Cyber Monday Discounts Lower on Supply Chain Crunch: Adobe

Early shopping led to a lower Black Friday weekend e-commerce spend for the first time since Adobe began tracking high-profile holiday shopping days in 2012, emailed the analytics firm Monday. Sales were at the low end of projections, with Black Friday online sales down about $100 million from 2020 to $8.9 billion; Thanksgiving Day sales were flat with 2020 at $5.1 billion.

Adobe forecast consumers would spend $10.2 billion-$11.3 billion on Cyber Monday, making it the biggest online shopping day of the year. Last year’s Cyber Monday’s haul was $10.8 billion. “Online sales on big shopping days like Thanksgiving and Black Friday are decreasing for the first time in history, and it is beginning to smooth out the shape of the overall season,” said Taylor Schreiner, director-Adobe Digital Insights. “With 21 days in November driving over $3 billion in spend, what we know as Cyber Week is starting to look more like Cyber Month.”

For the first time, year-on-year discounts were expected to be weaker Monday, Adobe said, calling slimmer discounts a “persistent theme this season and another symptom of the supply chain crunch.” Cyber Monday is “still the best day to buy TVs” with discounts averaging 16% vs. 19% last year, it said; computer discounts were halved for Cyber Monday 2021 from 28% in 2020.

“Black Friday is no longer a single day for consumers to shop at retail for ‘doorbusters,’ but increasingly a weeks-long event that takes place both online and in stores,” Wedbush analyst Michael Pachter wrote investors Monday. Though they still visit stores Black Friday, consumers are “increasingly shopping online, particularly for consumer electronics,” he said.

Inventory levels at big box retailers were “much stronger heading into Black Friday than we anticipated given rampant supply chain constraints and component shortages,” Pachter said, citing Best Buy staff reporting “enough inventory in the back to replenish the shelves with gaming and PC peripherals where needed.” Wedbush was “surprised” at how little inventory appeared to have sold out in the gaming PC peripherals category this year, which Pachter attributed to more CE purchases being made online, less interest in upgrades without a console refresh this year and chip shortages limiting new gaming PC sales: “Fewer committed gamers will upgrade their peripherals before they are able to build or update their PCs.”

Inventory of Roku-enabled connected TVs and Roku players was “much better than expected,” Pachter said, noting connected TV inventory was lighter than in prior years “but much higher than we had anticipated.” Sell-through appeared strong for CTVs and for Roku players, particularly the discounted 4K streaming stick, he said. GoPro’s 2021 discounts “appear to be much deeper” than in the past, but its average selling prices are higher than in prior years, said Pachter. Logitech’s discounting “was much broader,” he said.

The COVID-19 pandemic era accelerated direct-to-consumer selling, said Pachter, saying companies Wedbush covers are in early stages of DTC sales but “may benefit as the gross margin upside from direct sales offsets some of the pressure from higher shipping costs this year.” GoPro’s Black Friday sales “were more compelling on its direct site, and it appears to have invested less this year in its retail presence with less shelf space in some cases and generally lower inventory levels” across stores.

Over the weekend, out-of-stock messages were up 16% from the prior weekend, Adobe said, warning that Cyber Monday shoppers “will have to be flexible, and they may not get exact make and model of products they want.” CE was a top category for out-of-stocks, behind only baby and toddler products, said the analytics firm. Consumers spent 245% more online Sunday than on the day before Cyber Monday last year; video game spending was up 350%, and gift card sales were up 414%. Top CE sellers over the long weekend were Amazon’s Echo Dot, Google’s Chromecast, Roku streaming sticks, the Nintendo Switch, Meta’s Oculus Quest 2, Acer and Lenovo laptops, and Samsung and Vizio TVs, Adobe said.

Usage of buy now, pay later services has slowed, an indication “consumers are feeling more confident about their spending capabilities,” Adobe said. Saturday and Sunday, BNPL revenue was 10% lower than the 2020 period; orders were down 23%. Curbside pickup grew 33% for the weekend vs. the comparable 2019 weekend and was used in a quarter of all online orders, Adobe said.

Smaller discounts are happening after 17 months of inflation online, with prices up 1.9% in October 2021, said Adobe. Offline prices were 6.2% higher: “E-commerce still provides the cheaper option for many categories,” Adobe said.

Noting the “stronger early season” as retailers encouraged consumers to shop early to avoid out-of-stocks, Adobe said consumers spent $99.1 billion Nov. 1-Nov. 28, 13.6% above the 2020 period. Some 21 days had over $3 billion in spending vs. eight days by Nov. 28 last year, Adobe said, saying early spending “shows not only the effectiveness of early deals in Oct. 2021, but also how much consumers have taken supply chain issues seriously.” Based on trends to date, Adobe expects the Nov. 1 to Dec. 31 season to be $207 billion, with a 10% year-on-year growth rate.

Sensormatic reported Monday that U.S. consumer visits to physical stores on Black Friday were 28.3% lower than two years ago. But consumers prioritized in-store shopping this season to avoid potential shipping delays, it said, with 65% of U.S. consumers planning to shop in stores for the holiday season to browse for gift ideas or see/touch products before buying. “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,” said Brian Field, Sensormatic senior director-global retail consulting, citing early shopping to avoid supply chain shortages and shipping delays. Sensormatic shopper traffic data showed Black Friday store traffic fell 28.3% vs. pre-pandemic levels.

E-commerce sales, which skyrocketed during the early days of the COVID-19 pandemic, are slowing, said NPD Monday, saying physical store sales have risen over the past few months, accounting for 64% of all retail sales in September. “Physical stores are more relevant today than they were before the pandemic,” said analyst Marshal Cohen. “Consumers are no longer buying primarily out of necessity and limited to online shopping which fell short of some expectations," he said. "Choice has reentered the equation and they are hungrier than ever for the experience of in-person shopping.”