November 2021 Cyber Week Wrap Up

Throughout our research and Q4 analysis, we have noticed several trends in the e-commerce sector. Among these trends are shopping early, higher product prices to compensate for shipping costs and inflation, and shipping delays. Black Friday and Cyber Monday sales decreased year-over-year, but companies are optimistic that this will be a successful year yet for retailers. According to a recent article from CNBC,  "Adobe anticipates digital sales from November 1st to December 31st will hit $207 billion, which would represent record gains of 10%." 

Since 2020 and the massive increase in e-commerce sales, businesses have been scrambling to keep up with demand and predict consumer shopping habits as the world settles a bit into living with COVID-19 and adjusting to the shipping crisis that seems to be looming until the middle of 2022. As consumers are worried about shipping delays by carriers, it appears that businesses have started their sales and promotions early to encourage customers to shop before Black Friday. While we won't know if those companies succeeded in avoiding the Black Friday/Cyber Monday rush, we can tell about the numbers for the biggest shopping weekend of the year. 

Pre-Cyber Week

Several companies, such as Nordstrom, Target, Walmart, and Home Depot, began promoting and holding sales as early as November 1st to encourage consumers to shop early. In the event that retailers did not begin their sales on November 1st, many decided to start their holiday sales on Singles Day (Double 11 Day) on November 11th. This event was created in China, put on yearly by Alibaba, and has since been adopted by retailers worldwide. Although less popular in the United States, it is one of the more influential shopping days of the year. Alibaba and JD.com racked up around $139 billion of sales across their platforms on China's Singles Day shopping event, setting a new record. Slowly, this day of sales has been adopted by American companies as a mark of the beginning of the holiday shopping season. 

This year, the ICSC (International Council of Shopping Centers) performed a holiday intentions survey that found that 81% of shoppers surveyed planned to shop in physical stores but only 45% said they were likely to visit a mall or shopping center for their holiday shopping. Though consumers might avoid large crowds by skipping the malls, spending is expected to be the same, if not more, by those same consumers. The ICSC survey also found that 73% of Americans surveyed plan to spend as much or more on holiday gifts as they did last year. Though we can't say consumers spent this money on Black Friday, we know much more time left in the season and weeks before account for.

Despite the fact that businesses are happy to see growth and a strengthening economy, supply chain bottlenecks and shipping delays continue to leave customers unsatisfied. Experts in the shipping field expect the shipping crisis to last until 2023 but note that it could be cleared up by the end of 2022 with government assistance. In October, President Biden signed a 24/7 shipping port plan that's goal was to help clear up the backload. Though companies are happy that the White House has decided to do something, supply chain analysts say it's not enough and will only dictate a 1-2% maximum. With companies expecting a lot of "out of stock" messages on their websites and in stores, it doesn't seem to stop consumers from wanting to spend. If anything, it seems to be frustrating the businesses more than the consumer. 

Black Friday 

The amount spent on Black Friday this year was $8.9 billion, down $100,000 million from 2020 when the total spent was $9 billion. A holiday shopping report by Adobe Analytics suggests that the drop in spending might be a result of the encouragement of early spending and consumers being concerned about their ability to obtain items due to inventory shortages and the shipping crisis. Sensormatic Solutions' data shows foot traffic was up 48 percent over last year. Keep in mind, though that's significantly more shoppers than 2020, it is still down 29% from 2019.  Hence, it's better than last year, but down over compared to pre-covid numbers. Sensormatic Solutions continues to report that, “While in-store shopping is still not back to 2019 levels, more shoppers felt comfortable visiting stores in person this Black Friday than in 2020.” 

Several factors could also contribute to the decline of Black Friday-specific shopping this year, including the fact that retailers and industry experts alike have been urging consumers to get out there and shop early for months. Because of this, many are suggesting that Cyber Week could actually be renamed Cyber Month.  "Black Friday is kind of over as an idea," says Zachary Rogers, an assistant professor of supply chain management at Colorado State University. "Prime Day was October, Black Friday and Cyber Monday in November, holidays in December. It's basically Black Fall." Additionally, with the increase of popularity and sales on Singles Day (November 11th) and the push to shop earlier due to supply chain issues, the emphasis on "Black Fall" seems to be more relevant than ever before. 

Cyber Monday 

Ahead of the explosive e-commerce shopping day, companies had no intention of slashing prices as drastically as they have in the past. According to the New York Times, Cyber Monday discounts were expected to be weaker due to supply chain issues, factory shutdowns, and port backups plaguing retailers. As the day has passed, we are able to share the results. Adobe Analytics released data on Tuesday, November 30th reporting that consumers spent $10.7 billion on Cyber Monday, which decreased by 1.7% year over year. It is the first time since 2012 that Adobe Analytics has reported a decline in sales year over year. Similar to Black Friday, experts speculate that the decline in spending is due to early holiday spending beginning on November 1. In addition, companies did not have to cut prices as much as they used to due to inflation and a stronger middle class than in 2020. 

The holiday shopping season now only has 25 remaining days, and a key question is, did everyone finish their holiday shopping? Even with all this data, we still don't know what the rest of this season will hold.  The last-minute shopper will always exist. However, are those who normally end their shopping a week or more before Christmas already done? We believe that most consumers are aware of the shipping delays, decrease in markdowns, and labor crisis, which lit a fire to get their shopping done early this year. But, we also believe there is a lot more shopping to come. 

Consumer spending is at an all-time high, and consumer economic strength is rising, which leads to consumers spending more or saving up for the item they desire. Companies are even expecting an increase in sales starting in January and February because those items they have been desperately waiting for will arrive in port. Consumers will be excited to see things back in stock, but since these items will now be a season late or a technological update behind, companies will need to liquidate these products, which means deep discounts for the consumer. 

As for the small-parcel shipping delays? Things seem to be progressing according to plan. Even though that plan may not look great, it should lead to more accurate shipping times and a more precise last day to ship. While these shipping times and last-day shipping deadlines are not what the consumer is used to, almost every small parcel shipping company has been trying to combat the labor shortage with higher than average salaries and benefits to bring in employees to handle their shipping volume. Though businesses are still struggling to find seasonal employees, small parcel logistic shippers seem to keep up with demand thus far. Only time will tell, but we are expecting big things for the rest of 2021.