📶 Black Friday shoppers put up BIG numbers this year

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Good morning 👋

We hope that each of you had a great Thanksgiving and were able to spend some time with family.

This week we’re breaking down the record-breaking spending numbers from Black Friday. We’ll give our take on what happened, why it matters, and where smart investors can make money from a number of trends happening within e-commerce.

Let’s get into it.

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NEWS
Black Friday shoppers put up BIG numbers 🛒

Remember as a kid when Black Friday meant the mall becomes your personal playground to break laws while you shop for 15% discounts on things you don’t need?

Maybe that still goes on in certain malls, but for most, Black Friday has moved online. In fact, Americans spent $9.8 billion on Friday alone, a 7.5% increase from last year.

Why it matters:

Consumer spending habits aside, there are a few things worth mentioning about this year’s spending spree.

• Mobile shopping dominance: 54% of online sales ( $5.3 billion) were done through a mobile device. According to Adobe Analytics, that number is expected to overtake desktop shopping for the first time this year.

• Extended discount periods: Black Friday used to be what is sounded like. Then it extended to Cyber Monday. Now it seems like every major retailers is running sales campaigns starting the Friday before. Extended discounts are great if your business is valued off of top line revenue alone, but we expect this new normal to compress margins in an already-tight industry.

• BNPL becomes more popular: Americans LOVE debt, and BNPL allows shoppers to forget about the pain of shopping by spreading payments out over an extended period of time. According to Adobe, the use of BNPL soared 47% from a year ago to $79 million on Black Friday. It’s not a huge number when you zoom out, but it appears to be a growing trend.

What happens next:

By the time you read this, Cyber Monday will have come and gone, and there will be even more data to suggest more of the same: more money will go into making it easier for consumers to spend more money.

Nearly 70% of GDP is driven by consumption. As long as that stays consistent (we’re betting it does), smart investors will take a picks-and-shovels approach to enable easier spending.

A few subcategories that are getting attention within VC circles include better fulfillment and delivery solutions, fraud protection, loyalty and incentives programs, inventory management solutions, e-commerce-as-a-service, and price optimization software. If we were investing in the category, we would look at companies like this that help make it easier for consumers to open their wallets.

To find more e-commerce trends, follow the investors investing within the category.

LINKS

❌ Mistakes of Omission: One of the best investor presentations I’ve read

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📖 The Guide to Fund of Funds: How to make sense of FoFs

➡️ 16 Lessons from Ben Horowitz: How the GP at a16z looks at the world

✅ VC Notion Templates: Looking to shortcut some of your process templates? Grab our best VC resources to duplicate within your own Notion account.

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- Clay and Tyler

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