The forecasts: US shoppers will spend $78 billion this Cyber Week, up 3% YoY and an all-time high, according to Salesforce.

• A separate report by the National Retail Federation and Prosper Analytics is similarly bullish, forecasting a record number of shoppers during Thanksgiving weekend—186.9 million—as consumers turn out in droves to secure Black Friday and Cyber Monday deals.
• We expect ecommerce sales during the Cyber Five (the five days from Thanksgiving through the following Monday) to increase 6.9% YoY to $46.48 billion, with Cyber Monday and Black Friday accounting for nearly 60% of online spending during the period.

Behind the numbers: While retailers have lengthened their Black Friday sales events considerably in the hopes of capturing more spending, most shoppers are inclined to make purchases on the day itself. This may stem from the assumption that businesses are waiting until Friday to unleash their deepest discounts.

• The NRF and Prosper Analytics forecast that 70% of Thanksgiving weekend shoppers—130.4 million people—will shop on Black Friday, far exceeding the 73.9 million that plan to take advantage of Cyber Monday.
• Black Friday is expected to be the top shopping day across the entire holiday season for the fifth time in the past six years, according to Bain.
• Consumers are leaning on this week’s sales to get a sizable portion of their holiday shopping done: 1 in 3 Black Friday shoppers plan to make at least half of their seasonal purchases that day, while 46% expect to get anywhere from one-quarter to 49% done, per a LendingTree survey.

The AI influence: AI is set to play a larger role in how shoppers find and buy products this year. Of the $334 billion in global Cyber Week spending forecast by Salesforce, $73 billion will be influenced by AI and agents, a 22% increase YoY.

• Measuring AI’s influence on sales can be challenging given how many retailers have embedded the technology in ways that may not be immediately obvious to shoppers—such as search enhancements and better personalization.
• However, there are indications that shoppers are becoming more intentional about using AI tools like ChatGPT or Amazon’s Rufus to help them make shopping decisions. A survey by Experian found that nearly two-thirds of consumers (63%) are open to using AI to improve their holiday shopping experience, particularly for finding the best prices and deals.
• Younger generations in particular are enthusiastic about the technology’s potential: 61% of Gen Zers and 57% of millennials already use AI tools to shop, and roughly half of both age groups say they would allow AI to handle gift buying to avoid stress, according to a Mastercard survey.

Our take: Cyber Five will be a barometer for the rest of the holiday season. While we expect healthy topline growth, driven by the resilience of higher-income consumers, shoppers on the whole are being much pickier about how and where they spend.

• Falling consumer sentiment is a major headwind for retailers like Target and Bath & Body Works, which are having a difficult time convincing consumers that their products are worth the money.
• On the other hand, value-oriented retailers like Walmart and TJX are well-positioned to capture a greater share of holiday spending from shoppers looking to stretch their dollars as far as they can go.