The Cyber Week sales event seems to have gone off without a hitch: with data from Adobe Analytics showing that Black Friday spending in the US was up 7.5 per cent on last year’s figures, hitting $16 billion. The pre-Christmas event, which has grown steadily in recent years, took on new importance in 2023 following a year of higher-than-average inflation and lower-than-average spending. Retailers worldwide have battled slowing conditions, with Australian footwear giant Accent Group and
p and American fashion brand Guess recently highlighting the impact lower consumer confidence is having on the wider market. The increase in spending will have come as a relief to retailers that feared another slow month, but possibly at the expense of a more robust holiday shopping period overall. In Australia, data from payment provider Shopify showed that the country’s largest cities led the charge on Black Friday, with most spending coming from Melbourne, Sydney and Brisbane. Australians spent an average of $179 per basket over the weekend, largely on clothing, personal care, and kitchen and dining products. Most shopping was done online, with Shopify noting that 75 per cent of global sales on its platform took place on mobile, while Adobe said that figure was closer to 54 per cent. Between a rock and a hard place With four weeks left in the all-important Christmas period, the question now is whether customers will continue to spend as they did during the Cyber Week sales event. The Australian Retailers’ Association recently predicted sales would slow after Black Friday, and the remainder of the holiday period would be flat on prior years. And, with Australia’s Reserve Bank hinting at further inflationary pressures to come, it’s entirely possible that consumers will rein in their spending after the weekend splurge. This isn’t just an Australian trend, either. According to Salesforce, US retail sales are expected to grow only 1 per cent over the November and December period, a rate far slower than recent years. Still, many shoppers have indicated that they are planning to wait for ‘better deals’ closer to the end of the year. “Consumers are being very strategic, wanting to maximise their shopping when they think they’ll get the best discounts,” said Vivek Pandya, lead analyst for Adobe Digital Insights, according to Reuters. “The online retail sector is one of the few where the consumer is a bit more in the driver’s seat. There are a lot of online merchants vying for their dollar and they can easily compare prices.” Retailers that continue to offer discounts in the lead-up to Christmas could capture this additional spending, though it could negatively impact their profit margins and consumer trust if they do. Pandya, however, told Reuters that he expects Cyber Monday to record $19.5 billion in spending, which will make it the biggest day of online spending in the US’ retail history. Some brands are pushing back against this discount spiral. Australian gumboot brand Merry People has reassured customers that it will not go on sale for any reason — the price is the price — so they can buy the product when they need it, not when it’s on sale. Others are pushing back on the sales culture more generally. Mike Smith, co-founder of sustainable home cleaning and personal care brand Zero Co, asked customers not to buy anything they don’t need, including Zero Co’s own products, over the sales period. The end of the year could still deliver for retailers. PwC has predicted 40 per cent of consumers will spend more on gifts, travel and entertainment this year than they did in 2022. Likewise, Deloitte expects holiday sales to exceed pre-pandemic levels, and deliver a 14 per cent increase year over year.