Adobe Sees Holiday Sales Online Up 4.8% to $221.8 Billion
Deep discounting, more mobile shopping and moderate sales gains.
That’s how 2023 holiday shopping will play out online in the U.S., according to Adobe, which predicts U.S. online sales from November to Dec. 31 will rise 4.8 percent year-over-year to $221.8 billion.
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In the 2022 holiday season, shoppers spent $211.7 billion online, a 3.5 percent rise from the year before, Adobe indicated.
While the holiday outlook from Adobe, released Thursday, is generally positive, the gain is nothing near the 13 percent in 2019. As the software giant indicated, retailers continue to contend with an uncertain spending environment and consumers are still dealing with rising costs, particularly in areas such as food and gas. Inflation in the U.S. is currently 3.7 percent.
“We are seeing consistent and persistent holiday demand for goods from consumers, but the growth is not where we were pre-pandemic. The growth is more incremental,” Vivek Pandya, lead analyst for Adobe Digital Insights, told WWD. “Consumers are still dealing with pricing pressures but they are going to get what they need for holiday. There is still a stable amount of demand on consumers’ part. That is positive.”
However, Adobe’s Digital Price Index shows prices online fell consecutively for 12 months and were down 3.2 percent year-over-year in August. Adobe’s numbers are not adjusted for inflation, but if online deflation were factored in, growth would be in the range of 7.7 to 8.3 percent.
Apparel remains a major category for the holiday and is set to drive $41 billion in sales online, but it will be down 0.7 percent year-over-year, reflecting some shift back to in-store shopping for fashion, Adobe said. The shift to shopping more at stores witnessed this year is also a factor in dropping prices online.
Other categories will fare better online this holiday season than apparel, the company predicts. Electronics will rise 3.4 percent, driving $49.9 billion in online sales; furniture/home goods at a projected $26.6 billion would gain 4.7 percent; groceries at $18.9 billion would be up 10.9 percent, and toys at $7.8 billion in sales online for holiday would be up 5.4 percent.
Of the 18 categories tracked, toys, electronics and apparel are expected to have the biggest deals, followed by sporting goods, TVs, furniture and bedding, Adobe indicated.
The forecast is based on Adobe Analytics which analyzes more than 1 trillion visits to U.S. retail websites, 100 million stock keeping units and 18 product categories, and largely draws from historical data as well as current consumer trends including how shoppers reacted to major sale days such as on Mother’s Day, Presidents’ Day and Memorial Day.
Adobe’s 2023 holiday forecast, while just analyzing online sales, seems more optimistic than Mastercard’s, which in September predicted retail sales — online and offline — in the U.S. will rise 3.7 percent. Also, Mastercard’s holiday forecast pertains to the Nov. 1 to Dec. 24 period, one week less than Adobe’s forecast. Both forecasts are in nominal numbers, which excludes inflation, currently at 3.7 percent. Many websites and omnichannel retailers will begin their holiday campaigns this year in October, as they did last year, so when they tally up their holiday sales, they could consider three months versus two months. Amazon’s second Prime Day event is scheduled for Oct. 10 and 11. Around that time, competitors will launch their own promotions offering discounts. Adobe’s survey of more than 1,000 U.S. consumers found that 49 percent of respondents expect to start this year’s holiday shopping in October.
Adobe’s outlook suggests some 2023 holiday trends outside the norm, among them that shopping on mobile devices is expected to drive 51.2 percent of the holiday business, surpassing shopping on desktops for the first time. That’s a sign that consumers are getting increasingly comfortable using small screens for shopping and other purposes and that mobile technologies are improving.
Adobe also predicts:
“Never-before seen discounts” will pervade the industry, with up to 35 percent off listed prices. The biggest discounts will hit Cyber Week. The 35 percent discount rate is an aggregate or average of many categories, Pandya noted. Furniture, home, hardware and tools, as examples, tend to be well below the 35 percent; apparel and accessories above.
Increased use of buy now, pay later flexible spending plans will rise 16.9 percent, driving $17 billion in online spending compared to 14.5 billion in 2022. The Adobe survey of 1,000 U.S. consumers found that one in five respondents plan to use BNPL to buy gifts this holiday season.
Cyber Week — the shopping period including Thanksgiving, Black Friday and Cyber Monday — will drive $37.2 billion in online spending, up 5.4 percent year-over-year and representing 16.8 percent of the holiday season.
Cyber Monday remains the season’s and year’s biggest shopping day, driving a record $12 billion in spending, up 6.1 percent year-over-year.
Black Friday online sales should grow 5.7 percent year-over-year to $9.6 billion, with Thanksgiving growing 5.5 percent to $5.6 billion online.
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