American consumers will usher in the largest online shopping day in history on Monday. Following last week’s Thanksgiving and Black Friday sales, e-commerce companies will increase promotional discounts online. According to Adobe Analytics, e-commerce sales on Cyber Monday will reach at least US$12 billion.
According to McKinsey data, nearly 80% of consumers plan to "downgrade their consumption" during holiday shopping, buying cheaper products or giving up on purchases. Economists and investors rely on e-commerce sales to gauge U.S. economic indicators as the cost of living increases after months of inflation and rising interest rates. More and more consumers are using buy now, pay later (BNPL) services to purchase goods, and Adobe Analytics estimates that the amount spent through BNPL will reach $782 million on Monday, an increase of 18.8% from last year. As of Sunday, BNPL purchases accounted for $300 million of online sales, up 14% from the same period last year.
Online spending on Monday was estimated at $12 billion to $12.4 billion, according to Adobe, surpassing the $11.3 billion spent during the same period last year. The data group said the increase was attributable to strong demand from consumers, rather than just an overall increase in prices, and would have been higher if adjusted for inflation. Online spending during Black Friday was higher than expected, reaching $9.8 billion, a year-on-year increase of 7.5%, and online spending during Thanksgiving was $5.6 billion, a year-on-year increase of 5.5%.
Over the holiday weekend, annual growth in online shopping surged faster than in-store sales. U.S. retail sales (excluding autos) rose 2.5% on Friday compared with the same period last year, according to Mastercard SpendingPulse, which compiles sales data across all forms of payment in stores and online, not accounting for inflation.