Black Friday results exceed expectations to prove that holiday spending remains strong despite economic turbulence.
Last week we predicted that omnichannel would rule Black Friday this 2022 as shoppers shift back to in-store shopping, which was largely true - MasterCard SpendingPulse showed that U.S. in-store sales were up 12% year-over-year on Black Friday. But the results also showed that online has more potential that we or analysts predicted…
Spending remains strong despite economic turbulence
Perhaps what we didn’t expect was that online sales would remain as strong as they did - e-Commerce sales rose more than in-store at 14% - and inflation didn’t seem to deter holiday spending.
A record $9.12 billion was spent online on Black Friday, up 2.3% over Black Friday 2021. That followed $5.29 billion in online spending on Thanksgiving, up 2.9% over last year.
Meanwhile, Shopify reported strong sales growth at Shopify merchants, both online and offline for a record $3.36 billion in sales, up 17% from Black Friday 2021. The global platform hit an impressive sales peak of $3.5 million per minute at 12:01 p.m. EST on Black Friday.
Discounts are getting steeper to inspire consumers to spend
Across all retailers, Black Friday discounts for apparel peaked at 13.8%, electronics 23.4%, and toys 31.8%, according to Adobe. According to our data, air fryers, one of the most popular Amazon.com search terms on Black Friday with a Search Frequency Rank of 21, saw huge discounts - some over 50% by popular brands NinjaFoodie and Cuisinart.
However when it comes to some categories, steep discounts can also come at a price, particularly for high demand products like air fryers. In the UK, “air fryer” was the most searched for product during the week of 5th September 2022 as shoppers seek energy-saving products to combat the cost-of-living crisis. As such, by Black Friday, many brands were already out of stock. It’s a reminder for brands just how critical it is to start your inventory planning early to decide which products you want to push during Black Friday and make sure you’re ready with inventory well ahead of this peak selling period.
BNPL is on the rise
Buy now, pay later (BNPL) orders jumped 78% the week of November 18 as compared to the previous week. Shoppers are spreading their purchase with BNPL in preference to credit cards because it enables them to buy the products they want without opening a line of credit - Klarna reports that 16 out of 17 shoppers prefer BNPL than credit cards in 16 out of 17 countries. For brands it’s a good signal that, across markets, people still want to spend, but they’re looking for more flexible ways to buy without incurring credit card interest. We predict alternative payment methods like BNPL will only increase in popularity as we get closer to Christmas.
Amazon no longer rules Black Friday
This year Walmart was at the forefront of shopper searches for holiday deals. Walmart topped online searches for discounts as of Black Friday morning, according to Captify. Searches for Black Friday discounts on Walmart were up 386% year over year, overtaking Amazon which last year ranked first. This year, Amazon ranked fourth behind Target and Kohls. Walmart went into Black Friday on a high, having delivered strong quarterly results in mid-November. The company reported gaining market share in grocery as well as improving their inventory position. The rising popularity of Walmart, Target, and Kohls supports our prediction that omnichannel would rule Black Friday, and FMCG brands who want to make the most of these key events need to take a nuanced omnichannel approach to influence shoppers.
What were shoppers searching for?
We looked at Amazon Vendor Central data to find out what shoppers were searching for on Black Friday. The most searched for key terms, as measured by Amazon’s Search Frequency Rank, suggest shoppers used the opportunity to get an early start on holiday shopping - searches for “christmas gifts” were up 55% from Black Friday 2021. Other trending searches included:
Apple products, particularly iphones, ipads, and airpods as shoppers seek deals on high end electronics.
Women’s jewelry and fashion, particularly boots, sweaters, and dresses as well as warm weather gear as shoppers seek cozy comfort as temperatures drop. (We noticed similar trends during Amazon’s Prime Early Access Sale last October as “electric blankets” and “oodie” were among the top terms - patterns that shoppers may be using sales events as opportunities to purchase products that could mitigate rising energy costs.)
Toys, particularly squishmallow and LEGO - Adobe analytics data further predicts that toys will be among the most sought after gifts for holiday 2022.
Source: LEGO Official Store
Gaming, with Nintendo switch and PS5 being the most sought after consoles. We’ve historically seen searches for gaming systems like switch increase prior to Christmas as brands target parents in their advertising and announce the launch of new gaming titles.
Christmas-related purchases - and it’s not just gifts, trees, and ornaments. Among the search queries that increased the most relative to Black Friday 2021 were apparel. Will everyone be wearing Christmas onesies and ugly sweaters this holiday season?