Expectations: Consumers will be laser-focused on finding value this holiday season, which is why big promotional days like Black Friday and Cyber Monday will be so important.
36% of US consumers are preparing to shop on Black Friday, and 34% expect to make a purchase on Cyber Monday, according to YouGov. These stocks outperform other prime shopping dates like Amazon Prime Day (32%) and Labor Day (12%). We expect Cyber Five’s retail e-commerce sales to grow 5.6% year-over-year (YoY) this year. This will be the fourth consecutive year that online sales accelerate during the crucial period of the holiday season and the largest percentage increase for Cyber Five sales since 2020. Our forecast is consistent with those of Bain, which expects overall retail sales to grow from Thanksgiving to Cyber Monday. About 5%, reaching $75 billion for the first time.
Putting the Cyber Five in context: The holiday retail season is longer than ever, with holiday online shopping activity spreading across the calendar. As a result, we expect the Cyber Five to account for only 15.5% of total holiday e-commerce sales this year. This would continue the extension’s steady decline from its peak of 20.0% in 2019.
However, Cyber Monday and Black Friday will still be the biggest online shopping days of the year. We expect Cyber Monday e-commerce sales to grow 7.8% year-over-year to $13.93 billion, and Black Friday e-commerce sales will increase 5.5% to $10.76 billion.
Our view: There are increasing reasons for retailers to be optimistic about the Cyber Five and the broader holiday season.
The labor market gained strength in September. Businesses added 254,000 jobs in September, far exceeding the 150,000 expectations of economists surveyed by The Wall Street Journal and the largest monthly increase since March, according to the U.S. Labor Department. Wages rose, inflation fell. Average hourly earnings rose 4.0% year over year in September, easily outpacing the inflation rate of 2.5%. Consumers feel satisfied. US consumer sentiment rose in late September to its highest level in five months following the US Federal Reserve’s interest rate cut. The cut was a strong signal that the Fed has reached the end of its war on inflation and consumers appear to have taken notice as their views on the economy over the next year were the most optimistic since March and, more importantly, their outlook for their financial future. Private finances reached their highest level in four months.
Furthermore, the International Longshoremen’s Association agreed to suspend a strike that closed major ports on the East Coast and Gulf Coast, removing a major challenge that could have derailed the economy.
However, there is still much more uncertainty than usual this holiday season thanks to factors like the presidential election in early November and the shorter-than-usual period between Thanksgiving and Christmas. That’s why retailers are wise to start holiday promotions sooner rather than later.
Go further: Read Retail and E-Commerce Sales Benchmarks: Q4 2024 Report.
