Nov 28 (Reuters) – Huge discounts on everything from beauty products and toys to electronics over the Thanksgiving weekend prompted U.S. shoppers to splurge about $38 billion online. Despite the economic uncertainty, the year-end sales season remained strong.
According to data from Adobe Analytics, online consumer spending rose 7.8% during Cyber Week, or the five days between Thanksgiving and Cyber Monday, exceeding the originally expected 5.4% increase.
Ahead of the crucial shopping season, industry forecasters including Deloitte and retailers such as Walmart (WMT.N) and Macy’s (MN) say consumer spending is likely to slow as inflation is subdued and budgets are rigid. He warned me to be careful. But the blockbuster product helped bargain hunters.
“I don’t think the sales numbers were great, but I think they were well underwhelmed and in some ways expected rather than a little better,” said Jim Tierney, chief investment officer at AllianceBernstein. .
The National Retail Federation (NRF) announced Tuesday that more than 200 million shoppers shopped both in stores and online over the Thanksgiving weekend. This is up nearly 2% from last year and exceeds the industry group’s estimate of 182 million people.
“Personal price consciousness seems to have increased a little bit this season,” said Jeffrey Roach, chief economist at LPL Financial. We’ll have to see if we can do that or not.”
“Retailers seem to be counting on consumers to continue buying Christmas presents,” said Brian Mulberry, client portfolio manager at Zacks Investment Management, which owns stocks in Amazon and Walmart. “It will be an interesting indicator to determine whether discounts widen significantly over the next week or two to attract all kinds of consumer spending.”
Still, with about half of Americans’ holiday shopping remaining untouched, NRF is sticking to its forecast of a 3% to 4% increase in retail sales over the entire November-December holiday season, with shoppers He said he continues to look for big promotions and bargains.
Consumers spent an average of $321.41 on holiday-related purchases such as toys, electronics and gift cards over the Thanksgiving weekend, compared to $325.44 last year, according to NRF data.
“I think consumers are looking at a bet that there will still be sales going into the holiday season… There is an optimism around the holiday season, which is different from what we are used to. They just have different spending patterns,” CEO Dave Peacock said. Advantage Solutions is a consulting firm that works with retailers such as Walmart.
“There will be an opportunity for consumers to pursue value until the end of the shopping season,” said Steven Yarov, CEO of Tanger. With Christmas falling on a Monday this year, he expected shopper traffic levels to be higher than in 2022 “throughout the shopping season.”
Huge discounts of 31% on electronics and 27% on toys, and the ease of last-minute purchases from the comfort of your home, make online sales more advantageous than in-store purchases.
Online shoppers rose 3.1% to 134.2 million over the Thanksgiving weekend, offsetting a slight drop in the number of customers visiting physical stores. There were about 121.4 million in-store shoppers during the period, down from 122.7 million in 2022, the retail group said.
“We’re not hearing about one explosive gift or five explosive gifts like we’ve done in the past,” Tierney said. We no longer shop only on big days,” he said.
“Even if there isn’t a single hot product, Amazon has a good advantage because consumers are looking for a wide enough range of things that their buying intent is broader than just one weekend.”
U.S. shoppers spent about $70.8 billion online this Thanksgiving weekend, according to Salesforce, which derives benchmarks for online traffic and spending from data flowing through the company’s Commerce Cloud e-commerce service. It is said to have increased by 4.1% from 2022.
‘Buy now, pay later’ drives big spending online
Shoppers are also turning to ‘buy now, pay later’ (BNPL) services such as Klarna and Affirm to avoid additional fees and interest associated with credit card payments to pad their Christmas budgets .
A record $940 million worth of purchases were made through BNPL on Cyber Monday, up 42.5% year-over-year as consumers took advantage of flexible payment options, exceeding Adobe’s initial forecast of an 18.8% increase . Adobe tracks transactions through its Experience Cloud service, which powers retailers’ e-commerce platforms.
Payments company Block (SQ.N) noted that BNPL transactions through Afterpay surged 19% over the weekend, adding that online shopping cart sizes are 3.9 times larger than in-person shopping.
Klarna also said it saw a 29% increase in orders by US shoppers on Black Friday.
Deborah Sofia, Jubee Babu and Ananya Mariam Rajesh report from Bangalore, and Kate Masters and Amina Niasse from New York. Edited by: Devika Syamnath and Aurora Ellis
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