Black Friday and Cyber Monday Predictions for 2023
How dependent are you on securing a successful Cyber Day/Week/Month?
The significance of Cyber Week has been undeniable in the retail industry. Last year's Cyber Week was not only successful but also played a crucial role in shaping the retail year. According to the Australian Bureau of Statistics (ABS), the sales data for November 2022 revealed a remarkable 1.4% increase in turnover, setting a new record high. When annualised, this growth equates to an impressive 7.7%. This leads us to an important question: Can we expect Black Friday 2023 to be as successful as 2022? To answer this, let's explore the five key trends that we need to be mindful of.
1. Customers Have Been Holding Out for BFCW Sales
It's evident that customers have been eagerly awaiting the Black Friday and Cyber Monday sales, considering the growing enthusiasm surrounding these annual shopping events. The extraordinary sales lift of 0.9% in September suggests that while that month was unusually robust for retail, consumers have pent-up demand. With the cost of living at such high levels, people are actively seeking bargains and discounts, making Black Friday and Cyber Monday sales even more appealing.
According to the Australian Retailers Association (ARA) and Roy Morgan, shoppers are expected to spend a whopping $6.36 billion across the four-day BFCM weekend in 2023, representing a significant increase of 3.0% from the previous year.
ARA CEO Paul Zahra emphasised that Black Friday has solidified its status as a marquee retail event, even amidst a challenging economic landscape. "Similar to Halloween, Black Friday started as an American shopping tradition but has grown into a global phenomenon, with millions of Aussies set to participate again this year," he added.
2. Spend Will Be More Heavily Scrutinised
One thing that's clear in 2023, and certainly since about March, is that encouraging customers to spend what they would normally spend has been hard - everyone is looking to make a saving. We believe customers will complete their Christmas shopping during the upcoming shopping events, but their overall spend will be down. So, if you balance that out with growth in frequency and decline in the basket, it would be difficult to see substantial growth in dollars.
As the cost of living continues to be a concern for consumers, many are adopting a more budget-conscious approach. This trend is reflected in the ARA's provisional forecasts, which predict a marginal increase of just 0.1% in pre-Christmas spending for 2023. This represents an increase of $74,000, indicating that consumers are becoming more selective in their spending habits. Black Friday and Cyber Monday sales are seen as an ideal opportunity for shoppers to grab bargains and save on expenses leading up to the Christmas season.
ARA CEO Paul Zahra emphasised the importance of the Black Friday sales event as a time for "bargain-driven shoppers to get ahead of the Christmas rush and have their gift delivered in time for the big day." This statement underscores the expectation that consumers will be more discerning when making their BFCM purchases.
3. Ecommerce Will Continue to Slow as a % of Total Sales
After witnessing such significant growth in 2020-21, e-commerce in Australia during 2022 was, putting it bluntly, flat. And we believe this trend is going to continue. That's not to say that e-commerce won't increase, it just won't increase anything like it has historically. That is, our adoption of e-commerce is maturing at around 19% and will probably stabilize around the low 20s in the foreseeable future.
While e-commerce has seen substantial growth in recent years, its contribution as a percentage of total retail sales is expected to slow down. The data from the Australian Bureau of Statistics reveals that, although online sales are a significant component of the market, they account for a relatively small portion when compared to in-store sales. Despite the popularity of Black Friday and Cyber Monday, the growth in e-commerce as a percentage of total sales is anticipated to be less rapid than in previous years.
4. Convenience Is Becoming More and More Important
Logistics and a lack of serious infrastructure investment have clogged retail's ability to move stock quickly and to give the consumer a completely satisfying experience. However, Black Friday could see an exponential uplift in sales this year for click and collect and traditional in-store sales. The importance of convenience and logistics cannot be overstated in the modern retail landscape. As the retail sector faces logistical challenges due to infrastructure limitations, consumers are placing a higher premium on convenience in their shopping experiences.
BFCM sales events are renowned for their significant in-store and online traffic. This emphasises the importance of efficient logistics and delivery services to ensure that shoppers receive their purchases in a timely manner. Retailers that can offer a seamless and convenient shopping experience are likely to benefit the most from these sales events.
5. US Customers Have Chosen to Reduce Their Focus on CW…Are We Next?
In recent years, there has been a shift in consumer preferences away from traditional Christmas shopping in some regions, including the United States. Consumers are opting to reduce their focus on Christmas gift purchases, possibly influenced by changing economic conditions or evolving cultural norms. This trend raises the question: Could Australian consumers follow suit in the future?
Statistics out of the US have suggested that Black Friday and Cyber Monday have been strong but consolidating events over the last few years. That is, the increases have been gradually declining. This may well be due to economic uncertainty, inflation, political uncertainty, and supply chain issues. But maybe, Black Friday and November are maturing in the US.
While the ARA and Roy Morgan predict a modest increase in pre-Christmas spending for 2023, the relatively marginal growth indicates that consumers are being more budget conscious. Whether this translates to a more significant shift away from traditional Christmas shopping, as seen in the US, remains to be seen. However, the increasing importance of Black Friday and Cyber Monday sales suggests that consumers are looking for opportunities to make budget-friendly purchases, which aligns with the global trend of re-evaluating traditional spending patterns.
In conclusion, the predictions for Black Friday and Cyber Monday in 2023 indicate a growing enthusiasm among consumers, heightened scrutiny of spending habits, and a continued focus on the importance of convenience and logistics in the retail industry. While e-commerce growth may slow as a percentage of total sales, the significance of these sales events remains robust. As for the future of traditional Christmas shopping, it's a topic that warrants further observation as consumer behaviour evolves.