U.S. online spending is expected to set a record for Black Friday, according to Adobe Analytics, as steep discounts lured consumers against the backdrop of high inflation, kicking off the year’s biggest shopping event on a strong note.
Initial numbers from Adobe Analytics, the data and insights arm of software company Adobe Inc, showed shoppers are expected to spend between $9 billion and $9.2 billion online on Friday, topping its forecast for a modest 1 percent rise to $9 billion.
Meanwhile, brick and mortar stores remained quiet throughout the day. Bloomberg reports that any lines at stores were actually due to a shortage of employees rather than demand for products.
Tammy Freeman, a customer at Macy’s flagship store in Herald Square in New York City told the New York Times she was there due to inflation, saying: ‘I have to catch the sales more.’
While an employee at Macy’s store in Union Square, San Francisco, said that even though there was a line outside when they opened, when that crowd left, it was just like a normal day.
Macy’s chief executive Jeff Gennette told the Times: ‘Even in really tough years Black Friday is a very strong day for us.’
Macy’s Herald Square opens its doors at 5 p.m. on Thanksgiving Day for thousands of Black Friday shoppers in search of amazing sales and doorbuster deal
At least one department employee said that after an early rush, Black Friday felt like a normal day
Customers visit the American Mall dream mall during Black Friday on November 25, 2022 in East Rutherford, New Jersey
Inflation hovers over US shoppers this year as many hit the stores for the traditional day after Thanksgiving shopping sales
‘E-commerce demand has remained strong regardless, and Black Friday is set to surpass $9 billion in online sales for the first time, as consumers come to value the ease and convenience of shopping from home,’ said Vivek Pandya, lead analyst at Adobe Digital Insights.
‘Some shoppers are returning to physical stores for Black Friday, after two years where pandemic-related anxieties kept many people at home,’ Pandya added.
At 6 pm on Black Friday, online sales totals were at $7.28 billion.
Adobe Analytics, which measures e-commerce by tracking transactions at websites, has access to data covering purchases at 85 percent of the top 100 internet retailers in the United States.
Adobe’s analysis covers over 1 trillion visits to retail websites; Adobe does not disclose the names of the company sites it tracks.
Vivek Pandya, lead analyst at Adobe Digital Insights, said: ‘Some shoppers are returning to physical stores for Black Friday, after two years where pandemic-related anxieties kept many people at home’
CNBC reports that some of the most popular items included Apple smartwatches and Airpods as well as toys from Funko, Hatchimals and Squishmallows
Shoppers cross 4th Street at Market Street as they hunt for Black Friday deals in San Francisco
CNBC reports that some of the most popular items include Apple smartwatches and Airpods as well as toys from Funko, Hatchimals and Squishmallows.
Early holiday deals, including a second Amazon Prime Day event in October, were expected to take some of the shine off the biggest shopping days of the year.
More Americans placed orders through their smartphones over the holiday, with mobile shopping expected to drive 53 percent of Black Friday online sales. Mobile orders accounted for 55 percent of online Thanksgiving sales.
Cyber Week, which runs five days from Thanksgiving to Cyber Monday, is expected to generate $34.8 billion in online spending, up 2.8 percent from the same period last year, according to the report.
‘As Black Friday discounts transition to being pre-Cyber Monday discounts, we expect online spending momentum to continue through the weekend.’ Pandya said.
Adobe also predicts that online shopping over the weekend will result in spending of close to $10 billion with toys accounting for 34 percent of those sales.
However, the company advises that consumers wait until Monday to shop because that’s when discounts will reach an average high of 27 percent.
The National Retail Federation predicts that Americans could spend as much as $960 billion this holiday season, up from the $889 billion that was spent last year.
According to CNBC’s reporting, Target, Macy’s and Nordstrom have all said that sales were down through October and November as inflation continues to rise.
Shoppers on average are splashing out $433 more per month than they were in 2021 – despite buying the same goods and services.
While figures are slightly down from the $445 monthly figure in September, Moody’s Analytics analysis of October data shows inflation is still stretching budgets.
Annual inflation in the US remained stubbornly high at 7.7 percent last month, but dipped for the fourth straight month
Consumer prices jumped by 7.7 percent in October from a year ago, according to the U.S. Bureau of Labor Statistics (BLS).
That rate is down from 9.1 percent in June, which marked the most recent peak, and data has suggested inflation may cool further in the coming months.
Wages for many workers haven’t kept pace with inflation, meaning they’ve lost purchasing power.
Hourly earnings fell 2.8 percent, on average, in the year to October after accounting for inflation, according to the BLS.
October’s rate, while down from September is still nearing the highest levels since the early 1980s.
The impact on households isn’t streamlined however, with personal inflation rates on the types of goods and services an individual buys and other factors like geography, playing a part.
Bernard Yaros, an economist at Moody’s, spoke to CNBC and said the ‘peak of inflation is likely behind us.’
‘We are seeing more signs that peak inflation is likely behind us, and this ought to provide some relief for those demographics who have been disproportionately hurt from uncomfortably high inflation over the past year,’ he said.
‘[For example] younger and rural Americans, as well as those without a bachelor’s degree.’
Joseph Bert, a certified financial planner who serves as chairman and CEO of Certified Financial Group, told CNBC that ‘there’s no one silver bullet.’
‘It’s all those little decisions that add up at the end of the month,’ he said.
Madeline Maloon, a financial advisor in San Ramon, California told the broadcaster that there is less flexibility to cut fixed expenses.
Instead Maloon has advised that nonessentials are likely to get the snip if individuals are wanting to save money.
It is important, Bert said, that people avoid funding higher costs with a credit card or via a withdrawal or loan from a retirement plan.
‘That’s the worst thing you can do. You’ll pay a huge price for that in years to come,’ he added.
President Joe Biden last week praised the new report that showed inflation was on the way down, describing the change as ‘progress’ and proof his economic plan is working.
The consumer price index came in at 7.7 percent for October, marking the fourth straight month of declines from the 40-year high of 9.1 percent reached in June.
Core inflation, excluding volatile food and energy prices, dipped to 6.3 percent on an annual basis, after hitting a four-decade high of 6.6 percent in September.