2023 Black Friday and Cyber Monday Sales Break Records Despite Inflation
- Online sales grew over 7% on Black Friday and 9% on Cyber Monday
- Top categories included apparel, consumer electronics, and toys
- Adobe measured record $12.8B in US online spend over Cyber Monday
- Consumers increasingly price-sensitive amid high inflation and interest rates
- Europe sees lower growth than US as economic headwinds bite more sharply
- Platforms enticed buyers with major discounts, displacing ad spending
With broader economic anxieities weighing on household budgets, deal-seeking took center stage for many 2023 Black Friday and Cyber Monday shoppers. Retailers and major ecommerce platforms promoted major markdowns and sitewide discounts to fuel spending momentum.
According to Salesforce Shopping Index data, the average online discount rate peaked at roughly 20% off on Black Friday itself then tapered down throughout the weekend:
- Black Friday – 20% average discount rate
- Saturday – 15%
- Sunday – 12%
- Cyber Monday – 15%
Category leaders leaned most heavily into dramatic deals to stay competitive. Top offers included:
- Amazon Devices – Up to 50% off Echo speakers, Fire tablets, Ring cameras
- Best Buy – Up to 40% off major appliances, TVs, computing
- Target – 30% off toys, 40% off headphones/speakers
- Walmart – PS5 and Xbox consoles discounted by $50-$100
This discount-driven momentum produced stellar sales for the ecommerce giants. Amazon said this marked its biggest Thanksgiving to Cyber Monday period ever in the company’s history. Walmart had record-breaking transaction volumes online throughout Black Friday itself last week. Meanwhile Target’s biggest categories were the predictably hot toys and beauty segments.
Smaller online brands noted shoppers gravitated toward especially eye-catching deals while slightly reducing average order values, indicating caution around higher-priced items. For instance the average order value for Thanksgiving Day itself was 5.9% lower than Cyber Monday week 2022. Travel sales paint a similar picture – flight bookings around Thanksgiving grew over 6%, but consumers opted for shorter trips compared to last year according to Hopper.
For European consumers facing even steeper inflation and instability from factors like the Ukraine war, buying clearly centers around discounts and essentials vs. high-end impulse purchases:
- Klarna tracked a 6% sales jump on Black Friday in Europe, steady from last year’s result but lagging the +12% growth seen in the US.
- UK results tell a similar story, with volume gains but lower spending per transaction – Barclaycard clocked a 2.4% increase in Black Friday transactions overall compared to 2019 but a 4% decline in average purchase amount.
So sellers succeeded in stimulating transaction activity via widespread price cuts, but it came at the cost of slimmer margins in many cases.
Platforms Push Discounts Over Ad Spending
This leads into the reality that the major retail media giants clearly pushed partners to dangle major discounts as the lever to accelerate holiday purchases amidst inflation – sometimes displacing ad spending in the process.
For context, ecommerce advertising has boomed in recent years as platforms like Amazon, Walmart and Instacart convince brands to spend big promoting products digitally to their loyal shoppers. So ad fees are an important sales catalyst and revenue stream.
But this Black Friday and Cyber Week, repression of ad expenditures was noticeable according to executives across multiple industries:
- Etsy CEO called out Amazon requiring 3P sellers to heavily discount if they wanted a “Deal” badge that drives visibility and conversion for shoppers. Failure to follow mandated discounts reportedly sank product visibility.
- Multiple adtech firms flagged ecommerce ad spending dropping over Black Friday weekend as social channels pulled some budget.
So while sales days like Cyber Monday broke records, platforms achieved this partly by strong-arming partners and throttling ad visibility for those refusing to slash prices sufficiently. This dynamic may extend through the holidays, forcing brands and retailers to bleed margin to stay discoverable online.
The bottom line is consumers have signaled they still have appetite to spend when prices fall low enough to present a perceived value. But it remains to be seen how much strain extensive discounting puts on retailers, social apps, and the ad support needed to surface products matched to individual shoppers. Brands can only go so low before profits evaporate.
High inflation makes this holiday season truly extraordinary for consumers and commerce platforms alike. The ultimate impact will become clear as 2023 progresses, but for now record Black Friday and Cyber Monday results show that even under economic duress, shoppers respond to the spirit of the holidays and well-positioned deals.