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Fewer products, Fewer discounts on cyber Monday
Pandemic slows down Cyber Monday sales
Technology, marketing and online sales specialists do not expect sales to exceed those of previous years
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Brenda A. Vázquez Colón bvazquez@elvocero.com
After large chain stores and island retailers spent months offering online deals, and Puerto Ricans made all kinds of purchases online since the beginning of the COVID-19 pandemic, promotions and offers during Cyber Monday were not as good as in the past. are on Cyber Monday. Although they understand that sales at the beginning of the Christmas season continue to Fewer Discounts be important in the United States and Puerto According to Wilton “el Tecnético” Vargas, Rico, technology, marketing and online sales advertised offers for digital purchases have not connoisseurs do not expect them to exceed those been striking enough and have been diluted with of previous years. other specials that have been promoted during the This year’s Cyber Monday sale –the Monday past weeks. Given the drop in sales in the United immediately following Black Friday– had fewer States, the possibility of creating Cyber Month is products and discounts, compared to other years, already being mentioned. which they assure was a consequence of the “On this Cyber Monday there were fewer offers, COVID-19 pandemic, which continues to cause a fewer products and less attractive prices, although shortage of products at a global level. consumers always adjust to what is available. As indicated, the new pandemic reality has The deals started early, global challenges, such as changed the sales pattern for this day and, inflation and little variety of products, continue… although there is still demand for products there is little inventory available,” mentioned Vargas. through online platforms, Cyber Monday 2021 Online sales had become the option of those did not generate the interest who want to avoid the long lines of other years, nor did it offer in stores on Black Friday. substantial savings. Pedreira estimates the Juan Carlos Pedreira, digital discounts announced on Cyber marketing and social media Monday were between 5% and strategist, indicated they 25%, while in previous years expect “Cyber Monday sales they had exceeded 30%. in the United States to be In addition to the impact similar to last year, with about COVID-19 has had on $10.9 billion. In Puerto Rico, manufactured products, there 1.3 million people buy online, are other situations that were especially electronic items already present before the and tickets. The most sought pandemic and that worsened after product this season when the disease appeared and is the PlayStation 5. Many caused the death of millions of consumers expect the discounts to be announced people around the world. closer to Christmas.” “Taiwan’s Semiconductor Manufacturing Pedreira said there is no data for Puerto Rico on Company (TSMC), the largest technology producer, Cyber Monday sales. caught fire just before the pandemic and However, Travel + Leisure company, which reconstruction was delayed due to the arrival of offers travel advice, indicates that the best deals the virus. The largest chip factory in the world has on plane tickets, car rentals and accommodations not been able to supply them, they cannot cope with demand,” Vargas explained. He added that despite the difficult outlook in the manufacturing and distribution of many products –especially electronic ones– large companies was expected to capture a high percentage of purchases on Cyber Monday, as it has happened before. “In 2020, 43% of Cyber Monday sales were from Amazon, followed by Best Buy with 11% and Walmart with 9%. Rush hour is at night,” Pedreira said. According to Google data, Puerto Rico is a particular case because unlike the rest of the countries in the region, Cyber Monday is more popular than Black Friday, followed by the Dominican Republic and Panama. Regarding Cyber Monday, during the months of November and December, Puerto Ricans perform 40% to 70% more searches related to “shopping” than the average for the other months of the year, which represents a business opportunity.
In fact, Meanwhile, interest for Black Friday begins three to four weeks before the date.
Worldwide Projections
$243 Average budget for online purchases. Simon-Kucher & Partners and Dynata, two consulting firms specialized in strategy, marketing, prices and sales, carried out a global study on purchasing behavior, and the average budget for ‘online’ purchases was $243. Source: Simon-Kucher & In the surveyed countries –such as Belgium,
Partners and Dynata Brazil, China, Denmark, Germany, Colombia, Mexico, the United Kingdom and the United States– the willingness to buy on Cyber Monday was above 50%, leading China with 95%, Turkey with 88% and Brazil with 83%. According to a study by the Organization of Consumers and Users (OCU), which monitored the evolution of 1,260 products offered in 41 stores, product prices dropped 19%, but 28% of the products advertised on the internet increased their prices by an average of 2.6%.
In Puerto Rico, 1.3 million people buy online, especially electronic items and tickets. The most sought after product this season is the PlayStation 5.
– Juan Carlos Pedreira, digital marketing and social media strategist
US GDP slowed sharply in Q3 but big rebound expected in Q4
By Martin Crutsinger, The Associated Press Economics
WASHINGTON — The U.S. economy slowed to a modest annual rate of 2.1% in the JulySeptember quarter according to the government’s second read of the data, slightly better than its first estimate. But economists are predicting a solid rebound in the current quarter, as long as rising inflation and a recent uptick in COVID cases do not derail activity.
The increase in the gross domestic product, the economy’s total output of goods and services, is up from an initial estimate of 2% for the third quarter, the Commerce Department reported. But the revision was still well below the solid gains of 6.3% in the first quarter this year and 6.7% in the second.
The small increase from the initial GDP estimate a month ago reflected a slightly better performance for consumer spending, which grew at a still lackluster 1.7% rate in the third quarter, compared to a 12% surge in the April-June quarter. The contribution to GDP from business inventory restocking was also revised up.
COVID And Inflation Dampen Gains
The economy’s weak summer performance reflected a big slowdown in consumer spending as a spike in COVID-19 cases from the delta variant caused consumers to grow more cautious and snarled supply chains made items such as new cars hard to get and also contributed to a burst of inflation to levels not seen in three decades.
While COVID cases in recent weeks have started to rise again in many parts of the country, economists do not think the latest increase will be enough to dampen consumer spending, which accounts for 70% of economic activity.
The expectation is that the economy in the current October-December quarter could grow at the strongest pace this year, with some economists forecast GDP could surge to an 8% rate in the fourth quarter.
A Rapid Recovery
For the whole year, the expectation is that the economy will grow by around 5.5%, which would be the best showing since 1984 and a big improvement from last year when the economy shrank by 3.4%. That was the biggest annual decline since an 11.6% plunge in 1946 when the nation was demobilized after World War II.
“After experiencing one of the most severe economic shocks of the past century in 2020, the U.S. economy has displayed one of the most rapid recoveries in modern history in 2021,” Gregory Daco, chief U.S. economist for Oxford Economics, wrote in a note to clients. Daco predicted GDP in the current October-December period would rebound to a growth rate of 5.6%. So far, the improving economy this year has not boosted the approval ratings of President Joe Biden because the U.S., with one of the most rapidly recovering economies, is also caught up in a global supply chain squeeze that is driving prices higher for everything from new cars and gasoline to the cost of food and airline tickets.
Biden last week nominated Federal Reserve Chairman Jerome Powell for a second four-year term to head the central bank. Powell and other Fed officials had earlier in the year insisted that the spike in prices was being caused by temporary factors,
In fact,
The expectation is that the economy in the current OctoberDecember quarter could grow at the strongest pace this year. such as those snarled supply chains. However, recently, the central bank has stressed that if the price increase persist it will be ready to start raising interest rates sooner than expected to slow growth as a way of dampening inflation pressures. Mark Zandi, chief economist at Moody’s Analytics, said he now expected the Fed to boost its benchmark interest twice next year in September and December. Those rate increases will translate into higher borrowing costs for consumers and businesses. But analysts don’t believe the expected two quarter-point rate hikes will be enough to derail the recovery. They are also optimistic that the global pandemic will be less of a drag next year. “I think each new wave of COVID cases will be less disruptive to the economy because more people are getting vaccinated,” Zandi said.
