With the inflation rate dropping steadily over the past few months, consumers more freely opened their wallets (or, rather, charged their credit cards) at a record pace on Black Friday.
According to Adobe Analytics, a record $9.8 billion was spent Friday, traditionally the day retailers enter the “black” and a bellwether for holiday sales. That’s up 7.5% in the U.S. year-over-year. In October, 2022, the U.S. inflation rate sat at 7.75%. Last month, it was 3.24%.
The major growth driver of Black Friday online sales was electronics, up 152% vs. average daily sales for October. Smart watches, TVs and audio equipment were the top items being purchased.
Following the billion-dollar success of the movie, Barbie toys were also popular, as were other toys such as Mini Brands and KidKraft playsets. Gaming consoles and games were also on the shopping list as were Bluetooth headphones, smartphones, skin care products, cookware sets and coffee makers.
The decline in online prices over the last year has created a favorable environment for consumers.
Vivek Pandya, lead analyst, Adobe Digital Insights
According to Adobe’s Digital Price Index, the level of consumer spend was driven by new demand rather than higher prices, with ecommerce outlets dropping prices consecutively for 14 months, down 6% year-over-year.
Adobe said it expected another $10 billion to be spend over the weekend ahead of Cyber Monday which it believes will be the biggest online shopping day of the day, predicting a record spend of $12 billion, up 5.4% year on year.
Cyber Week (the five days after Thanksgiving) is expected to generate a total of $37.2 billion in online spend, up 5.4% from last year. Thanksgiving Day itself saw a 5.5% annual increase in sales, reaching $5.6 billion.
“Black Friday re-asserted its dominance this season with record spend of $9.8 billion driven by new demand for the major sales’ day,” said Vivek Pandya, lead analyst, Adobe Digital Insights. “The decline in online prices over the last year has created a favorable environment for consumers with strong discounts this season that are tempting even the most price-conscious consumers.”
Elsewhere, research from Mintel of 2,000 internet users over the age of 18 found that 44% of U.S. consumers planned to shop during the winter holiday season to make the most of sales events with Black Friday and Cyber Monday proving the most popular for budget-focused buyers.
More than a quarter of shoppers (28%) said the two days had made it a critical shopping period because of price increases. 42% also admitted to purchasing fewer gifts while almost a quarter (24%) said they were focusing on buying from lower-priced retailers while pre-owned gift buying is also expected to be on the rise.
“To remain competitive, retailers must position sales and promotions throughout the season and consider personalized deals that are tailored to consumers’ preferences,” said Brittany Steiger, retail and e-commerce analyst at Mintel.
“Our research shows the most popular retail promotions are percentage-off discounts, Buy one Get One deals, gift card offers and free gifts with purchase. While direct communications and social media will have the farthest reach, partnering with third parties such as shopping portals can be a great way to consolidate deals into one place, making it easier for consumers to shop by deal,” added Steiger.
The influence of holiday ad spend
And in the battle for cosumers’ dollars, advertising remains the main weapon in every brand’s armory to stand out against in the frenzied crowd of offers from seemingly every retailer and brand.
According to Sitecore’s US Holiday Report, consumers were exploring various strategies to make the season more affordable, including cutting back on expenses and subscriptions, taking on side jobs and selling personal items to earn extra cash.
It also found that two in five said holiday ads influence them to decide what and where they purchase gifts. TikTok and Instagram are the most popular channels for inspiration.
Black Friday is the “holy grail for Brandformance campaigns,” said Daisy Domenghini, Managing Director of VaynerMedia EMEA. She said the Golden Quarter is an opportunity for companies to combine their performance marketing tactics alongside current societal interests.
It’s vital that brands and sellers leverage advertising tools from now until the end of the year to ensure they harness their influence.
Upasana Gupta, general manager of eBay Ads U.K.
“Attention builds during the year, but the extended Black Friday period is quickly turning Black Friday into the next Super Bowl,” she said. “Connecting with culture and building your brand through insights built on social media is the best way to cut through the noise. It’s the difference between customers choosing your product or not.”
The comparison to the Super Bowl is no coincidence with ad inventory for Amazon’s first Black Friday NFL game having sold out. The same was also true of Thursday’s games.
eBay Ads found that in the U.K., more than a third (34%) of the population would be inspired by ads to purchase during the holiday season and that over half (54%) of that demographic cited Black Friday as the start of their Christmas shopping.
The same research also claimed a third of shoppers influenced by ads said that without Black Friday deals, they would struggle with the cost of their seasonal shopping this year.
“It’s vital that brands and sellers leverage advertising tools from now until the end of the year to ensure they harness their influence during this key promotional period, converting perusal into purchase among those eagerly awaiting deals,” said Upasana Gupta, general manager of eBay Ads U.K.
