Consumers Take Advantage of Deals, BNPL as Holiday Shopping Kicks Off

Despite economic uncertainty, consumers have been spending in the week after Thanksgiving to complete a portion of their holiday shopping and take advantage of the best deals.

This year’s Black Friday online sales in the United States approached a record of almost $10 billion, representing a 7.5% increase over last year. Cyber Monday spending was projected to reach $12 billion, 9.7% more than in 2022. The period between Thanksgiving Day and Cyber Monday recorded the most people ever participating in the seasonal campaign — 200 million shoppers — exceeding last year’s record of 197 million.

American consumers have seen their savings reduced by 7% since 2021, per PYMNTS Intelligence. Combine that with cumulative inflation, and the shopping situation becomes clear. Consumers had to take advantage of deals as much as possible, and to buy on credit.

Merchants and brands were particularly aggressive in their promotions and in offering payment alternatives. The use of buy now, pay later (BNPL) rose by 72% from the week before Thanksgiving. Consumers purchasing retail products during Black Friday via BNPL spent 32% more than those who didn’t, PYMNTS Intelligence found.

In tight economic times, the ease of payments counts. Twenty-two percent of consumers said they would be willing to switch merchants if they did not offer an installment payment option for their retail purchases.

Amazon, Walmart and T.J. Maxx saw their sales grow during the start of the holiday shopping season. But many retailers had the opposite experience. The median drop in Black Friday sales was 4% for a sample of 40 top U.S. retailers that take in a larger percentage of year-to-date sales during the holiday when compared to their peers.

In times of lost purchasing power, inflationary stress, and high promotional intensity, merchants surf the wave at different paces and customers maximize their budgets when they shop. Retailers that know how to capture consumer attention and offer competitive discounts and payments options can take sales share from the competition.

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.