U.S. shoppers are set to spend a record $27.49 billion online this year during the five-day stretch from Thanksgiving to Cyber Monday, Digital Commerce 360 (formerly Internet Retailer) projects. This is up from $23.63 billion in 2018 and would be a 16.3% year-over-year jump in ecommerce sales for the biggest U.S. retail weekend of the year.
Total retail sales will increase 4.0% during the same period—coined Cyber 5—and reach $136.93 billion, Digital Commerce 360 estimates. This excludes revenue from restaurants, bars, automobile dealers, gas stations and fuel dealers. If these total retail figures hold true, that means ecommerce will account for 20.1% of all retail spend.
Cyber Monday continues to beat out other Thanksgiving weekend sales days
When it comes to the daily revenue split for the long holiday weekend, Cyber Monday will once again eclipse Black Friday in sales as it has been growing in importance. Digital Commerce 360 estimates Cyber Monday will reach $8.77 billion in online sales, up 18.1% year over year from $7.43 billion. But Black Friday’s online sales will grow 19.0%, swelling from $6.05 billion in 2018 to $7.20 billion this year.
In a Digital Commerce 360/Bizrate Insights survey of 1,266 consumers in October, six in 10 respondents said they plan to shop online during Cyber Monday. That’s a bit higher than the 56% share of consumers who reported they’ll be taking advantage of Black Friday promotions and more than double the 27% who plan to shop on the day before Thanksgiving or 21% on the holiday itself.
According to a Deloitte LLP survey of 4,410 consumers in September, 53% of respondents reported they plan to rely on Cyber Monday shopping discounts at least as much as they have in the past, but less than half—44%—said the same about Black Friday.
As the driving force behind converting a sale, promotions are an important consideration here as shoppers decide to buy on certain days, according to the Digital Commerce 360/Bizrate Insights poll. When asked what would entice them to shop earlier than usual, consumers largely honed in on price: 64% of respondents chose a “big discount on a product I couldn’t resist,” which was the top reason cited. In the same survey, 76% of respondents reported competitive prices as one of the most important factors in choosing a retailer during the holidays.
According to Salesforce, Cyber Monday remains the best day for deals, with a 29% average discount rate, so the day’s pull on shoppers makes sense.
Digital Commerce 360 analyzed SimilarWeb traffic data from the Cyber 5 weekend last year, studying website visits for the top 25 retailers ranked in the Top 1000 (excluding some like W.W. Grainger Inc. that aren’t holiday heavy). Saturday and Sunday took the lowest share of the five-day total traffic as Thanksgiving gained traction with retailers offering sneak peek Black Friday sales earlier and earlier. Traffic patterns bolster Digital Commerce 360’s expectations that online sales for Thanksgiving will continue to edge out Saturday or Sunday and increase gains this year.
Shoppers continue to shift dollars online
A number of factors went into Digital Commerce 360’s projections, including a study of historical retail data released by the U.S. Department of Commerce, consumer confidence measures, consumer surveys and trends in traffic to retail sites.
Ecommerce sales spiked 17.3% in Q3 over the same period last year, marking the highest quarterly growth rate in nearly eight years, according to an analysis of Commerce Department data. While this suggests consumers are primed to spend at higher levels heading into Cyber 5 weekend, year-to-date growth for online sales was a more conservative 14.2%, which is the lowest growth for the first nine months of the year since 2013. Additionally, the fourth quarter historically sees a drop off in year-over-year growth from the prior quarter, with decreased from Q3 to Q4 in four of the last five years. These data points contribute to Digital Commerce 360’s estimate for a 16.3% lift in web sales during Cyber 5—a more temperate outlook than Q3 growth alone would indicate.
Digital Commerce 360’s sales and growth projections fall in line with figures released by some firms with visibility into consumer purchases. According to Adobe Analytics, shoppers will spend roughly $29 billion online for the five-day period, up about 18.8% from 2018. Salesforce.com Inc. says Cyber 5 ecommerce sales will hit $27.8 billion, up 14.0% year over year. Adobe’s data is based on data from more than 1 trillion visits to more than 4,500 retail sites including transactions from 80 of the top 100 U.S. online retailers as ranked by the 2019 Internet Retailer Top 1000. Salesforce’s data is aggregated from the activity of more than half a billion holiday shoppers flowing through its Commerce Cloud platform.
Plus, shoppers’ comfort with online shopping has steadily grown: 54% of respondents prefer to shop online versus in stores during the holidays, up from 52% last year, according to Deloitte’s consumer survey. And overall, respondents reported planning to spend more, or 59%, of their holiday budget on ecommerce purchases, up from 57% in 2018. Stores will account for the same share—36%—of shoppers’ seasonal spend as last year, with catalogs and other retail channels taking the remaining piece of the pie.
The Digital Commerce 360/Bizrate Insights consumer survey yielded similar results. 62.0% of respondents said they plan to buy at least half of their holiday presents online, up from 60.0% in 2018.
These trends support Digital Commerce 360’s expectation that shoppers will continue to shift more of their retail dollars to the web—a drift that’s even more pronounced during the holidays. More than 16% of all retail sales happened online last year in Q4, Commerce Department data shows. An analysis of the last five years of fourth quarter year-over-year and quarter-over-quarter growth in ecommerce penetration suggests Q4 2019 will approach 18%.
Digital Commerce 360 predicts online’s share of total retail will climb even higher as the November-December period ramps up with retailers heavily marketing sales, hitting 19.2% for the two-month time frame. The season will peak during Cyber 5, with ecommerce penetration surpassing 20% as shoppers increasingly avoid crowded stores and opt to browse deals from the comfort of their homes. The National Retail Federation projects similar numbers, estimating north of 22% of all holiday sales will occur online this year.
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