Online Black Friday Sales Hit A Ridiculous Record This Year
Black Friday saw record sales with $9.12 billion dollars in goods purchased in both physical stores and online.
The one thing that equals the anticipation of that Turkey dinner with all the fixings with all your family on Thanksgiving Day is the incredible savings you can earn the following day on Black Friday. This year was no different and retailers watched the money flood into their coffers to a record tune of over $9.12 billion dollars in total. Retail corporate executives and financial analysts anxiously were awaiting the sales data to see what the consumer response would be with all the talk recently about inflation and a looming recession that is hiding in the shadows of our consciousness.
When those results came in it was clear that Black Friday online sales were up 2.3% from last year with the lion’s share of those purchases coming in the electronics, smart home equipment, toys, and exercise equipment sectors. The total amount of money spent by consumers was larger than in the previous year. But what happens when we factor inflation into the equation, did we see more products purchased or were the products just more expensive? Adobe, which is the company that tracks all online sales on those retailer websites, has provided the data that confirms we did see an overall increase in online sales.
According to CNN Business, “Some of that growth reflects higher prices and not higher volume, since the firm’s figures aren’t adjusted for inflation. But Adobe said sales would have been higher even if inflation were factored in.” This is a positive indicator that even with diminished buying power consumers are determined to spend those funds on cyber deals and ensuring their Christmas season has an acceptable number of gifts under the tree. When analysts break down where the money for all these purchases is coming from, they are seeing that Americans are either dipping into their savings or racking up debt on credit cards to afford everything.
The analysts are seeing an even greater portion of this credit debt being associated with Buy Now, Pay Later services. This is a newer form of debt that consumers are becoming more comfortable with using than at any point before. This form of credit debt was outpacing credit card purchases throughout Black Friday and was 80% higher than compared with the previous week’s data.
This form of spending has been worrisome to some lawmakers and economists due to the industry’s lack of transparency and regulatory oversight. Which are like the issues that we discovered about payday loans and the predatory practices that they were utilizing to charge exorbitant interest rates that severely impacted middle to low-income families that became reliant on their services.
Even with Black Friday in the rearview mirror, the projections signal that we should expect that online sales will remain strong through Cyber Monday. Adobe has projected Saturday and Sunday sales to be in the $9.55 billion spent across the two weekend days. That leads right into Cyber Monday and the estimates from leading economic experts figure the sales total to be in the $11.2 billion dollar ballpark. That figure would surpass the previous largest shopping day in history, which was last year’s Cyber Monday.
The $11.2 billion estimate would be about a 5% increase year over year and puts retailers in a position to finish the year with the strongest sales performance some companies have ever seen. The Christmas buying season is off and running full speed ahead to end the year on a high note from a Sales perspective. We will have to see if the consumer spending spree has a dramatic effect on our economy or whether it causes even more issues moving into the first half of 2023 when consumers attempt to recover from overspending during Black Friday shopping period.
