark just a slight increase over 2020.

That’s according to Adobe, which noted the total was at the lower end of its predicted range for online spend.

With people getting back into physical stores and making purchases earlier in the holiday season, demand is smoothing out beyond the typical peak shopping days.

Rob Garf, vp and GM of retail, Salesforce

Figures from Salesforce were higher, with nearly $7 billion spent online on Thanksgiving Day in the U.S. (up 1% YoY) and $30.7 billion globally.

Here’s a look at other 2021 trends:

Categories

According to Adobe, the most popular products sold online on Black Friday included toys from brands like Barbie and Star Wars, as well as kitchenware such as air fryers and Instant Pots.

Per Salesforce, which tracked popular categories during Cyber Week, the list includes luxury handbags, furniture and footwear.

Big box

Smaller retailers have seen a lower boost compared to large retailers, or those with more than $1 billion in annual revenue. The latter has seen 22% higher revenue growth on average since October.

“Larger retailers have been able to offer a broader set of products and keep shoppers on their sites and apps even if they don’t find the first thing they are looking for,” Adobe said.

Out of stocks

Out-of-stock messages are up 124% in November compared to pre-pandemic levels. As of Nov. 26, Adobe found consumers are seeing the highest out-of-stock messages for appliances, electronics, housekeeping supplies, and home and garden items.

Mobile

Shoppers used smartphones to complete 44% of online sales on Black Friday, which is up nearly 11% YoY. However, smartphones accounted for 62% of visits to ecommerce sites, which Adobe said shows consumers still prefer to browse on mobile and convert on desktop.

Curbside

So far this holiday season, curbside pickup is up 70% compared to 2019, or the pre-pandemic period. That year, consumers spent $7.4 billion on Black Friday, which was a U.S. record at the time.

Inflation

From Nov. 23-25, the average selling price increased 22% in the U.S. and 7% globally compared to the first three days of Cyber Week 2020, Salesforce said.

“Consumers may not be winning the game of discount chicken this year,” Garf added. “With products still stuck in ports and margins being squeezed, consumers looking for deep discounts are going to be disappointed. The average discount over the first few days of Cyber Week is down 8% compared to last year.”

Buy now pay later (BNPL)

While BNPL growth has slowed in recent weeks, Adobe said BNPL revenue through November is up 422% compared to 2019 and orders are up 438%.

Salesforce, too, found increased prices are spurring shoppers to finance holiday purchases with BNPL, although its figures are lower. Per Salesforce, consumers have used BNPL on 8% of all Cyber Week orders as of Thanksgiving Day, which is up 31% YoY.

Wall Street Journal U.S. online sales were flat throughout Cyber Monday, as smaller discounts gave shoppers less incentive to spend, but analysts say sales could finish slightly higher than last year by the time West Coast shoppers finish for the night.

Shoppers spent $7.1 billion online as of 9 p.m. eastern time in the U.S., according to transaction data compiled by the Adobe Digital Economy Index. Shoppers are expected to spend between $10.4 billion and $11.1 billion on Cyber Monday, Adobe said. American consumers spent $10.8 billion online last year.

The figures are in line with online retail sales for the Thanksgiving holiday weekend, which failed to surpass the previous year’s sales for the first time in years, according to some industry estimates. Overall, U.S. retail sales rose 14% during the Thanksgiving weekend compared with last year and 5.8% from 2019, according to data released by Mastercard SpendingPulse.

U.S. shoppers have been eager to return to stores, with many big-box retailers, discount chains and department stores seeing foot traffic surge on Black Friday. Placer.ai, an analytics firm that uses mobile-device location data to measure foot traffic, said foot traffic at indoors malls rose 83.5% from 2020, although the surge of in-person shopping wasn’t enough to surpass pre-pandemic level.

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The return to physical stores comes amid a new threat to the U.S. pandemic recovery. The World Health Organization said Friday that the Omicron coronavirus strain is a global “variant of concern,” and U.S. health officials say it is likely already in the country.

Online discounts were also lower on Monday compared with last year, with smaller promotions across electronics, appliances, apparel and sporting goods, Adobe reported. Supply-chain disruptions have made it difficult for some retailers to keep their shelves stocked, spurring consumers to begin their holiday shopping early. Out-of-stock messages are up 169% through Sunday compared with pre-pandemic levels, Adobe said.

“With a large part of the day complete, consumer spending on Cyber Monday is not growing as fast as it did last year,” Vivek Pandya, a lead analyst for Adobe, said in a statement. “While the spending may pick up during the evening hours on the West Coast, it reaffirms that many consumers had fulfilled their shopping urge earlier in the season.”

Sixty-one percent of shoppers surveyed by the National Retail Federation, a trade group, said they had started their holiday shopping before Thanksgiving, up from 51% a decade ago.

 

Some shoppers are searching for items so scarce, they couldn’t wait for Black Friday to go shopping in stores.

Logun Keller, 39 years old, purchased a Sony PlayStation 5 online last week after looking for six months. Mr. Keller, of Sacramento, Calif., who purchased his console from Amazon.com after many false starts, said that most retailers aren’t prepared to deal with bots and the scalpers that use them to buy and flip popular videogame systems but that shopping online does have its advantages.

“Having access to multiple companies at once and not relying on driving to brick-and-mortar stores is a big improvement,” he said.