Online holiday sales are expected to take a hit this year, after months of brick-and-mortar discounts may make customers less likely to feel the tug of limited-time holiday deals, CNBC reported.
Online sales on Black Friday and Cyber Monday are expected to grow by 1% and 5.1% respectively, according to Adobe Analytics, the slowest growth since the company began tracking online sales in 2015, CNBC reported Monday. Traditional retailers have been aggressively discounting products to clear excess inventory that was ordered following a pandemic-era surge in retail shopping, prompting consumers to potentially spread out their shopping and blunt demand for one-time discounts. (RELATED: Stores Are Pulling Out All The Stops Trying To Keep Up With Inflation)
Some retailers, such as Walmart and Target, have responded to this pressure by launching sales in October, CNBC reported. Amazon will run its two-day Prime Day sale from October 11 to 12, marking the first time the company will run two Prime Day sales in the same year, following a sale on July 12 to 13.
“Until I see some evidence that underlying inflation has solidly peaked and is hopefully headed back down, I’m not ready to declare a pause.”
Fed Bank of Minneapolis President Neel Kashkari speaks during a talk hosted by Bremer Financial Corporation https://t.co/KOG3VnBhIB pic.twitter.com/Shi5XNWC4m
— Bloomberg TV (@BloombergTV) October 6, 2022
Since in-person shopping has been hit hard by higher gas prices, customers have also shifted online spending to necessities that would ordinarily be purchased in stores, CNBC reported. Technology and toys will likely be discounted by more than 20% over the holidays, in a move designed to push consumers to purchase those items as gifts, but the steep discounts will certainly harm profits.
Some companies have quietly adjusted their discounting strategies in an attempt to entice buyers while still protecting profits, The Wall Street Journal reported, such as by adjusting a coupon that would ordinarily be 25% off to 20% off, or reducing the number of items in a bundle and increasing the price of each individual item in the bundle.
The pressure businesses and consumers face from inflation is not expected to let up soon, with inflation for September forecasted to stay near 8%, according to Forbes.
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