US Thanksgiving weekend sales reach record-breaking $38 billion due to significant discounts, says report
November 28, 2023 – 3:32 PM UTC
(Reuters) – Deep discounts on everything from beauty products and toys to electronics during the Thanksgiving weekend enticed U.S. shoppers to splurge about $38 billion online, signaling a strong holiday shopping season even as economic uncertainty swirled.
Online consumer spending jumped 7.8% during Cyber Week, or the five days from Thanksgiving through Cyber Monday, according to data from Adobe Analytics, outstripping initial expectations for a 5.4% rise.
In the lead-up to the crucial shopping season, industry forecasters including Deloitte and retailers like Walmart (WMT.N) and Macy’s (M.N) warned of cautious consumer spending due to sticky inflation constraining budgets. But blockbuster deals rolled out from Thanksgiving Day through Cyber Monday helped spread the holiday cheer for bargain-hunters.
Sales on Cyber Monday jumped a better-than-expected 9.6% to a record $12.4 billion, as shoppers clicked “buy” on Hot Wheels toys, PlayStation 5, smart watches and kitchen appliances.
“The record online spending across Cyber Week … shows the impact that discounts can have on consumer demand, especially with quality products that drove a lot of impulse shopping,” said Vivek Pandya, lead analyst at Adobe Digital Insights.
Adobe said discounts peaked at 31% for electronics and at 27% for toys on Cyber Monday, which is typically the biggest online shopping day in the U.S.
In a bid to stretch their Christmas budgets, shoppers are also leaning on Buy Now, Pay Later (BNPL) services such as Klarna or Affirm to avoid the extra fees and interest that come with credit card payments.
A record $940 million worth of purchases were made through BNPL on Cyber Monday, surging 42.5% from last year and trouncing Adobe’s earlier estimate for an 18.8% jump.
Payments firm Block (SQ.N) also noted BNPL transactions through Afterpay surged 19% over the weekend, while Klarna said it saw a 29% increase in orders placed by U.S. shoppers on Black Friday.
Reporting by Deborah Sophia and Juby Babu in Bengaluru; Editing by Pooja Desai and Devika Syamnath
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Title: Strong Online Spending During Thanksgiving Weekend Signals a Robust Holiday Shopping Season
Introduction
In a year marked by economic uncertainty, U.S. shoppers demonstrated their resilience and confidence by splurging approximately $38 billion online during the Thanksgiving weekend. Deep discounts across various product categories, including beauty products, toys, and electronics, attracted consumers and contributed to a strong start for the holiday shopping season.
Record Online Spending during Cyber Week
According to data from Adobe Analytics, online consumer spending surged by 7.8% during Cyber Week, which encompasses the five days from Thanksgiving through Cyber Monday. This surpasses initial expectations of a 5.4% rise and highlights the robustness of online shopping during this period.
Pre-Thanksgiving Concerns Dispelled
Leading up to the crucial shopping season, industry forecasters, including Deloitte, as well as retailers like Walmart and Macy’s, expressed concerns regarding cautious consumer spending due to inflationary pressures. However, the introduction of blockbuster deals from Thanksgiving Day through Cyber Monday dispelled these worries and invigorated bargain-hunters.
Cyber Monday Exceeds Expectations
Cyber Monday, traditionally the biggest online shopping day in the U.S., witnessed a better-than-expected increase of 9.6%, reaching a record $12.4 billion in sales. Consumers eagerly purchased products such as Hot Wheels toys, PlayStation 5, smartwatches, and kitchen appliances, taking advantage of the enticing discounts offered.
The Impact of Discounts on Consumer Demand
“The record online spending across Cyber Week … shows the impact that discounts can have on consumer demand, especially with quality products that drove a lot of impulse shopping,” stated Vivek Pandya, lead analyst at Adobe Digital Insights. The availability of discounts, which peaked at 31% for electronics and 27% for toys on Cyber Monday, played a significant role in motivating consumers to make their purchases.
Buy Now, Pay Later Services
To manage holiday budgets effectively, shoppers are increasingly relying on Buy Now, Pay Later (BNPL) services like Klarna or Affirm. By utilizing these services, consumers can spread out their payments over time, allowing them to enjoy their purchases without the immediate financial strain.
Conclusion
The impressive online spending of $38 billion during the Thanksgiving weekend reflects the resilience and optimism of U.S. shoppers. Surpassing initial projections, the record-breaking sales and discounts across various product categories emphasize the significant impact of discounts on consumer demand. With the holiday shopping season in full swing, retailers can be hopeful for a robust and prosperous end to the year.
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