Black Friday online retail rises - Adobe and Salesforce crunch the numbers

Stuart Lauchlan Profile picture for user slauchlan November 28, 2022 Audio mode
Summary:
Black Friday is past and Cyber Monday is here. How is the online retail spend holding up? Salesforce and Adobe have the data.

numbers

So, how did it go? Black Friday, I mean. Over the past couple of weeks, we’ve had more and more predictions and crystal-ball gazing on what the 2022 Holiday season would look like for online retail.

A common theme of this year has been a rebalancing of the omni-channel business model, away from the soaring online growth rates of a locked-down population and back towards the physical store. That’s resulted in a decline in those online growth rates. Marry that to rampant inflation, a generally highly uncertain macro-economic environment and the ripple effects of a land war in Europe, and 2022 hasn’t been the post-pandemic year of ‘back to normal’ that some believed/hoped/kidded themselves that it might be.

But we’re all determined to have a great Holiday season, right? Seemingly so if the initial stats to come in from Black Friday are anything to go by. According to Adobe Analytics, Americans spent $9.12 billion online on Friday alone. That beats the firm’s expectations of $8.9 billion and represents a 2.3% growth rate on last year.

Adobe Analytics measures e-commerce by tracking transactions at 85 of the top 100 internet retailers in the US. Vivek Pandya, lead analyst, Adobe Digital Insight, commented:

Some shoppers are returning to physical stores for Black Friday, after two years where pandemic-related anxieties kept many people at home. E-commerce demand has remained strong regardless, and Black Friday is set to surpass $9 billion in online sales for the first time, as consumers come to value the ease and convenience of shopping from home."

Additional stats of note from Adobe’s data so far:

  • Smartphones accounted for 55% of online sales on Thanksgiving Day itself, up from 51% last year. Black Friday was expected to see 53% of online sales come from smartphones.
  • Discounting is driving up Average Order Value, which is up 12% throughout the season compared to the same period last year.
  • Curbside pick-up, one of the lasting legacies of the pandemic’s impact on retail, has been used in 19% of all online orders so far this month (Nov 1–24) for retailers that offer the service, compared to 21% during the same period last year. For this past week (Nov 18-24) revenue from curbside pick-up was up 31% sequentially.

Salesforce global view

Adobe’s numbers cover the US only. Salesforce on the other hand makes available data both from the US and around the world, providing insight into geographical differences. So, for Black Friday in the US, Salesforce’s analysis suggests a 12% year-on-year increase in online sales performance, with the Average Order Value coming in at $106, up 0.6%.

But inflation took its toll. As Salesforce Retail General Manager Rob Garf told diginomica last week, the number of items that consumer’s budgets can afford to buy is impacted by rising prices. So in terms of unit growth, the US comes in at 3.5 items per order, down two percent year-on-year. There are some major variations in terms of how much more per item that shoppers had to pay. Electronics & Accessories are 34% more expensive this year, but heavy discounts in, for example, Beauty & Make-up have seen prices there drop 15%.

On a global basis, Black Friday sales were up three percent year-on-year. Again there were strong regional variations. In the UK & Ireland, online revenues were down 13% on Friday with the number of orders placed down by 11%, while in Germany those figures translated to a 12% and 15% decline respectively.

But in Australia & New Zealand, the decline in revenues was only one percent, while orders placed grew by three percent. Italy and Eastern Europe managed positive sales growth of one percent and four percent respectively, with the latter also seeing eight percent growth in the number of orders placed. Meanwhile the biggest growth fall came from Japan, where online sales ere down 31% and orders placed by 17%.

In terms of discounting, Salesforce’s data suggests that the best day for getting a good deal - to date - was a tie between Black Friday and Thanksgiving day itself, where there was an average rate of 31% off in the US. Outside of the US, discounts were less high. The UK & Ireland, for example, saw an average discount rate of 23% on Black Friday, while Australia & New Zealand came in at 24% and France on 29%. Eastern European consumers could look for a 34% discount on Friday, a slight dip on the previous day where the figure was 39%.

In the US, Apple Pay has seen a boost as a payment method with 58% growth year-on-year, while credit cards have declined 12%. That said, over half of all online orders (52%) were still transacted using a credit card, while Apple’s share of use is only six percent. Outside of the US, Apple’s performance varies. For example, in the UK & Ireland, adoption growth for the firm's payment method was 15%, while market share of usage is 11 percent. That said, almost every other form of payment saw negative adoption rates. Credit cards were down 23%, while PayPal was down 20%, for example.

Meanwhile in Germany, the Apple Pay adoption rate growth is 163% year-on-year, but its market share of use for online orders on Black Friday was only one percent. In Japan, the adoption rate is 23,311% year-on-year, but with a usage share of zero percent (statistically), with the Japanese sticking to good old-fashioned credit cards (64%).

Perhaps encouragingly, given the unstable economic climate, consumers appear to be turning away from finance offers and paying on the ‘never, never’. In the US, finance option growth rates were down 13% year-on-year as a payment method, while in the UK & Ireland the figure is down 14% and in Japan by 16%. That said, in Eastern Europe the adoption growth rate is 24,537%, but that’s still only a one percent usage rate for online transactions.

My take

So far, so pretty much in line with expectations. What now? It’s Cyber Monday today and Adobe is predicting $11.2 billion in online sales. For the whole Thanksgiving weekend, the firm is looking for spending of around $34.8 billion, up 2.8% year-on-year. For the entire Holiday season, Adobe is estimating total sales of $209.7 billion, again up 2.5% on last year if that comes to pass. We’ll pick this up again tomorrow.

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