[1/5] A worker selects and packs items during Cyber Monday at the Amazon fulfillment center in Robbinsville Township in New Jersey, U.S., November 28, 2022. REUTERS/Eduardo Munoz
Text size
Adobe provides a comprehensive view of U.S. e-commerce by analyzing direct consumer transactions online.
DreamstimeThe long Black Friday/Cyber Monday weekend notched another record for spending. The latest data show that shoppers spent more because they wanted to, not because inflation boosted their checkout totals.
That still might not be enough to help retailers, however, and not all the news is good for the Federal Reserve’s fight against inflation. Prices for essential goods are still sky-high.
According to the latest figures from Adobe Analytics, consumers plunked down $116.5 billion in e-commerce sales, a 1.7% increase from last year, and 62.5% more than in October. That increase came despite retailers’ hope to push ever more of the holiday shopping season ahead of Halloween, even if many consumers did start early.
While the data from Adobe (ticker: ADBE) isn’t inflation adjusted, the firm’s digital price index fell 1.9% in November from the year-ago period, and 3.2% from October. That makes it “clear that strong consumer spending has been driven by net-new demand—and not simply higher prices,” according to Adobe’s news release.
Going into the holiday season, many were thinking that the higher cost of living would crimp consumers’ ability to buy gifts, in contrast to 2021’s robust showing although as Barron’s has written, retail sales data showed that shoppers were quick to bounce back when inflation ticked lower. We have noted that could translate into stronger-than-expected holiday spending.
The Adobe data seem to dovetail with the idea that slightly lower prices spurred more demand. If shoppers were truly hunkered down, they wouldn’t have been tempted to buy nonessentials even on sale. That should bode well for the economy, given how dependent it is on consumer spending.
One downside is that if Americans are happy to keep spending, it weakens the case that prices will keep heading lower, as the Fed wants them to. Markets weren’t thrilled by the latest strong retail sales practicing because it raised concern that the bank will need to keep raising interest rates aggressively, a negative for corporate earnings and stock prices.
For all the talk of inflation cooling and discounts to be had, it is still incredibly expensive to buy the things people can’t live without. Adobe noted grocery prices were up 13.7% year over year in November, for a gain of 0.3% from October.
That was actually a good reading, marking the second straight month where year-over-year prices have retreated from record levels. Price increases from August to October were 14% or higher.
Yet in practical terms ,it is hardly the much-needed break many Americans may be hoping for. We’re still paying much more than last year for the same food, and few have seen their income jump double digits to compensate.
That begs the question of how Santa is funding his shopping spree. It seems likely that answer isn’t the timely deaths of wealthy uncles or lottery winnings. Look to credit card debt, which also reached record highs in November.
The other problem is for retailers themselves. Barron’s has highlighted that retailers have been offering steep discounts, noting that they could hit companies’ bottom lines if they boosted sales at the expense of margins. The Adobe data seems to confirm that retailers were indeed offering big promotions.
“The decline in online prices for November was driven by heavy discounting during Cyber Week,” the release said. “Online prices fell sharply for computers, where prices dropped 18% year over year (down 5.1% month over month), and electronics, which fell 13.4% year over year (down 4.5% month). Both categories saw the largest year over year drops on record, since Adobe began tracking online prices in 2014.”
Adobe noted that prices also fell for other categories, such as toys and sporting goods, so fiscal fourth-quarter results from retailers may continue a trend that has been widespread this year: higher top-line growth that doesn’t flow to the bottom line.
Write to Teresa Rivas at teresa.rivas@barrons.com
Nov 28 (Reuters) - Spending on Cyber Monday, the biggest U.S. online shopping day, may hit a record $11.6 billion according to one preliminary estimate, as discounts on everything from pajamas to AirPods tempt shoppers to click "buy" despite the strain on household budgets from high inflation.
The estimate from Adobe Analytics predicts an increase of up to 8.5% from a year earlier. Much of the increase could be put down to inflation, which rose 7.7% in October, the lowest since January.
"If you exclude inflation, which has been running in high-single-digits, you come to a flattish number in real terms which would really not be too bad," Telsey Advisory Group analyst Joseph Feldman said.
Adobe Analytics measures e-commerce performance by analyzing purchases at 85% of the top 100 internet retailers in the United States. Both Adobe and MasterCard Spending Pulse are expected to release their updated Cyber Monday spending estimates on Tuesday.
Americans have put off holiday shopping for weeks in the hopes of finding deeper post-Thanksgiving markdowns. Retailers have dangled deals and discounts since as early as October to tempt shoppers to open their wallets.
"Shoppers are waiting out the season in anticipation of deeper discounts and are less susceptible to shiny objects," said Carol Spieckerman, president at consultancy Spieckerman Retail.
Target.com on Monday advertised discounts of up to 40% on Hot Wheels toys and holiday decor, while Amazon.com (AMZN.O) pitched 60% off promos on high-end watches and accessories.
Walmart's (WMT.N) and Best Buy's websites also slashed prices by hundreds of dollars on some laptops and televisions.
Overall, shoppers found discounts of as much as 27% off listed prices on computers, Adobe said, and double-digit discounts on nearly all other categories, including apparel, toys and furniture.
With inflation running at multi-decade highs, consumers will still have to shell out more for popular products because prices have risen faster than promotions in many categories, according to data provided by DataWeave.
For the five days from Thanksgiving through Cyber Monday - one of the busiest shopping periods during the holiday season - Adobe estimates online spending will rise 2.8% to $34.8 billion.
This comes after brick-and-mortar stores and malls saw thinner crowds than usual on Black Friday due to inclement weather in some parts of the country.
Last year, Cyber Monday sales fell 1.4%, according to Adobe Analytics, as retailers kicked off holiday promotions early to avoid product shortages amid a global shipping crisis.
Reporting by Uday Sampath and Ananya Mariam Rajesh in Bengaluru and Siddharth Cavale in New York; Editing by Anil D'Silva and Stephen Coates
Our Standards: The Thomson Reuters Trust Principles.
Nov 25 (Reuters) - 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 (ADBE.O), showed shoppers are expected to spend between $9 billion and $9.2 billion online on Friday, topping its forecast for a modest 1% rise to $9 billion.
As of 6 p.m. EST (2300 GMT) on Friday, Adobe data showed shoppers spent an estimated $7.28 billion online.
"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.
Adobe Analytics, which measures e-commerce by tracking transactions at websites, has access to data covering purchases at 85% 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.
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% of Black Friday online sales. Mobile orders accounted for 55% 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% from the year-ago period, 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.
Reporting by Deborah Sophia and Mrinmay Dey in Bengaluru; Editing by Anil D'Silva, Krishna Chandra Eluri, Leslie Adler and William Mallard
Our Standards: The Thomson Reuters Trust Principles.
usatoday.com cannot provide a good user experience to your browser. To use this site and continue to benefit from our journalism and site features, please upgrade to the latest version of Chrome, Edge, Firefox or Safari.
- Chrome: https://www.google.com/chrome/
- Edge: https://www.microsoft.com/edge/
- Firefox: https://www.firefox.com/
- Safari: Update to latest version through the App Store
U.S. shoppers also spent on Thanksgiving and the weekend, with sales hitting $5.3 billion on Thursday and a combined $9.6 billion on Saturday and Sunday.
The figures are not adjusted for inflation, which has been hovering at decades-high levels, experts note. That suggests consumers could be spending more for less.
“If inflation is up 8 percent and sales are up 5 percent or so, people are definitely buying less — there’s no question about that,” said Forrester analyst Sucharita Kodali. She cautioned that without in-person sales numbers, it’s hard to see a full picture.
Still, there’s some bright news for retailers. It seems more people are opening their wallets and searching for deals before peak gift-giving season hits.
A record 196.7 million people shopped over the weekend, according to the National Retail Federation. That “shattered expectations by more than 30 million,” according to the trade group’s president and chief executive, Matthew Shay.
“Black Friday is a very big day, and this continues to be a very important bellwether for the consumer psyche as well as the strength of our economy,” Shay said during a media call Tuesday, adding that the numbers reflect a promising enthusiasm from shoppers.
Shay said the numbers reflect an “enormous resurgence” of shopping at physical stores. But foot-traffic data from the analytics firm Placer.ai found that visits to indoor shopping malls on Black Friday were down 2.3 percent compared with last year, while outlet malls recorded a 3.9 percent decline and open-air lifestyle centers were down 0.5 percent.
The retail federation reported that 130 million people shopped online over the weekend, a modest increase from last year’s 128 million. More people than ever shopped on their phones this year, according to Adobe Analytics, accounting for 55 percent of online sales.
Shopify, which tracks online and in-store data using its commerce platform, reported record sales from Thanksgiving Day through Cyber Monday — 52 million consumers globally spent $7.5 billion on Shopify merchants, a 19 percent increase over last year.
“Consumers voted with their wallets over Black Friday [and] Cyber Monday by shopping with independent businesses,” said Shopify President Harley Finkelstein. “The future of commerce is on any surface, whether that’s shopping online or in store.”
Part of this could be because smaller merchants have been gaining share by utilizing the internet, Forrester’s Kodali said.
Still, it’s unlikely retailers will see the same boost as in the past two seasons, when there was more of a rush to spend on shopping during the height of the pandemic. Now, inflation is weighing heavily on family’s budgets and a tumultuous stock market has put some people’s savings in question. Consumer confidence slipped again in November, reaching a four-month low. The Conference Board, which releases the consumer index report, said inflation and interest rate hikes are the top threats to consumer confidence and economic growth.
But holiday shoppers have become savvier — hunting for deals, comparing prices and taking advantage of buy-now-pay-later offerings. Transaction data from Afterpay from Black Friday to Cyber Monday showed a 120 percent growth over last year. Adobe Analytics reported that over the five-day shopping period, there was an 85 percent increase from the week before.
The highest-performing shopping categories were clothing, toys, gift cards, electronics and media, including books and video games, according to Phil Rist, the executive vice president of strategy at Prosper Insights and Analytics.
With holiday season underway, retailers face a possible resurgence of supply chain snarl-ups reminiscent of last year. The looming threat of a rail strike is sparking fears that freight train stoppages could “have a ripple effect across the economy,” Shay said.
Retailers have been preparing for a possible strike since September, when a strike was narrowly averted. But a complete shutdown would strain the rest of the supply chain.
“Any slowdown, stoppage and delay … will put pressure on the other distribution centers, which are already trying to recover from the pandemic,” Shay said.
(Reuters) -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% rise to $9 billion.
As of 6 p.m. EST (2300 GMT) on Friday, Adobe data showed shoppers spent an estimated $7.28 billion online.
"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.
Adobe Analytics, which measures e-commerce by tracking transactions at websites, has access to data covering purchases at 85% 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.
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% of Black Friday online sales. Mobile orders accounted for 55% 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% from the year-ago period, 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.
(Reporting by Deborah Sophia and Mrinmay Dey in Bengaluru; Editing by Anil D'Silva, Krishna Chandra Eluri, Leslie Adler and William Mallard)
