Black Friday US online sales boomed past expectations. 💥 While the data looks different depending on who’s reporting and which spending they’re analysing, without adjusting for inflation, this year’s Black Friday sales in the US soared past expectations: 

• Adobe Analytics (ADBE) analysed data from online spending only, looking at a total of 1 trillion visits to US websites, which included 100 million unique items. They reported that online spending jumped 7.5% compared to last year, up to US$9.8 billion. Adobe Digital Insights lead analyst Vivek Pandya suggested impulse purchases may have added to the US$5.3 billion growth in mobile sales, in part led by influencers. He noted the ‘very strategic consumer’ who is ‘really trying to take advantage of these marquee days, so that they can maximize on discounts’. 
• Salesforce (CRM) based their numbers on online transactions made by around 1.5+ billion consumers reporting that in the US, Black Friday shoppers spent US$16.4 billion, and globally, online spending rose to US$70.9 billion, with a record 79% of online purchases made on mobile handsets.
• Mastercard Spendingpulse (MA) analysed data from this year’s US Black Friday sales saying spending was up 2.5% across the board since last year. They found that e-commerce was up 8.5%, while in-person shop sales grew by 1.1%.

Shopify breaks Black Friday record 💽 

Canadian e-commerce giant Shopify (SHOP) broke through a combined US$4.1 billion in sales, which saw their stock leap nearly 3.4% in after hours trading and staying there. Shopify, which measures both online and bricks and mortar shop sales, saw a 33% year-over-year increase in global sales, summarising in a press release: 

‘From the crack of dawn in New Zealand through the final minutes in California, our merchants drove a 22% increase in sales over last year. Shopping peaked when collective sales reached US$4.2 million per minute at 12:01 p.m. EST on Friday.’

Perhaps giving weight to the commentary that impulse buying was a driver, Shopify’s most popular items to buy were clothing, footwear and sports gear, beauty and skincare, and jewellery. In contrast, Adobe’s data revealed the hottest ticket purchases were for electronics, including smartwatches, audio gear and TVs, along with Barbie Fashionista dolls and KidKraft play sets, ever-popular gaming consoles, PlayStation 5 and Xbox Series X, along with videos Call of Duty: Modern Warfare III and Super Mario Bros Wonder.

Retail ETFs lifted in Black Friday trading. Just. 🤏 Retail exchange traded funds out-performed other benchmark ETFs, such as the S&P 500 index, if only by a margin in the shortened Nasdaq and NYSE trading hours of 9.30am-1pm.

• Amplify Online Retail ETF (IBUY) rose 0.4% on Black Friday. It has a net asset value (NAV) of US$155.73 million, with year-to-date (YTD) stock up 15.6% and 7.6% in one year.
• SPDR S&P Retail ETF (XRT) climbed 0.7% in the 5-day week leading up to Black Friday and continued its small lift in after hours trading on Friday. The ETF holds NAV of US$328.61 million, and the ETF stock is up 1.2% YTD and down 5.2% over one year.

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Why Black Friday matters to the economy

Black Friday can be big business for retailers. 🛍️ The Friday following Thanksgiving, named Black Friday - allegedly by the Philadelphia Police in 1950 naming the day football fans descended into the city centre - historically has kicked off ‘America’s biggest annual shopping spree’, according to the Financial Times. And this year’s Black Friday was anticipated to be ‘the busiest US holiday shopping day’ by Sensormatic Solutions, a subsidiary of listed company Johnson Controls (JCI). 

‘Retailers have been preparing for months for this occasion’, said US National Retail Federation (NRF) President and CEO Matthew Shay, adding, ‘They are stocked and ready to help customers find the gifts and other items they want at great prices during the entire holiday season’. 

Based on their Annual November Holiday Consumer Survey, the NRF projected a 9.6% increase of US consumers shopping Black Friday deals - up from 166 million people to an estimated 182 million people. And based on their data, the NRF forecast that US shoppers would spend a total of between US$957.3 billion-US$966.6 billion, a 3-4% jump from last year’s US$929.5 billion total spend. 

Deloitte expected US consumers to spend around US$567 each, up 13% from 2022. And in PwC’s Holiday Outlook 2023 report, they expected the trend of increasing year-on-year holiday spending to continue (with the exception of 2020 when Covid impacted consumer spending). In a survey, they found that 1 of every 5 Amercians planned to do ‘most of their shopping’ in Black Friday deals. PwC noted that from their data, they anticipated Gen Z spending to grow 15% this year as the cohort ‘flexes their spending muscle’, that’s people aged between 11 and 26 years old, which Black Friday spending data seems to support. 

Land of the Long White… bumper-to-bumper queues?

Kiwis’ seasonal shopping car park chaos. 🚗🚙🛻  Black Friday entered the Kiwi lexicon around 5-ish years ago and now surpasses Boxing Day sales as our biggest shopping day. This year, even AA Insurance jumped on the bandwagon warning ‘frantic and frazzled’ motorists to play nice in Black Friday-logged car parks. And while traffic slowed around malls in Auckland, Hamilton and Wellington, Christchurch was cruising like a normal weekend.

But not all browsers were buying. 🛒 Retail NZ CEO Carolyn Young said that Black Friday has become ‘increasingly important’ for local retailers, but suggested interest rate pressures have hurt Kiwis’ discretionary spending capabilities, adding that ‘it’s really starting to feel the pinch into consumers' wallets’. New Zealand retailers reported anecdotally they thought Kiwi shoppers spent around 10% less this year - against PriceSpy projections we’d spend 10% more - with collected data showing we spent 3.9% less this year than last year.

But a few Black Friday winners emerged in New Zealand: online shopping mecca Mighty Ape, and fashion retailer Ruby. 

• Mighty Ape CEO Gracie MacKinlay told The New Zealand Herald that the site's Friday sales were up 20% on the previous day, adding that the average customer basket size included 2.3 items, which is 5% higher than in 2022, with customers buying an item every 3.5 seconds on average. 
• Ruby general manager Emily Miller-Sharma told the Herald that they saw sales jump 10% on last year, with their recycle-resale scheme ‘Take B_ack Friday’ bringing Ruby shoppers into their Newmarket flagship store to drop 2,600 clothing items for resale and buy old or new items for a discounted price.

US debt hits record highs 💸

Buy now pay later up 47% since 2022’s Black Friday. Adobe’s data showed that US$79 million of the sales were made by consumers using buy now, pay later (BNPL), spreading their repayments across six weeks of instalments to combat inflation woes, which while cooling to 3.2% in the US, has still hurt US discretionary spending over the year. 

Perhaps not great news for rising US debt. 💰 American household debt crept up 1.3% in the third quarter of this year, topping US$17.29 trillion, which accounts for 64.1% of US nominal GDP. This compares to New Zealand’s household debt in July 2023 of US$226.8 billion, which accounts for 91.9% of our nominal GDP. 

US debt is broken down as:

• Mortgages: US$12.14 trillion
• Credit cards: US$1.08 trillion
• Car loans: US$1.6 trillion
• Student loans: US$1.6 trillion

And while Affirm says they’ve decreased risk from defaulting debtors, overall BNPL use in the US shows ‘worrying signs’ about Americans’ financial health.

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Like this? 👍 Then you might like: BNPL provider Affirm shares surged 24% ahead of Black Friday splurge 📈

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