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Record 2023 Cyber Week Spending Signals Online Shoppers Are Still Going Strong

Despite inflation and cautious shoppers, consumers broke eCommerce records with the help of creative financing options

  • December 6, 2023
  • /
  • CANOPY Management
A man and a woman dressed in holiday clothing in front of a christmas tree looking at an open laptop computer

Although the phrase was used in a non-shopping context much earlier, a retail-focused “Black Friday” first appeared in The New York Times on November 29, 1975. 30 years later in 2005, Cyber Monday – how we’ve come to think about it – began. 

Now, those two dates have combined to become the biggest online sales event of the year. 

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According to data from Adobe Analytics, U.S. shoppers aggressively sought out online discounts during Cyber Monday 2023, ultimately setting a number of new spending records. 

To be clear, over Cyber Week 2023, online shopping was the name of the game. 

As reported by Mastercard. eCommerce sales over the five-day Cyber Week showed a 7.3% increase over last year, contrasting sharply with the modest 1.5% year-over-year rise for in-store purchases. 

The data signals that consumers continue to prefer the convenience of home delivery to battling with the crowds for store promotions.

An electronic billboard showing a series of data points

Black Friday / Cyber Monday – By the Numbers

Someone serving a plate filled with holiday cookies in front of a blurred background of a festive holiday table

Cyber Week 2023 – Is It Too Much of a Good Thing? 

With the ever-increasing eCommerce competition, it’s no surprise that rather than constantly lowering prices, Amazon brands are carving out online-selling real estate by broadening their marketing efforts. 

Major retailers stretched out Cyber Week savings beyond the usual timeframe, with Petsmart, REI, Zappos and Nike among those companies continuing holiday promotions well past Cyber Monday itself.

Data from Salesforce supports the notion of earlier holiday discounts, revealing that retail sales kicked off sooner in 2023 compared to the prior year.

According to the National Retail Federation, over half of shoppers capitalized on premature deals, with 35% partaking in pre-Thanksgiving week spending.

Muted Black Friday enthusiasm signals budget-conscious consumers holding out for steeper markdowns ahead. This thriftier shopper mindset paves the way for a more subdued holiday sales season and potentially underwhelming Q1 earnings in 2024. 

This appears to be several years in the making. Almost three years ago, covid stimulus funds and excess pandemic savings fueled free-spending and permitted retailers to pull back on promotions in 2021. Then, supply chain turmoil soon overloaded inventories, and forced retailers to unleash deep 2022 clearance discounts to sell languishing stock. 

While those radical price cuts resuscitated revenues, they may have also set unrealistic bargain-hunting expectations for this year’s more selective shoppers. 

Data firms are predicting comparable holiday sales sluggishness in the coming months. Adobe Analytics projects a 4.8% uptick in US online revenue over the next two months compared to 2022. Though outpacing last year’s growth, this pace remains far below the 13% average annual pre-pandemic spike.

Someone wearing a suit jacket and a gold watch handing a gold Visa card to a merchant using a handheld card reader

Point of Sale Financing Options are Skyrocketing 

Rising credit card rates and retailer fees are prompting shoppers to explore new payment options this holiday season. With budgets squeezed by high inflation and interest hikes, “buy now, pay later” (BNPL) solutions are gaining appeal. 

According to Sezzle CEO Charlie Youakim, consumer caution persists even as Cyber Monday spending spiked. Adobe Analytics data reveals BNPL adoption skyrocketed 42.5% year-over-year on that day alone. Youakim attributed the surge to shoppers seeking “to manage tighter budgets” and avoid extra charges from traditional payment methods.

The dramatic BNPL uptick indicates shoppers increasingly value flexible financing. As prices and rates continue climbing, retail analysts expect alternative payment solutions to become more mainstream, especially among younger, mobile-first consumers.

Amazon Advertising Margins Were Narrow

A number of Amazon ad agencies are in alignment that even though revenue growth and profitability are both increasing, that rise has been accompanied by elevated Amazon pay per click (PPC) expenses, and a decrease in return on ad spend (ROAS). 

This all adds up to a pretty small profit margin to play with. 

Advertising on Amazon has simply become more competitive. The fact that over Black Friday ROAS decreased (relative to 2022), might just indicate that Amazon shoppers were clicking on ads but holding out for Cyber Monday – and the hope of larger discounts – before clicking the buy button. 

A blurred image of a young man behind a table piled with school supplies including bllks, an apple, pencils, eyeglasses and an alarm clock

What Can Amazon Sellers Learn from Cyber Week 2023?

The fourth quarter is crunch time for many online businesses. Financial futures rely heavily on performance during the holiday rush. With the year winding down, Amazon sellers are pulling out all the stops in hopes of strong Q4 sales that will propel them to hit key targets and end the year on a profitable note. 

This is especially true for those sellers that have to answer to investors, boards or lenders.

The big question is how to make sure that you’re taking full advantage of the busy shopping season. It’s not enough to cross your fingers and hope that a significant percentage of the sales will come your way. 

Here are a few ideas how you can set yourself up for success throughout the rest of Q4. 

Inventory Management Matters More Than Ever

The fourth quarter brings a tidal wave of customer demand that companies must adequately prepare for. Solidifying your supply chains and making sure you have greater quantities of key inventory, you stand a much better chance of meeting rising order volumes. 

Though matching exponential Q4 surges can be challenging, examining historical data gives you the best shot at having inventory on hand during this critical period. Take advantage of the increase in artificial intelligence-boosted software that can give you much more authentic projections of order quantities and real-time inventory estimates. 

Make Sure Your Amazon Product Listings are Fully Optimized

Captivating product listings help compel purchase during the high-stakes holiday rush. Enhancing titles and descriptions with seasonal keywords and search terms tailored to your top Amazon products resonates with shoppers that are increasingly focused on the perfect holiday gift. 

Employing sharp, evocative lifestyle imagery and video can place the spotlight on products and lead to spikes in fourth-quarter findability and conversions. Sellers who maximize Amazon A+ Content, building out immersive descriptions and supplemental visual assets, make it possible for their listings to stand out amongst the cyber flurry of holiday storefronts. 

Take advantage of the fact that Q4 buyers can be more impressionable during a celebratory holiday  mindset. Persuasive copywriting, SEO-rich narratives help drive conversions during this final sprint towards eCommerce profitability. 

Don’t Waste Your Advertising Dollars

Instead of an Amazon advertising arms race, and rather than indulging in excessive spending, the fourth quarter should be viewed as a time to carefully comb through your advertising budget to establish profitability “guardrails.”

On key shopping days such as Black Friday and Cyber Monday, many experienced Amazon ad specialists are looking closely at their bids and budgets hourly in order to prevent excessive expenditure and safeguard profit margins.

How Canopy Management Can Help

The 2023 holiday shopping season has already broken new records, even with economic uncertainty looming. As Amazon sellers look back at their Cyber Week numbers, important lessons emerge about consumer behaviors, competitive trends, and strategies for eCommerce success. 

Inventory planning, online listing optimization, alternative payment options, and restrained advertising are key ingredients sellers must embrace to make the most of the critical fourth quarter sales momentum.

eCommerce sellers that take the time to fine-tune their Amazon advertising and SEO to match emerging consumer patterns are going to stand a better chance of ending this year in the black.

If you’d like to put your finger on the scale and help ensure that you’re one of those fortunate sellers, now is a great time to reach out to the experts at Canopy Management. 

Canopy Management is a full-service marketing agency for Walmart and Amazon sellers. Our team consists of former Amazonians, multi-million dollar sellers, and award-winning experts. 

When you consider the many ways that Canopy Management can help you grow your business, you’ll see why selling on Amazon is much easier “under the Canopy.”

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