Scrambling for Baby Yoda toys… The force isn’t with you this holiday season. For the first time ever recorded, online shoppers spent less on Black Friday and Cyber Monday than the year before. But it isn’t because Americans aren’t splurging: Holiday shopping is expected to hit a record $843B this season. And while online sales dropped during Cyber Week (Thanksgiving through Cyber Monday), online sales from all of November rose from last year.
Extra pricey and extra delayed… As the global economy recovers from the pandemic, inflation has hit a 31-year high and global-supply clogs have led to major shipping delays. Two shopping trends have emerged:
- Early sales: Target, Amazon, Macy’s, and Best Buy launched Black Friday-style deals in October to get ahead of shortages, so buyers started shopping earlier and spreading their purchases out over time.
- BNPL boom: To help pay for pricier products (#flated), shoppers paid with “buy now, pay later” 5X more in November than pre-pandemic. PayPal saw a 5X increase in installment payments on Black Friday vs. last year, and rival Klarna saw a 4X increase.
The holiday “spread” is replacing the holiday crunch… And we’re not talking Nutella and gingerbread cookies. Two global economic issues — inflation and supply disruptions — are transforming shopping habits. Holiday shopping is lasting longer and being paid for in installments more often. Still, spread out doesn’t mean small: Spending is expected to keep rising next year despite supply constraints and rising prices.