Cyber Monday sales driven by 'Buy Now, Pay Later'
On Cyber Monday, consumers are expected to spend as much as $12.4B, which marks an all-time high. However, they are even more focused on spreading out their bills.
On Cyber Monday, the tail-end of the holiday shopping kick-off, consumers are projected to spend between $12 billion and $12.4 billion, notching a new all-time record for the notable shopping day, according to recent data from Adobe.
The forecast, which outpaces Adobe's earlier projections, is being driven by ‘Buy Now Pay Later’ (BNPL) options as Americans grapple with high inflation.
According to Adobe, the flexible spending option is expected to see an all-time high on Monday, accounting for $782 million in online spending. That's up 18.8% from the same period a year ago.
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BNPL services, like Afterpay or Klarna, let shoppers pay in weekly or monthly installments. They are also marketed as "interest-free loans," which is why it can be tempting for shoppers looking to stretch their budgets.
From Nov.1 through Nov 26. BNPL has driven $7.3 billion in online spending, up 14% year over year, according to Adobe. On Saturday and Sunday alone, BNPL accounted for $760 million of the over $10 billion spent, which is up 20% year over year, according to Adobe data.
This underscores how consumers are still trying to buy gifts while managing their debt obligations amid persisting inflation, high interest rates and resumed student loan repayments. For example, Americans are holding a record amount of credit card debt at $33 trillion, per the Federal Reserve.
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MORE PEOPLE ARE DELAYING PAYING UP FRONT
So far, spending during the first few days of Cyber Week – which is the five-day period from Thanksgiving to Cyber Monday – already beat projections.
Even on Thanksgiving, consumers spent $5.6 billion online, which was up 5.6% compared to the same period a year ago. A day later, on Black Friday, online spending reached $9.8 billion, up 7.5% year over year.
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Over the weekend, on Saturday and Sunday, spending reached $5 billion and $5.3 billion, respectively.
Adobe estimated that online spending during Cyber Week will reach $37.2 billion, up 5.4% year over year.
Adobe's data is not adjusted for inflation. If online inflation were factored in, there would be even higher growth in topline consumer spending, Adobe said.