As COVID-19 pandemic restrictions cooled in 2022, many retailers may have hoped for a less complicated Black Friday this year.

But brewing up a new battle for both brands and consumers, inflation took the stage months before the shopping event began.

Heading into the holiday, the outlook was mixed, with some forecasts showing in-store shopping would make a return, and others suggesting inflation (which was up 7.7% in October according to the Consumer Price Index) would thwart consumer spending because shoppers expected to get less for their money. 

A Deloitte report predicted higher-income shoppers would tighten their budgets. Meanwhile, discretionary spending at some big retailers decreased throughout the year as consumers dealt with rising grocery bills.

Several retailers lowered their outlook for this quarter before the Black Friday event even started. Target tightened its Q4 outlook in November after earnings came in below expectations, and e-commerce native ThredUp did the same despite its focus being on secondhand goods — a category that could normally do well for consumers looking to save.

All of this laid the groundwork for a not-so-joyous holiday season for shoppers. That said, Adobe Analytics data shows that online spending on Black Friday this year reached $9.12 billion, up 2.3% year over year. 

The picture of how the retail industry performed is more complex than a single number. Given the macroeconomic pressures consumers face right now, it is hard to say that any winners in retail will remain so for the rest of the season. But some trends stood out.

Thanksgiving and Black Friday may have been great days to be a buy now-pay later service provider. Given the economic pressures many shoppers face right now, BNPL payment options offered a way for consumers to still get the goods they wanted.

On Thanksgiving Day, online BNPL revenue increased by 1.3% year over year and orders were up 0.7%, according to Adobe data. More telling is that some shoppers are using BNPL for lower-priced goods instead of high-priced ticket items, with the average order value for BNPL purchases decreasing in the U.S. by 6% on Thanksgiving, according to data from Salesforce. 

Orders using BNPL rose by 78% the week of Nov. 19 to Nov. 25 when compared to the week before, according to Adobe. Additionally, overall revenue from BNPL is up 81% during the same period.

“It's a positive sign in the immediate term, that consumers are looking to extend their wallet further and do more,” Rod Sides, global leader at Deloitte Insights, told Retail Dive.

But that immediate-term positive is a red flag in the long term, according to Sides, who added “we now have much higher interest rates, and they're gonna start to hit any credit card balances. With buy now, pay later, it tells you the consumer is challenged ... in the long term, it's a warning sign.”

Black Friday predictions from Deloitte projected increased use of these services, with 48% of survey respondents saying they planned to use credit cards and 37% expecting to use BNPL.

Mobile commerce was a big hit for shoppers this time around, especially on Thanksgiving when consumers may have wanted to shop more discreetly and casually during family gatherings.

On Thanksgiving, mobile shopping accounted for 55% of online retail sales, an all-time high and an increase of 8.3% year over year, per Adobe. On Black Friday, mobile hit another record, reaching 48% of all online sales compared to 44% in 2021.

“Mobile online spend was likely driven by the desire to make purchases from anywhere,” Pandya said. “It is also reflective of growing trust in smartphone transactions and improvements in mobile online experiences (compared to past years where consumers chose to shop on their computers).”

Correction: A previous version of this article misstated the total spend on Black Friday this year. Online sales on Black Friday reached $9.12 billion.

By Dani James on Nov 28, 2022
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