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Cyber Monday 2022 spending could hit an all-time high as analysts believe severe inflation may count for little to nothing.
According to one preliminary estimate, Cyber Monday spending for 2022 is likely to hit an all-time high of $11.6 billion. This projection comes amid the inflation-induced strain on household budgets, as prospective buyers face tempting discounts on all items.
Adobe Analytics predicts an 8.5% increase year-over-year (YoY) for this year’s Cyber Monday, mainly due to inflation. The business analytical tool assesses e-commerce performance by analyzing purchases at 85% of the United States’ top 100 internet retailers. Furthermore, Adobe and Mastercard Spending Pulse look to release their updated Cyber Monday spending estimates later today.
Throughout much of 2022, inflation has wracked several economies across the globe and threatened to snowball into a full-blown recession. However, inflationary pressure showed some signs of abating in the US last month. October’s consumer price index (CPI) was up 7.7%, which is down from the 8.2% annual pace seen the previous month. In addition, the positive development also represented the lowest inflationary outlook since the beginning of the year. Commenting on how much of an influencing factor inflation is on Cyber Monday 2022, Telsey Advisory Group analyst Joseph Feldman said:
“If you exclude inflation, which has been running in high single digits, you come to a flattish number in real terms, which would really not be too bad.”
US Shoppers Exercise Prudence for Cyber Monday 2022
American consumers suspended holiday shopping, hoping to find better bargains on post-Thanksgiving markdowns. Conversely, retailers are also unrelenting in compelling shoppers to open up their wallets as soon as possible. For instance, since October, several merchants and e-commerce stores have offered enticing deals and discounts on everything from clothing accessories to tech devices. More recent examples also see Target.com (NYSE: TGT) advertising up to 40% discounts on Hot Wheels toys and holiday décor. In addition, e-commerce giant Amazon (NASDAQ: AMZN) also put 60% markdowns on luxury watches and accessories. However, Carol Spieckerman, president of consultancy Spieckerman Retail, believes that prospective shoppers, rattled by the effects of inflation, will hold firm in their convictions. Spieckerman said:
“Shoppers are waiting out the season in anticipation of deeper discounts and are less susceptible to shiny objects.”
Cyber Monday, the most prominent US online shopping day, also extended to numerous prominent retail chains. For example, Walmart (NYSE: WMT) and Best Buy (NYSE: BBY) slashed the prices of laptops and televisions by huge margins. These markdowns saw shoppers offered bargains up to 27% off listed prices on electronics. In addition, Adobe stated that consumers also found equally significant discounts on nearly every other category, including toys and furniture.
The peculiarity of inflationary effects means buyers will have to spend more money to procure items. The reason is that prices have risen faster than promotions in numerous categories, according to DataWeave data. Furthermore, Adobe estimates that online spending will increase by 2.8% to $34.8 billion during the five days from Thanksgiving through Cyber Monday. The reason is that this is typically one of the busiest shopping periods during the US holiday season.