Holiday Spending to Rise 10% But Cyber Weekend Growth Halved: Adobe

Adobe Digital Insights is predicting U.S. holiday spending online will rise 10% over 2020, hitting a record $207 billion, with global spending to reach $910 billion, an 11% increase, while calling for a decreased emphasis on traditionally major days during Cyber Weekend as demand pulls forward.

All told, Adobe is calling for $36 billion in U.S. holiday spending online between during Cyber Weekend, representing 17% of the entire holiday season. However, the growth rate for the five-day period from Thanksgiving through Cyber Monday is projected at 5%, half of what it was a year ago.

This aligns with a recent consumer survey from Oracle Retail, which found more than half of U.S. consumers plan to start their holiday shopping before Thanksgiving to guard against out-of-stocks.

Adobe is calling for Cyber Monday to hit $11.3 billion in sales, up 4%, and remain the biggest online sales day of the season, with Black Friday coming in at $9.5 billion, up 5% and Thanksgiving hitting $5.4 billion, a 6% increase.

The ongoing supply chain shocks are certainly being felt by consumers, as inventory levels remain challenged, reports rise about empty shelves and consumers worry about finding what they’re looking for this holiday season. Compared to January 2020, out-of-stock messages have risen 172%, Adobe found. Of the 18 product categories it tracked, apparel has the highest out-of-stock levels, followed by sporting goods, baby products and electronics.

Inventory shortages are being reflected in higher prices for holiday shopping, as anyone who has bought anything lately can attest. Adobe is projecting prices on items during Cyber Week will be up an average of 9% compared to 2020, the result of smaller discounts as well as nagging inflation. Overall, ecommerce has been observed in online prices for 16 consecutive months, up 3.3% as of September, compared to a 5% decrease in past years. That’s still better than September’s 5.4% rise in the Consumer Price Index.

Not surprisingly given shortages, Adobe is calling for trimmed discounts across categories, with electronics peaking at 22% off during the upcoming season, down from 27% in 2020, computers at 25%, down from 30%, televisions at 15% (18%), appliances at 16% (20%) and toys at 16% (19%).

The growing interest in buy now pay later (BNPL) showed up in Adobe Analytics data, with revenue from installment purchases up 10% vs. 2020 and 45% from 2019. Shoppers are going to BNPL for increasingly less expensive orders, Adobe found, with the minimum order value dropping 12% from 2020 to $225. In the Adobe survey, 25% of respondents said they’ve used BNPL in the last three months, with apparel (cited by 43%), electronics (33%) and groceries (30%) as the top categories.

“We are entering a second holiday shopping season where the pandemic will dictate the terms,” said Patrick Brown, vice president of growth marketing and insights, Adobe. “Limited product availability, higher prices, and concerns about shipping delays will drive another surge towards ecommerce as it provides more flexibility in how and when consumers choose to shop.”

Adobe Digital Insights is based on over one trillion visits to U.S. retail sites and over 100 million SKUs in 18 product categories. Its survey findings were based on responses from 1,012 U.S. consumers between Sept. 23 and Oct. 1.