Black Friday sales break online records as Americans keep click-shopping while margins get slimmer
’Tis the season to splurge… and inflation-stressed US shoppers still have the urge: shoppers spent a record $9B online on Black Friday, and yesterday’s Cyber Monday sales were expected to hit a record $11B. Thanks partly to deep discounts, sales of Apple MacBooks, Dyson gadgets, drones, and gaming consoles soared, while toy sales quadrupled.
- Mobile mania: Consumers did nearly half their Black Friday shopping from their phones — a new record.
- Buy now, pay later payments rose 78% from the previous week as consumers continued to grapple with high prices.
Holiday hype may not last… Strong post-Thanksgiving sales were a bright spot for retailers, which had given cloudy forecasts for this holiday season: Target, Macy’s, Nordstrom, and others reported slow sales in October and early November as consumer sentiment dipped. Now retailers are trying to unload their inventory — and stay rid of it:
- Deeper discounts: This year the average Black Friday discount ticked up to 30%+, Salesforce data showed. Translation: retailers want to ditch piles of summer goods.
- Stricter returns: About 60% of retailers surveyed are adopting stricter policies to cut costs (think: fewer free returns).
More sales ≠ more profits… because discounts mean slimmer margins. Despite this past week’s strong (cough, inflated) sales, analysts actually expect holiday sales to fall this season when adjusted for inflation — which would be the first holiday drop since 2009. That could spell tough times ahead for mega-retailers like Target and Walmart, which may end up with punier profits if they’re forced to keep slashing prices to move merch.