After a challenging few years for eCommerce retailers, Black Friday and Cyber Monday (BFCM), are finished for another year. Did retail see a decline or recovery?
BFCM continues to influence buying behaviour and generate valuable revenue, driving a significant proportion of eCommerce retail sales. According to data from Adobe Analytics consumers have spent $9.8 billion in online sales on Black Friday 2023. That’s up 7.5% from last year. (Source)
Despite inflation and rising cost-of-living pressures, the National Retail Federation in the US expected spending to reach “record levels” but growth rates are expected to remain lower than the last three years.
Consumers remain in the driver’s seat, and are resilient despite headwinds of inflation, higher gas prices, stringent credit conditions and elevated interest rates.- NRF Chief Economist Jack Kleinhenz
While the NRF looks at US statistics, it invariably aligns with that of Europe. It’s worth remembering that consumers are resilient, in that they have loved ones to buy for – whether that’s an aunt or uncle, or “Santa Claus” – consumers have a gift list to fulfil. However, resilient does not mean naive.
According to Adobe, consumers, perhaps still feeling the pinch of inflation, are choosing cheaper fulfilment options to save money. On Black Friday alone, about 80% of all online orders used standard shipping. Consumers are diligent when it comes to hunting out the best prices and patient while they wait for the sales to start. (Source)
This, according to Robert Garff of Salesforce, there’s a phenomenon that he calls “discount chicken, where it’s always a game between the retailer and the consumer. And the consumer more often than not ends up winning the game of discount chicken. They just wait for the best and final deal.”
Garf said retailers leaned into promotions highlighting the start of the season but “didn’t come to the table with very attractive deals. And guess what happened?” Due to the prevailing economic headwinds and consumers feeling the cost-of-living crisis more acutely, they waited and they waited patiently.
Mobile outstrips desktop
In 2017, mobile represented 61% of digital traffic for eCommerce. That grew to 75% in 2020 and to 79% this year.
Mobile was always touted to beat desktop in an age of hyper mobility. Adobe Analytics found that smartphones accounted for $5.3 billion of all online sales on Black Friday, up 10.4% year over year. Smartphones also accounted for 54% of online sales. The reason? Improved shopping experiences make it easier to make purchases on mobile devices.
After a pandemic-era slide, shoppers surged back to buying on mobile, delivering an all-time high for that segment, according to data from Salesforce. In 2017, mobile represented 61% of digital traffic for eCommerce. That grew to 75% in 2020 and to 79% this year.
Mobile has not killed the retail store though. The retail store still plays an extended role in the realm of the digital shopping experience. The days of bursting through the store doors at 5am on the first day of the sale may be gone, but people still like to buy online and collect in-store. This gives the consumer an opportunity to browse…and the retailer to cross sell. While this might not be feasible for smaller retailers breaking into the European market, many larger retailers are creating hubs in larger shopping centres (malls).
While much of Europe is well used to online shopping, there is still a tendency to “buy and try” before returning items or deciding to keep them. It’s a hark back to the bricks and mortar shopping experience. This approach does place some pressure on fulfilment centres and retailers and something to bear in mind come January. Ensuring you have an effective fulfilment partner is important when January rolls around.
Rising Costs and Revenue
eCommerce revenue also increased 6.94% YoY on Black Friday. While some of this may be explained by the rising cost of goods and inflation across the board, it tells us that shoppers are still opting to invest during the Black Friday period to get more value for their money.
It’s been reported in previous years Black Friday is no longer a single-day event and that holds true in 2023. Consumer spending started increasing from the 11th of November in the run-up to the Black Friday period, highlighting how far in advance shoppers are starting their spending to reflect a more drawn-out sales season throughout November.
It’s been reported in previous years Black Friday is no longer a single-day event and that holds true in 2023.
Focus on Growth
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