Adobe Analytics is expecting online holiday shopping to grow by 4.8% this year, to a record $221.8 billion, driven by steep discounting and buy now, pay later purchasing.
Ecommerce growth is forecast to outpace last year’s 3.5% holiday gain, but fall well below the 13.1% gain in pre-pandemic 2019.
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An Adobe survey found that 49% of consumers said they likely will start their holiday shopping in October, and 56% said they will take advantage of early discounts.
Record discounting during Cyber Week
Cyber Week – the period from Thanksgiving to Cyber Monday – is expected to generate record levels of spending. Total spending for that highly-promotional period is expected to hit $37.2 billion, up 5.4% over last year.
Cyber Monday will generate the largest share of that, with an expected $12 billion in spending. Thirty-five percent of the day’s total, or $4.2 billion, will be spent during the busiest period on Cyber Monday, between 6 p.m. and 11 p.m. PT. During the peak hour, 7 to 8 p.m. PT, Adobe expects to see $14.8 million spent online every minute.
Discounting is expected to reach record levels during Cyber Week, and be high throughout the season.
Adobe expects Cyber Week to have the best bargains, with discounts as high as 35%. Discounts during the Prime Day event are expected to be as high as 18%. Discounts of up to 16% are expected to continue through December.
The toy category is expected to have the deepest discounts, according to Adobe. Toy manufacturers need to drive sales and have a winning fourth quarter after sales declines for most of this year.
The forecasted growth rate of 4.8%, while below pre-pandemic levels, “still shows consumers are willing to spend,” said Vivek Pandya, lead analyst for Adobe Digital Insights.
Factored into the forecast are considerations such as ongoing pricing pressures, and the likelihood that Prime Day and October sales will pull some spending out of November and December, Pandya said, in an interview.
Buy now, pay later up 17%
In additional to heavy discounting, broader use of buy now, pay later is expected to fuel holiday spending, he said.
Adobe expects buy now, pay later spending to increase by 16.9% over last year, to $17 billion, up $2.5 billion over 2022.
November is expected to set a record for the most buy now, pay later purchases in a given month, at $9.3 billion.
One in five consumers surveyed said they plan to use buy now, pay later for holiday gift purchases.
Buy now, pay later “is really going to go mainstream in this season, because we’re seeing it being utilized across a lot of different categories,” Pandya said.
Saving money on shipping
Consumers also are expected to try to manage holiday costs, and maximize the value of holiday discounts, by using free and standard shipping, and even pickup in store, and curbside pickup, rather than paying for expedited shipping.
This year, for the first time, the majority of holiday online purchases will be made on mobile devices, rather than desktops.
Mobile devices will be used for 51.2% of holiday online purchases, and add up to a record $113 billion , up from 47% and $99.5 billion in the 2022 holiday season, Adobe reported.
Adobe’s forecast is based on Adobe Analytics data from over 1 trillion visits to U.S. ecommerce sites, covering over 100 million merchandise items in 18 product categories.
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