Economy, Sci & Tech
0

Online Spending Sees Surge in US, Reaches $1b

Online Spending Sees Surge in US, Reaches $1bOnline Spending Sees Surge in US, Reaches $1b

Online spending by US bargain hunters climbed to above $1 billion by Thanksgiving evening, according to Adobe Digital Index, surging almost 14% from a year ago and reflecting a broader trend away from brick-and-mortar shopping.

At the start of the first holiday shopping season since the election of Donald Trump as president on November 8, US consumers loosened their purse strings and spent $1.15 billion online between midnight and 5 pm Eastern time on November 24, according to Adobe.

Reuters writes that traditionally the day after Thanksgiving, or Black Friday, has started the holiday shopping season in the United States with retailers offering steep discounts and turning a profit. But its popularity has been on the wane given the emergence of online shopping and cheap deals through the year from retailers including e-commerce giant Amazon.com.

US stores are now opening on Thanksgiving to try and boost in-store sales, while retailers have been offering online deals weeks in advance to cope with lower demand and stiff pricing competition.

“We saw one of our strongest days ever online,” Brian Cornell, chief executive of discount retailer Target, told reporters on Thursday evening. He added that online sales grew by double digits, without giving further details.

The holiday season spanning November and December is crucial for retailers because it can account for as much as 40% of annual sales. Retailers try to attract shoppers with deep discounts, sometimes as much as 85%.

The US’ National Retail Federation, which has been bullish with projections in the past, expects holiday sales to grow 3.6% this year to $655.8 billion.

“Online discounts are earlier and a lot bigger than last year,” said Tamara Gaffney, principal research analyst at Adobe Digital Index.

The Adobe figure is collected from 21 billion online visits to 4,500 US retail sites since November 1.

Store traffic remained subdued across the country, according to spot checks made by Reuters reporters and industry officials.

“Initial reports show it’s steady and not very busy at stores around the country,” said Craig Johnson, president at retail consultancy Customer Growth Partners. The firm deployed 18 people nationwide to observe customer traffic.

At a JC Penney store in Manhattan, Terry Bodiford, visiting from South Carolina, said he did not feel deals were better than he had found online over the past few weeks.

Locally, Bamilo.com, a e-commerce retailer backed by Iran Internet Group, itself backed by Rocket Internet and MTN Group, has also been offering Black Friday deals this week for a second consecutive year.

Reports from internet users in the country state that demand on Thursday evening grew so much that the website crashed from demand.

 

Add new comment

Read our comment policy before posting your viewpoints

Financialtribune.com