What has been historically known as one of the year’s biggest shopping ‘events’, Black Friday weekend expectations and plans were more up in the air than the previously cemented strategies of previous years.
Retailers cutting their discounting, and consumers indicating that while they would spend over the weekend, they would dial back meant marketers needed to think outside of the box to get front and centre in the crowded market. We found out what happened over the cyber weekend and how the results may impact – or implode – spending in the now official run-up to Christmas Day.
PMW spoke to marketers and collected data from platforms to get a sense of the activity and conclusions of whether Black Friday’s bubble had burst – or not.
First up, the sales numbers. Were there uplifts in certain sectors, or across certain regions?
What we saw in the Black Friday sales: the sectors
Marketing automation platform Klaviyo analysed its data from almost 41 million consumers shopping over Black Friday weekend. It found the most buoyant growth in electronics compared to the same period in 2021, with an 86% increase in total order amount and a 79% rise in average order value (AOV).
Despite being popular stomping grounds for Christmas gifts, increases in some other sectors were more muted compared to 2021 – though still existent. Clothing and accessories retailers saw a 12% increase in total order amounts, and a 14% uplift in AOV, while the toys and hobbies sector saw AOV grow by 5% across Black Friday weekend 2022. Health, beauty and wellness grew AOV by 3% and total order amounts by 2% compared to last year.
Customer experience platform Nosto noted health and beauty as the biggest sales growth showstopper in its analysis of 107 million visits across 1,269 stores globally. The sector saw a 22.6% rise in sales and AOV, up 1.2%, against a backdrop of a 13.5% growth year-on-year in traffic. Fashion saw a larger rise in AOV – of almost 10% – as did home and garden and food and beverage stores. But these two latter categories saw a dip in overall sales, of 5.9% and 2.7% respectively.
Conversion rate growth was lowest for fashion, at a dip of 11.3% while in a reversal of fortunes sporting goods were up 18.8%, alongside a 21% rise in sales.
“Predicting consumer behaviour this Black Friday/Cyber Monday was always going to be hard for retailers given current economic conditions,” says Guy Little, Nosto’s Head of Brand Marketing.
“What we see is that shoppers are still spending, with sales, traffic, and average order value all up. However, they are extremely discount-conscious, demanding major price cuts before opening their wallets.”
Nosto notes that on average, consumers bought products at a 40% discount, with 20% the minimum accepted discount level for most shoppers. And while across the globe sales were up 8.9%, and AOV rose by 6.2% compared to 2021, inflationary pressures pushed the average selling price up, dragging down unit sales year-on-year by 4.8%.
Consumer caution in the UK but US shoppers much less hesitant
Global consumer behavioural differences are highlighted by commerce media platform Criteo. Its Managing Director of Retail Media Sam Benkel points to a 7.4% uplift in online transactions in the US, according to its data from 5,400 retailers. But “consumers in the UK were expectably more hesitant given the macroeconomic situation”.
This didn’t stop some shoppers from taking advantage though, with those in the UK focusing on specific categories. Criteo found that home and garden sales were up 156% on Black Friday itself, compared to the “average”, though the uplift was just 6% on Black Friday 2021. Fashion and consumer technology sales were up 387% and 119% respectively, but both fell short of the increases seen last year.
Similar caution among UK shoppers is seen in Nosto’s data, with a stagnant AOV compared to 2021, and traffic across retailers dropping by 2.8% year-on-year. But when they came, they still spent, with sales up 10.5%. Across Europe, sales were up 5.1%, but traffic remained static. But North American shoppers were much more enthusiastic this Black Friday weekend – with traffic rising by 12.5%, sales growing by 14.7% and AOV up by more than 10%.
The rise of Black Friday personalisation
Nosto’s data also shows more than three billion personalised product recommendations were served across the weekend, so 780 million per day, and 9,000 per second.
The analysis found that while shoppers globally browsed more than ever, they're harder to convert. Across the whole weekend, traffic was up 5.4% year-on-year and engagement was up 8.4%, but conversion rate dropped by 4%.
“That’s why online retailers need to ensure that everything a shopper sees onsite is deeply personalised and that the experience they receive is truly 1:1. It’s simple: you have the best chance of converting shoppers if you’re able to understand their behaviour and affinities – and then surface the products you know they’re most likely to convert on,” Little says.
What about adspend?
Financial platform for e-commerce Juni, reveals that its data for e-commerce companies in the UK shows 63% of all spend in November 2022 went on advertising, with companies spending 58% more on ads compared to October.
Spend peaked the week before the bonanza weekend, with online retailers spending 25% more on advertising than Black Friday week itself.
Facebook was the ad platform of choice for British online retailers, netting 72% of November adspend, followed by Google (24%). But TikTok saw far less activity over November than in the summer, with just 3% of adspend recorded by Juni hitting the platform.
Desktop vs. mobile?
Nosto finds that almost two-thirds of Black Friday e-commerce sales occurred on mobile devices, with the remaining 27% on desktop. But desktop shoppers were more likely to convert, at a rate of 4.5% versus 3.6% for mobile, and they spent more, at an average of $126 ($100 on mobile).
And according to AppsFlyer, in-app purchases ramped up on the day itself, particularly compared to the seven preceding Fridays during October and November 2022.
UK e-commerce in-app purchases soared by 77% on Black Friday 2022, compared to the average across the seven previous Fridays, which, says Sue Azari, AppsFlyer’s e-Commerce Industry Lead for EMEA and LATAM should assure app marketers “that this tentpole retail event continues to be a strong opportunity for capturing consumer spend”. Across the US, in-app purchases for iOS apps were up 102% (67% for Android), in 2022.
Comparing spend year-on-year between Black Friday 2021 and 2022 saw a 2% growth in the UK, a 21% rise for US iOS apps, but an 11% decline for US Android apps. App installs on Black Friday meanwhile were 24% down in the UK, while installs for US iOS apps were down 23% and Android 14%.
“This suggests that e-commerce app marketers are prioritising quality over quantity when it comes to installs and boosting loyalty, conversions, and average spend from their existing app users, which is typically a more cost-effective approach than running user acquisition campaigns,” Azari says.
So the air hasn’t gone out of Black Friday weekend?
Benkel adds that “overall, UK online retail sales were up on the October average by 304% this year, proving Black Friday still plays an important role in the peak shopping season.”
And James Galland, Global Commerce Director, VMLY&R Commerce tells PMW: “While physical footfall has fallen, appetite for ‘Black Friday deals”’ itself remains robust in the UK with many clients seeing a rise in traffic year-on-year online even while experiencing a general reset year for e-commerce.
“What we’re seeing is that consumers are hungry for deals but have become more discerning than ever when shopping, with conversion typically dropping heavily as they have become highly informed ‘browsers’. Brands need to work harder than ever to cut through and land a value proposition.”
Galland does warn that we’re seeing “less depth and quantity with this Black Friday” with brands unable to fully swallow the impact of cost increases, “and this is being reflected in softer discount packages on the event to prevent margin gouging”.
“Brands are recognising that this year will be unique and to stand out from the crowd they’ll need to wow throughout the Christmas period rather than over a limited time event.
Has Christmas come (too) early for festive spending?
With these impressive results given the slightly deflated earlier sentiment pre-Black Friday, what can marketers expect for consumer spend as we officially enter the advent calendar countdown to Christmas?
Oscar Wall, Recurly’s General Manager EMEA, highlights the opportunities of Black Friday weekend for brands to have driven revenues with recurring payments into 2023, “especially as Q1 is expected to have a slow start”.
He adds: “On the back of [Black Friday weekend], going into the final stretch of the holiday season, there’s also an opportunity for brands to leverage monthly subscriptions to make it easier for consumers to gift goods and services without overextending their spend in December.”
Adam Rose, Director of Commercial Development at Croud, thinks the anticipation that this year’s festive shopping will have been concentrated around Black Friday weekend, instead of a closer run-up to Christmas.
“Consumers are well aware of the fact that the best deals are available [on Black Friday weekend], and so are focused on completing as much of their Christmas shopping as possible during this time.”
But he is clear that this can’t mean a slowdown for brands with retail media offering a key opportunity as we move into next year.
“The likes of Amazon remain critical to media strategy but don’t dominate the Black Friday market as they used to. And this is indicative of a wider trend that brands need to consider as we move into 2023. With consumers themselves showing willingness to work harder to find the best deals, retail media is likely an avenue which will grow exponentially in the next year.”
And Galland concludes: “Christmas has come early this year. While Black Friday may have flattered to deceive, shoppers have been price savvy this year and have been scouting their Christmas purchases since September with an unusually extended winter sales period – this may have been facilitated by Amazon’s Autumn Early Access Prime Day.
“While absolute spend per event may fall over the course of the season it is likely to remain healthy overall but with a weighting towards value and size.”
Budgets and the outlook for 2023
Those that invested adspend heavily into Black Friday would do well to calculate that return, says Samir El-Sabini, CEO and Founder of Juni. “This will help them quantify and justify their investment for the next big retail moment; Christmas. Financial planning has never been more important, and good investments and accurate forecasting now will help set the pace of growth for these businesses in 2023.”
And for smaller businesses, acquiring new customers will be harder and more costly with the tough economic climate, adds Gemma Banks, Senior Marketing Director at Klaviyo.
“Rather than cut off the cash entirely, it’s imperative that leaders look towards using budgets more effectively. Nurturing existing customer relationships, making every penny count, while being smart about how they go about acquiring a new flow of revenue will be critical to seeing through tough times. Being more personalised and agile will help to both strengthen the relationship between business and customer and ensure they deliver in-the-moment marketing to help convert interest into acquisition.”