Inflation led shoppers to use BNPL for lower-priced items

Online retail sales on Thanksgiving in the United States increased $7.5 billion versus a year earlier — a 9% jump — according to preliminary data from Salesforce Inc. Heavy discounting helped drive the rise in sales amid shoppers’ concerns about inflation.

Traffic to ecommerce sites increased 5% year over. Online discount rates hit 31%, a 7% jump year over year.

The verticals with the highest discount rates, according to Salesforce:

  • Home Appliances: 41%
  • General Apparel: 34%
  • Makeup: 32%
  • Luxury Handbags: 30%

In a sign that shoppers are feeling inflation’s, the average order value for buy now, pay later (BNPL) transactions decreased in the U.S. on Thanksgiving. AOV decreased 6% as shoppers financed more lower-priced goods than previous year.

“After lackluster deals earlier in the season, retailers have now stepped up their discount game to pre-pandemic levels,” Rob Garf, vice president and general manager of retail at Salesforce, said in a written statement. “Consumers responded by browsing and buying online this Thanksgiving, with buy-now-pay-later options winning over many consumers on the fence, even on lower-priced goods as the pressure of inflation persists.”


Inflation’s impact on Thanksgiving sales

Data from software provider Shopify Inc., which powers ecommerce platforms for small businesses, show that the average spend per cart on Thanksgiving Day was 3.8% higher than last year. That might not point to higher sales volumes, but instead increases in prices due to higher inflation.

The Shopify data also showed an increase in the number of sales made on cell phones rather than on desktops, suggesting more consumers sought deals while away from their desks. The apparel and accessories category was the top seller in the U.S. yesterday, followed by health and beauty, Shopify found.

Online sales climbed 2.9% to $5.29 billion on Thanksgiving Day, Adobe Analytics said Friday. That’s slightly ahead of Adobe’s estimate for the overall holiday season, which the company sees expanding 2.5% from last year. On Black Friday itself, Adobe predicts only a 1% increase in online sales, to $9 billion.

Taking a step back, these numbers — which aren’t adjusted for inflation — show the challenge facing retailers. The U.S. consumer price index climbed 7.7% during the 12 months ending in October. So, with ecommerce rising in the low single digits, unit sales are probably down.


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