online sales thanksgiving

The slowdown in consumer spending has been palpable this year. However, early trends from Thanksgiving sales suggest that online sales are set to hit a record high this year.

According to Adobe, online sales on Black Friday are expected to have topped $9 billion this year, a new record high. It also said US consumers spent $5.29 billion online on Thanksgiving Day. Sales rose 2.9% YoY and hit a new record high.

Smartphone sales accounted for 55% of total online sales on Thanksgiving Day. The metric looks encouraging as sales of both PCs and smartphones have plummeted this year.

Adobe also said that the average order volume is up 12% this year. It estimates that over Cyber Week, US consumers would spend $34.8 billion online, up 3% from the previous year.

Early results from the Cyber Week sales look encouraging as several retail companies have pointed to sluggish holiday shopping this year.

Walmart forecasted sales growth of 3% in the fiscal fourth quarter in the US, which is below the 3.5% growth that analysts were expecting. While Walmart said that holidays are “off to a pretty solid start,” it added, “consumers are using discretion in terms of what they’re buying.”

Notably, Amazon also expects sales to rise between 2-8% YoY in the December quarter, which was lower than what analysts were expecting.

Amazon Stock Has Fallen amid Sluggish Sales

Amazon missed revenue estimates in the third quarter amid sluggish online sales. The stock slumped after its Q3 2022 earnings release. Several analysts lowered their target price on the stock but overall, Wall Street is overwhelmingly bullish on the stock. We have a guide on how beginners can buy Amazon stock.

Brian Olsavsky, Amazon’s CFO said during the earnings call, “As the third quarter progressed, we saw moderating sales growth across many of our businesses, as well as increased foreign-currency headwinds … and we expect these impacts to persist throughout the fourth quarter.”

He was also circumspect about the outlook for holiday sales. “We’re realistic that there’s various factors weighing on people’s wallets, and we’re not quite sure how strong holiday spending will be versus last year. And we’re ready for a variety of outcomes,” said Olsavsky during the earnings call last month.

Amazon has announced mass layoffs amid sagging growth. Jeff Bezos has also warned of a recession. While recessions are invariably bad for stocks, there are some investments that are recession-proof.

Walmart Leads in Online Searches This Year

Meanwhile, while last year Amazon was the leader in online searches for Black Friday, Captify, an advertising technology company, estimates that Walmart topped the list this year. Amid the slowdown, Amazon stock has lost half of its market cap from its all-time highs.

Coming back to online shopping this year, The National Retail Federation (NRF) expects 166.3 million people to shop during the extended weekend.

NRF President and CEO Matthew Shay said, “While there is much speculation about inflation’s impact on consumer behavior, our data tells us that this Thanksgiving holiday weekend will see robust store traffic with a record number of shoppers taking advantage of value pricing.”

He added, “We are optimistic that retail sales will remain strong in the weeks ahead, and retailers are ready to meet consumers however they want to shop with great products at prices they want to pay.”

Overall, strong sales, both online as well as offline during Thanksgiving Week is a welcome sign amid concerns over consumer spending in the US.

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