New estimates from Adobe Analytics show that, in 2022, online shopping for Thanksgiving in the US may decline from that last year. Several e-commerce platforms now host sales throughout the year, which has made traditional holiday sales redundant. Furthermore, data show that customer spending amounted to 509 billion dollars this year, which is six percent less than that in the previous year. This tells us, consumers are probably spending less this year, which could affect online sales during Thanksgiving as well. Let's take a look at some of the key contributors to this decline.
This year, online sales during Thanksgiving are touted to decline for the first time since 2015. Here are some figures that point to this shift.
Several retailers have been planning to open their shops way before Thanksgiving to attract shoppers and increase traffic. Online advertisements posted by brick-and-mortar establishments to increase their sales are difficult to miss. Teasers for Black Friday discounts are everywhere, and shoppers can't help but give in to the attractive offline deals. The sudden inclination toward in-store shopping could affect online sales, and brands that primarily sell online may have to prepare for underwhelming responses this year during the holiday season.
Nowadays, e-commerce giants seldom offer steep discounts during traditional holiday seasons; instead, they host year-round sales on their platforms. The key reasons for this change are:
Pandya says that, earlier, consumers expected deals to be offered from Thanksgiving and continue till Cyber Monday. In a study, Adobe showed that shoppers expect discounts of up to or more than thirty-two percent in stores during Cyber Week. The discounts could be as high as twenty-seven percent on electronics, twenty-two percent on toys, and nineteen percent on televisions and apparel. These are the minimum discounts online stores should offer during a Thanksgiving sale to draw traffic.
According to a report by Kelly Tyko from Axios, retail stores are most likely to remain somewhat obsolete during Thanksgiving for the third year in a row, which could explain why brands like Best Buy and Target are now adopting a different strategy.
This trend will cause a potential shift from online to in-store shopping and thus reduce traffic for online businesses.
Amazon’s Prime day, which takes place twice a year, has been a key contributor in diverting customers toward online sales, away from in-store shopping. Data from Adobe show that the first Prime Day this year generated a whopping 11.9 billion dollars in retail in just two days. There could be a pre-shopping boost on the second Prime Day, too, which could be bad news for brands and potentially affect their in-store sales during Thanksgiving. This explains why brands like Target and Best Buy are choosing to host their sale day way ahead of the traditional Thanksgiving sale and attract decent traffic to their stores.
Thanksgiving this year could look dismal for online platforms. The change is mostly driven by global inflation and the declining purchasing power of consumers. Furthermore, to compete with e-commerce giants that offer deals throughout the year, offline stores are now hosting sales way before Thanksgiving, which could make most Thanksgiving sales redundant. In this scenario, steep discounts are the only hope for brands planning to go live with their Thanksgiving sales online.