Cyber Monday sales expected to slow as online retailers to lower discounts, fewer deals and Omicron fears

• Online sales on Cyber Monday is expected to be between $10.2 billion and $11.3 billion

• Omicron COVID-19 variant has triggered uncertainty over the economic recovery and is expected to affect the holiday season sales

U.S. retailers are projected to generate online sales of up to $11.3 billion on Cyber Monday, a decline in revenue growth compared to last year, as fewer discounts and limited choices due to global supply chain disruptions discourage shoppers. 

In its holiday shopping report, Adobe Analytics estimated an online sale to be between $10.2 billion and $11.3 billion in Cyber Monday, which gained popularity in the mid-2000s as a way for online retailers to cash in on the jump in consumer spending around Thanksgiving.

The sales number translates to roughly flat growth at the midpoint compared to last year’s $10.8 billion, which jumped about 15% from 2019.

Online sales

For the holiday season sales, which start from Thanksgiving day, the retailers are spreading promotional deals across more weeks this year to protect profit margins from rising supply chain costs and to manage inventories optimally amid widespread product shortages ahead of the Christmas shopping season.

However, the attempts have lowered the sales on some of the biggest shopping days of the year, as data from Adobe Analytics showed online spending during Black Friday dropped for the first time ever.

Adobe said that online spending on Black Friday took a bit of a tumble, with buyers reportedly spent a total of $8.9 billion this year, compared to $9 billion a year earlier.

Lower discounts

“We’ve seen the lowest holiday discount rates in recent history,” Rob Garf, general manager of retail at Salesforce, told Reuters and mentioned that the week leading up to Cyber Monday had an 8% lower average discount rate than the last year.

“There won’t be more presents under the tree this year. U.S. order growth across November is flat, and consumers are purchasing 1% fewer items per transaction,” Garf said.

Moreover, the new Omicron coronavirus variant has also triggered uncertainty over the economic recovery and is expected to affect the holiday season sales.

Picture Credit: NY Post