Briefing

Early reports for Black Friday 2023 show record-breaking success, with Adobe estimating +7.5% growth in consumer spending. Similar to 2022, we have seen that many customers delayed purchases  until Cyber Monday, with a +9.6% year-on-year spending increase. Cyber Monday was also where the difference in online vs. in-store purchases was the most stark, in favour of online. 

The broad trends of Black Friday-Cyber Monday (BFCM) weekend align with recent years. CTC found the average discount rate jumped from Black Friday to Cyber Monday, remaining relatively consistent with 2022. This indicates retailers capitalised on buying sentiment and did not need to over–discount to see year-on-year growth. And with Google finding 50% of Christmas shopping happens after Cyber weekend, peak isn’t over yet.

What differs this year is the context leading up to the weekend – with increased discounts in September and October. Spreading the risk associated with the BFCM peak allows for lower competition costs and smoother order fulfilment, whilst meeting the demands of those purchasing early to spread costs – estimated by Google to be around 50% of holiday shoppers. 

Your chosen offer is key

Despite increasing scepticism towards deal validity, BFCM  remains a significant buying period, especially in categories such as Fashion, Home and Beauty – which were top-selling verticals for Shopify merchants this year. 

New online shopping features, such as Google Chrome’s Price Tracking, are making price comparison even easier, emphasising the need for a clear deal or proposition. The type of offer you choose is crucial, even if it involves no discount (as was the case for 30% of retailers in a 2022 study). 

In this case, adjust messaging and budget accordingly if price competitiveness is known to be weaker. Rising competition has led to increased costs for advertisers with Meta CPM’s up +11%, something to anticipate whether participating in Black Friday deals or not.

On the flip side, embracing the right discount tactic can drive BFCM success. Consider Gift With Purchase or ‘Spend X, Save Y’ offers to increase basket size. When considering sitewide offers, assess the need to make the sale coded, as it may add unnecessary friction to the checkout. 

Looking ahead

The National Retail Federation predicts sales growth in December at 4% vs. last year, a lower level than seen during the pandemic, but broadly in line with the pre-covid trend. 

At the same time, we consistently see the share of online BFCM sales grow, to the detriment of store foot-fall, in part thanks to easier price comparison. The online purchase journey is often long in the making however, with 48% of BFCM sales stemming from customers who engaged ahead of the event. 

For advertisers, this highlights the need for preparation, including First Party Data collection, ahead of time. The right discount strategy is also crucial to drive the metrics that matter – be that AOV, New Customer Acquisition or efficiency. 

We can safely assume ad inventory costs will rise over each BFCM; the challenge is to offset this with gains to conversion rate. Nailing the right promo strategy and audience-building ahead of time will enable you to capture that strong purchase demand.