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Years ago, the headlines about Black Friday mainly consisted of shoppers waiting out in the cold throughout the night or brawling over Tickle-Me-Elmos. In 2022, Black Friday and its digital counterpart Cyber Monday have grown into massive shopping days and advertising moments. According to Adobe Analytics, Americans will spend 210.1 billion dollars this holiday season. eMarketer estimates that nearly 16% of those sales already happened during the Cyber 5 period. What can we learn about the 2022 holiday shopping season from the end-of-November sales? What about 2023?
Check out the top trends and changes we’re seeing this year surrounding Black Friday and Cyber Monday performance.
💬 How did 2022 Black Friday and Cyber Monday compare to last year? 💬
“Increases in inflation in 2022 presented new challenges to consumers. Cyber Monday and Black Friday shoppers modified their purchase habits. Data points to a rise in payment plans as retailers offer low or no-interest financing when applying for the store’s credit card.”
Erik Stubenvoll, Managing Director, KORTX
Shopping habits during the holiday season often predict how the next year will change regarding consumer spending and shopping habits. Based on how customers acted during this Cyber 5 season, we expect to see the following:
Cyber Monday broke the record for the biggest online shopping day with $11.3 billion in sales. Many customers visited in-store or participated online. Before the shopping days, 80% of people indicated that they planned to shop during this time. eMarketer estimates that the big Cyber 5 shopping days likely made up 15.6% of all holiday shopping, meaning consumers will presumably spend much more before the New Year.
What It Means: Despite inflation and worries about a looming recession, customers still spent billions of dollars at the end of November. We’re cautiously optimistic about the remainder of the shopping season.
The average discount during Cyber Monday and Black Friday was around 30%. With the average cost of consumer goods increasing with rising inflation, polled customers indicated they were shopping for more discounts this year. According to Adobe Analytics, discounts on big-ticket items were some of the most popular categories, including televisions (12.93%), computers (16.4%), and furniture (5.2%).
What It Means: Customers and consumers are looking for deals this season. If your marketing fails to showcase your deals and discounts prominently, you might lose to a competitor. Customers shopping around are likely to be less brand loyal, as well.
💬 What’s the best way to market sales and discounts? 💬
“Customers looking for discounts and sales are more likely to have multiple touch points with your brand as they research where to get the best price. Ensure all marketing channels are speaking to big deals and promos. Email marketing pushes, social media posts, and paid search ads help guarantee that your brand and products show up during the full scope of their research phase.”
Josh Pheneger, Account Strategist, KORTX
Over half of modest earners claim to be scaling back this season, and 37% indicated that their financial outlook is worse for 2023. These shoppers are likely those looking for the deepest discounts.
Alternatively, high earners (or those earning more than $150K per year) plan to spend twice the national average at around $1,878 this season, a 9.7% growth from last year.
What This Means: Marketers must know their audience and potential target audience to grow this season. Brands looking to reach lower-income audiences should lean on discounts and sales, while high earners will likely be swayed by other messaging.
Traditionally saved for expensive purchases like furniture or technology, Buy Now Pay Later Plans are growing in popularity this season, likely due to increased prices from inflation and economic anxiety. According to a holiday spending report from LendingClub, over half of millennials and Gen Zers plan to take advantage of financing options this season, including BNPL, credit cards, or personal loans. These numbers are slightly less across the board (37% for all of the US). These options, however, have been growing at a good club as they are up 34% compared to 2021.
What It Means: Brands not partnering with smaller lending companies to offer Buy Now Pay Later financing options could be missing out on purchase opportunities. Furthermore, customers agreeing to these payment plans may be more reluctant to spend more in the months following the holidays.
Big box stores such as Target and Walmart began their Black Friday sales well before the turkey was in the oven this year, kicking off early to mid-November. Additionally, many brands continued to advertise their “extended” sales beyond Cyber Monday through the majority of the following week. This extension allowed shoppers to take their time with purchases.
What It Means: With so many customers shopping for discounts and sales, continuing to offer these price decreases will be an excellent way to continue to catch late shoppers. Furthermore, consider working extensions or early release dates for the 2024 season.
eCommerce and digital purchases continue to grow year over year. 2022 marked the first year that shopping numbers returned to traditional numbers since before the pandemic. According to Forbes, 40% of poll respondents planned to visit stores on Black Friday, and nearly 63% of those customers prepared to “walk the store floor” for some portion of their holiday shopping.
What It Means: Digital advertisers should speak to digital and in-store customers, offering expected discounts across IRL and online venues. Websites should also provide accurate and up-to-date information based on the stock by location.
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Peaking at nearly 20% above last year’s numbers on Black Friday and seeing a similar increase on Cyber Monday, paid search spending increased by 18% YoY.
What It Means: Flashy social media ads and television commercials drove interest in deals for big box stores, but customers were shopping around. The Google Search and shopping experience allow for price comparison across multiple retailers. If your team has yet to invest money in paid search, it is worth exploring this holiday season.
📍 Paid Search Tips from KORTX
“With increased competition, Black Friday and Cyber Monday Search Ads can be challenging to execute. It’s important to make sure your team incorporates ad copy alignment adjustments for individual sales. Additionally, brands should update all product pages to reflect deals across the website while building awareness through social media and email marketing before and during the sales.”
Matt Grevenstuk, Ad Ops Specialist, KORTX
eMarketer expects consumers to return $906.64 billion worth of merchandise in 2022. An increase in returns can lead to a dent in overall profits. According to a Pitney Bowes survey, online returns cost a retailer around 21% of the order value. Return rates growth is outpacing revenues for 91% of retailers. This expensive issue will likely impact post-holiday shopping and impact numbers and profits.
What It Means: To make the customer experience seamless, all companies should have a straightforward process for returning merchandise. Additionally, when gathering projections for the holiday season and coming year, consider including these rates and make your marketing team aware of them. If a “free returns” campaign caused a massive uptick in returns for this season, it is worth examining if this creative should be employed in the future.
The above trends will be pivotal in holiday shopping profits and marketing in the coming weeks. If you’re able, consider pivoting your marketing plan to continue to feature ongoing discounts and sales.
Improve your eCommerce numbers in 2023!
Are you hoping to improve your digital sales in 2023? KORTX can help with that. Our team of marketing experts can put together a data-backed audience targeting strategy to reach your audience when they’re ready to buy.
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