Cyber Monday and Black Friday shopping in 2021 make up two of the biggest sales days of the year. The spending on these days gives business people an idea of how the rest of the holiday season should go. Learn what spending over Cyber Week tells us about trends in the economy and what you can do to prepare for the rest of the holiday season.
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First Reported Drop In Sales
The Adobe Digital Economy Index collects data from one trillion visits to US retail stores online, more than any other company measuring online data. Adobe’s findings based on this data provide a comprehensive understanding of holiday shopping in 2021.
For the first time since the Adobe Digital Economy Index was created, sales for Cyber Monday dropped 1.4% from last year’s sales. Previously, sales had only increased year-over-year, as 2020 was the highest recorded year for Cyber Week sales. Ecommerce sales were also record-breaking during 2020, despite pandemic issues with shipping and distribution.
Statistics from in-store traffic appeared promising at first, with Sensormatic reporting a 34.2% increase in traffic from 2020. However, when comparing this data with 2019, traffic was actually down 21.7%.
Black Friday shopping in 2021 was down 1.3%, even though sales for Thanksgiving Day remained flat from last year. Although sales for Cyber Week were down, however, it doesn’t mean sales will be down for the entire 2021 holiday shopping season.
Yearly Sales Could Be Record-Breaking
An initial look at Cyber Week sales could seem deflating, but if you take a step back to see the bigger picture, online sales are booming.
Despite the 1.4% drop during Cyber Week, sales for November rose 11.9% from last year. This is largely because many online shoppers decided to spread out their holiday budgets over the entire month rather than pack them into a single weekend. David Fisch, the general manager of Shopkick, noted that 58% of consumers shopping early were motivated to be organized during the holidays and to overcome issues with product inventory. 53% of consumers also sought to avoid holiday crowds. Another factor impacting this trend is that big-name retailers like Amazon began promoting Black Friday shopping 2021 deals as early as October.
The online trend continues to dominate in-store shopping, as Cyber Monday made almost an additional $2 billion compared to Black Friday shopping in 2021.
Changes in marketing over traditional approaches also stem from distribution issues that plagued the 2020 holiday shopping season. Long delays and shipping times meant that many people did not receive their items in time for the holiday season. This pain point has catalyzed the trend away from single weekend buying toward month-long shopping.
Inflation Causes Average Cart Value Increase
With all of the shipping issues during the 2020 holiday season, distributors ended up losing more than they were able to make. The losses in revenue caused many to pass the burden onto retailers in both online and brick-and-mortar businesses. In turn, prices for products rose to meet the higher fees accrued from shipping costs. Data from the Bureau of Labor Statistics’ Consumer Price Index shows that consumer prices are up 6.8% from November 2020 — the highest increase in almost 40 years.
This inflation of prices has been one of the major factors causing the average cart value to rise 13.9% from last year. As a result, 11.5% of Americans aren’t spending during the 2021 holiday shopping season, primarily lower-income shoppers. While the increase in spending among higher-income shoppers more than compensates for this drop, businesses catering to lower-income demographics will need to consider offering resources like Afterpay to help consumers “buy now pay later” to afford their merchandise.
Where All of the Money Went
The most popular items bought over Cyber Week were toys, video games, and electronics. Best-selling toys included Hot Wheels, Nerf toys, Baby Alive, Paw Patrol, Squeaky Toys, and Tamagotchi Pix. Video game winners were Spider-Man: Miles Morales, Mario Party Superstars, Just Dance 2022, FIFA 22, and Metroid Dread. Some big electronic sellers included Nintendo Switch and Switch Lite, Apple Watches, Apple Pencils, Airpods, laptops, Xbox Series S, Oculus Quest 2, and TVs. Businesses in these industries should take special note of this dynamic and work especially diligently to stay abreast of holiday shopping trends.
The Deals Weren’t As Good
Overall, what makes Black Friday shopping in 2021 such a big sales day is the huge savings people can take advantage of. Part of the reason for the low sales numbers during Cyber Week was the lower discounts offered in almost all major product categories.
Deals on electronics were only at -12%, according to Adobe, which was a far cry from the -27% discounts being offered in 2020. Discounts on TVs had a 5% drop from last year, apparel dropped 2%, sporting goods discounts fell from 20% to only 8%, and appliances took a similar hit.
The types of discounts that businesses are offering also changed for Black Friday shopping in 2021. Forrester, which created a study of 75 different retailers, found that fewer than half offered discounts that included their entire store. Most of the discounts were related to category- or product-specific promotions.
Heading Into The Holiday Season
As another winter holiday season approaches, we can draw some conclusions about how shoppers will spend their money.
First, it’s important to start promoting as soon as possible. The earlier the better, because numbers from Cyber Monday and Black Friday shopping in 2021 tell us people will be holiday shopping earlier in 2021 compared to previous years. Advertising your promotions sooner will give you a better chance to reap the benefits.
The pacing of promos is key to give consumers ample time to cash in on a sale. Marketers who did not change their promotions too soon saw the highest benefits on Black Friday/Cyber Monday, so this approach should be best practice during holiday marketing. Flash sales, if they are used, should be focused on popular products/categories, not low-impact ones, as had been standard practice in previous years. Urgency marketing is also a valuable tool to use consumers’ FOMO to get them to purchase immediately.
You also need to know your customer acquisition cost, because with major companies reducing their deals compared to previous years, you have an advantage. If you can figure out how much it costs to acquire a customer, you can determine the best deal you can afford to give customers to gain their loyalty over other brands.
Finally, even though you might not see the huge sales numbers you might normally expect on a single day, you can breathe a sigh of relief because you’re more likely to see the same amount come in over the entire month.
Black Friday/Cyber Monday Recap
Cyber Monday and Black Friday shopping in 2021 dipped year-over-year for the first time since the Adobe Digital Economy Index was created, but it’s not all bad. Shoppers are changing their habits and buying throughout the month rather than focusing their spending on specific days. Take advantage of this 2021 holiday shopping trend by promoting as soon as possible and offering deals other competitors can’t match.