6 Trends That Shaped 2023’s Black Friday

The sales data have begun trickling in from the Black Friday – Cyber Monday shopping holiday.

While sales figures have been cited as strong by associations like the National Retail Federation, these figures have not been adjusted for inflation.

Adobe Analytics reported a record $9.8 billion in Black Friday online sales, up 7.5% from 2022, not accounting for inflation. And for Cyber Monday, consumers spent $12.4 billion, a 9.6% increase from 2022.

As is the case every year, there were a few quirks and trends driving these numbers. Let’s unpack a few of them.

1. Sales started earlier

It certainly feels like holiday sales events kick off earlier every year. And data from Salesforce
CRM
prove that thesis out, with retail discounts showing up earlier in 2023 versus 2022.

According to the National Retail federation, 55% of consumers took advantage of early holiday sales, and 35% specifically engaged in shopping during the week leading up to Thanksgiving.

2. Advertising were costs on the rise

Overall, there was a general uptick in advertising costs on Amazon
AMZN
in the days leading up to Black Friday compared to 2022, according to ad-tech provider Pacvue.

The big difference between ad spend and CPC (cost per click) indicate that advertising on Amazon is becoming more competitive in general. As an auction-based advertising format, relative cost per click prices on Amazon is a measure of competition for brands targeting high-volume search terms.

ROAS (return on ad spend) decreasing from 2022 is also a concerning trend for advertisers. Possible drivers here include brands offering less attractive discounts compared to consumer expectations, and customers clicking on ads but ultimately delaying purchases for later (e.g. Cyber Monday).

But holiday spending will continue for a few more weeks. A PYMNTS Intelligence survey found that 57% of U.S. consumers plan to make a purchase in the weeks following Black Friday and through Christmas, up 2% from 2022.

3. Amazon’s debuts a Black Friday football game

As I wrote about for Forbes last week, Amazon secured the rights to the first-ever Black Friday NFL game. ‘Audience driven creative’ was hyped up as a turning point. My own analysis showed that the number of advertisers running dynamic ads were in the minority.

QR codes prompting shopping action were widespread, with various deals being promoted in-frame, and even making their way into presenter commentary. To the viewer, it was not a huge departure from the existing experience. QR codes have been used in Amazon’s Thursday Night Football games at least since the start of this year’s season.

The difference between this and other forms of linear TV advertising however, is that endemic brands (that is, brands selling physical items on Amazon) can continue to re-market to customers who interacted with an ad (or conversely those who did not interact with an ad) well after the game.

Besides the ability to collect ad revenue from advertisers, Amazon’s rights to broadcast the game had the obvious benefit of driving awareness and consideration of the deals on its site. Amazon also took the opportunity to promote deals on store items as well as media content like Amazon Prime Video and Amazon Music.

4. eCommerce sales grew faster than in-store retail

According to the U.S. Department of Commerce, e-commerce grew 7.75% in the third quarter of 2023, while total retail (which includes e-commerce) only grew 2% from the previous year.

Another data source, Mastercard Spendingpulse, reported that Friday eCommerce sales increased 8.5% year over year, while in-store sales only increased 1.1%.

It’s clear that consumers are staying home to shop, rather than braving the crowds for doorbuster sales.

But one interesting trend here is retailers like Walmart
WMT
are offering extended sales online, which don’t mirror the in-store events.

For example, Walmart’s first deal event began online on Wednesday, Nov. 8 at 3 p.m., but deals in stores only started Friday, Nov. 10. Its second deal event also started 2 days earlier online than it did in stores.

In 2022, there was a similar setup. Walmart ran rolling deal events every Monday in November, with Walmart+ members able to shop the deals from midday, before the deals were available to all customers online at 7PM, and in-store deals showing up days later.

5. Inflation’s effect on sales

Adobe’s oft-cited sales figures are not adjusted for inflation, which begs the question: how much does inflation factor into these sales figures? Adobe says that if the data were adjusted for inflation, it would show even stronger spending growth. That’s because prices were lower across the wide range of categories that Adobe tracks, the company said. It means the spending growth it reported was “driven by net-new demand, not simply higher prices,” Adobe said.

Salesforce data show that discounting played a significant role in driving demand during Cyber Week, with retailers offering an average of 30% off.

But putting the discounts from this shopping holiday aside, spending power has waned overall. Statista data (shared prior to the Black Friday event with its price discounts) show that retail sales are up 12% vs. 2021, but are flat adjusted for inflation.

Salesforce data show that the average selling price across all categories has grown 4% in 2023 versus 2022. But the increase varies significantly by each spending category.

6. Black Friday retains crown as the biggest sales day

Rob Garf, VP and GM for retail at Salesforce, said in an interview on the Jason & Scot Show podcast that there has been “a battle for supremacy between these two days” of Black Friday and Cyber Monday, since the latter term was first coined by the NRF in 2005. “Black Friday and Cyber Monday have gone back and forth over the years in terms of relative sales volume,” Garf added.

Online sales on Black Friday began eclipsing Cyber Monday in 2019, according to Salesforce data. And in 2023, the clear winner again was Black Friday.

Once again, the Black Friday/Cyber Monday shopping period has once again proven to be a dynamic and significant event in the retail calendar. Consumer behavior continues to evolve, and retailers adapt. Macro-economic trends like inflation shape part of the story, and may appear to be factors outside of retailers’ hands – but there are always examples of retailers and brands that choose to innovate and meet consumers where they are.

With the season not over until Christmas, there will still be more to observe and analyze in this ever-changing retail environment.