November 28, 2023 – 3:32 PM UTC
(Reuters) – Deep discounts on everything from beauty products and toys to electronics during the Thanksgiving weekend enticed U.S. shoppers to splurge about $38 billion online, signaling a strong holiday shopping season even as economic uncertainty swirled.
Online consumer spending jumped 7.8% during Cyber Week, or the five days from Thanksgiving through Cyber Monday, according to data from Adobe Analytics, outstripping initial expectations for a 5.4% rise.
In the lead-up to the crucial shopping season, industry forecasters including Deloitte and retailers like Walmart (WMT.N) and Macy’s (M.N) warned of cautious consumer spending due to sticky inflation constraining budgets. But blockbuster deals rolled out from Thanksgiving Day through Cyber Monday helped spread the holiday cheer for bargain-hunters.
Sales on Cyber Monday jumped a better-than-expected 9.6% to a record $12.4 billion, as shoppers clicked “buy” on Hot Wheels toys, PlayStation 5, smart watches and kitchen appliances.
“The record online spending across Cyber Week … shows the impact that discounts can have on consumer demand, especially with quality products that drove a lot of impulse shopping,” said Vivek Pandya, lead analyst at Adobe Digital Insights.
Adobe said discounts peaked at 31% for electronics and at 27% for toys on Cyber Monday, which is typically the biggest online shopping day in the U.S.
In a bid to stretch their Christmas budgets, shoppers are also leaning on Buy Now, Pay Later (BNPL) services such as Klarna or Affirm to avoid the extra fees and interest that come with credit card payments.
A record $940 million worth of purchases were made through BNPL on Cyber Monday, surging 42.5% from last year and trouncing Adobe’s earlier estimate for an 18.8% jump.
Payments firm Block (SQ.N) also noted BNPL transactions through Afterpay surged 19% over the weekend, while Klarna said it saw a 29% increase in orders placed by U.S. shoppers on Black Friday.
Reporting by Deborah Sophia and Juby Babu in Bengaluru; Editing by Pooja Desai and Devika Syamnath