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US Online Spending Jumps $24.1 Billion During “Black Friday in Summer,” Adobe Reports

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U.S. online retail spending surged by $24.1 billion from July 8 to 11, a period dubbed “Black Friday in Summer,” exceeding Adobe Analytics’ forecast as shoppers eagerly took advantage of steep discounts on back-to-school items. Retailers saw a 30.3% increase in online sales during events including Amazon Prime Day, surpassing Adobe’s earlier projection of 28.4%.

Online retail sales a year ago during this period were $14.2 billion, marking an 11% rise this time. Prime Day has solidified its role as a key back-to-school shopping moment, with consumers grabbing early deals to prepare for the upcoming school season, Adobe noted.

Major retailers such as Amazon, Walmart, Target, and Best Buy launched extensive deal events offering significant discounts, encouraging shoppers to purchase higher-priced items they might normally avoid. Amazon extended its sales window to 96 hours, doubling the usual 48-hour timeframe, and ran aggressive promotions across categories like apparel and electronics.

This surge in deals comes amid ongoing trade tensions and tariff uncertainties under the Trump administration, as well as a looming August 1 deadline for renegotiations of trade agreements with the U.S.

Mobile shopping dominated the Prime Day event, accounting for 53.2% of online sales—above Adobe’s forecast of 52.5%. Discounts ranged from 11% to 24%, slightly wider than the previously forecast 10% to 24%. Apparel saw the largest discounts at 24%, up from 20% last year, while electronics held steady at a 23% discount, similar to the prior year.

Amazon Prime Day to Boost U.S. Online Sales to $23.8 Billion, Adobe Forecasts

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Online sales in the U.S. are projected to reach $23.8 billion during Amazon’s extended 96-hour Prime Day event from July 8 to 11, marking a 28.4% increase compared to last year, according to Adobe Analytics. This surge reflects consumers’ eagerness for strong discounts, especially on back-to-school items like apparel and electronics.

Adobe highlighted that this sales volume is equivalent to “two Black Fridays,” noting that shoppers are increasingly using generative AI tools to hunt for deals and get an early start on their back-to-school shopping. The expansion of Prime Day from 48 to 96 hours also responds to growing competition from retailers like Walmart and Target, who are launching their own promotions during the same period.

Consumers are expected to “trade up” by purchasing higher-priced items such as electronics, sporting goods, and appliances, while choosing more budget-friendly options in categories like home, garden, and groceries. Clothing discounts are forecast to deepen to 24%, up from 20% last year, while electronics discounts may slightly decrease to 22%.

Back-to-school essentials, including backpacks, lunchboxes, headphones, and computers, are also expected to see sales growth. Additionally, the use of Buy Now Pay Later (BNPL) payment options is anticipated to rise slightly to 8% of online spending, up from 7.6% last year.

Adobe’s forecast is based on analysis of 1 trillion visits to U.S. ecommerce sites, covering 100 million SKUs across 18 product categories.

Mixed Forecasts Cloud Holiday Shopping Season Ahead of Black Friday

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Holiday Spending Trends: Optimism vs. Caution

The 2023 holiday shopping season is shaping up to be a mixed bag, with consumers keeping budgets tight and focusing on price comparisons for essentials like apparel, electronics, and toys. Walmart and Target, key retail bellwethers, have presented contrasting outlooks as they gear up for the year’s busiest retail period.

Walmart raised its annual sales and profit expectations, attributing its success to aggressive pricing strategies and an expanded customer base that includes higher-income households. Meanwhile, Target issued subdued forecasts, citing weak demand for high-margin categories such as electronics and home goods.

Despite the first Federal Reserve rate cut in four years, consumer spending on non-essentials remains lackluster. Analysts predict another deal-heavy season, with overall holiday shopping growth expected to slow to its weakest pace in six years, according to reports from the National Retail Federation (NRF) and Deloitte.

Challenges in a Shorter Shopping Window

With only 26 days between Black Friday and Christmas—compared to 31 days in 2022—retailers have pushed early promotions, beginning as far back as July. Record numbers of shoppers, an estimated 183.4 million, plan to shop in-store and online from Thanksgiving through Cyber Monday, up slightly from last year.

However, Walmart CEO Doug McMillon tempered expectations, noting that momentum may mirror trends from earlier in the year. “The calendar isn’t ideal, and it’s a unique environment. But I expect stable trends to continue,” McMillon said on a recent earnings call.

Mobile Shopping and Loyalty Programs on the Rise

Mobile shopping continues to dominate, accounting for an estimated 53% of online spending during November and December. Adobe Analytics predicts mobile sales will grow by 12% this year, contributing to an 8.4% rise in overall online spending.

Gen Z consumers, who heavily influence shopping trends, are driving this shift to mobile purchases. Retailers like Target and Walmart have leaned into loyalty programs, offering perks like same-day delivery, personalized promotions, and streamlined in-store checkouts.

Walmart’s Walmart Plus membership program, discounted by 50% through early December, has seen double-digit growth in global membership income. Target’s revamped loyalty initiatives have fueled a 20% rise in same-day delivery orders, helping to offset weaker overall performance.

Targeting Specific Shopper Demographics

Retailers are increasingly tailoring promotions to attract new customers. Target’s exclusive holiday deals on Taylor Swift merchandise aim to tap into the artist’s massive fanbase, while budget-conscious shoppers gravitate toward discounters like TJX Cos., which recently raised its annual profit forecast.

M Science analyst John Tomlinson highlighted the fierce competition for incremental customers this season. “Retailers will intensify targeted promotions to gain new shoppers at an accelerated rate,” he noted.

Outlook for the 2023 Shopping Season

Retailers face a challenging season with cautious consumer spending, a shorter holiday window, and economic uncertainty. Yet, early promotions, loyalty incentives, and the growing influence of mobile shopping and social media may drive last-minute sales.

The battle for customer loyalty and efficient delivery will likely define the success of major players, setting the tone for retail in 2024.