Black Friday Sets New Digital Record

Once again, the American consumer refuses to be defeated

BREAKING NEWS

After fears that consumer spending was about to run out of gas, preliminary reports from Adobe Analytics and Salesforce have shown that—on the digital side of sales—this was the biggest Black Friday yet. Let’s break it down: 

WHAT HAPPENED

Adobe Analytics reported that digital shoppers spent over $9.8 billion on Black Friday sales online. This is a decent 7.5% boost from last year’s Black Friday revenue. Critically, this isn’t a total for the whole economy, just for websites with Adobe’s tracking tools plugged in.

Salesforce also tracks immediate revenue data like this, and their system logged $16.4 billion in sales on Friday, which is a 9% boost from last year’s data. So, on the surface, it looks like shoppers are doing just fine this year.

SOME BIG CAVEATS

However, data like this comes with a lot of baggage. First up, as Adobe and Salesforce are constantly working to add new clients to their systems, it stands to reason that these revenue figures are going up simply because these companies are just tracking more websites. We’re only pointing this out because these revenue numbers come along with anecdotal reports that large, physical retailers are experiencing a lot less foot traffic on Black Friday than they have in previous years. Until we get more industry-wide figures, we should take these numbers with a grain of salt. At the same time, Adobe and Salesforce have been putting out these dashboards for years and they’ve largely grown at a similar rate to industry-wide retail sales, so these caveats may be pointless. For now, the numbers look strong, so The Street feels better about consumer spending.

WHY IT MATTERS

This is a really important moment for our recovery. As Americans continue to get crushed by inflation while high interest rates slow the whole game down, a sharper decline in consumer spending would really be able to crush our recovery right as it starts to gain momentum. Spending is 70% of GDP and a sudden enough slowdown can be enough to completely reverse the trend of  GDP growth we’ve seen in the last few quarters and push us into a recession. For now, the data we have is pointing toward an American consumer that is standing tall despite all the pressure, which is keeping the bull narrative in control for now.