Holiday buying via the internet is set to reach almost $210 billion in total this year, according to Adobe's forecast.
As the holiday season approaches, retailers are bracing themselves for changes in consumer spending patterns. With Amazon's second Prime Day happening in October this year, and other retailers following suit, some spending is expected to occur earlier than usual.
Industry experts and retailers have had to revise their future projections to account for these shifts. Inflation, a major economic factor, is causing consumers to reconsider their spending habits, impacting retailers' financial predictions.
According to a report by Adobe Analytics, consumers could spend $103.8 billion on electronics, apparel, and groceries online during the holiday season. This spending represents about half of the anticipated overall spending during the holiday season.
Adobe Analytics predicts consumers will spend $209.7 billion online between November 1 and December 31, a 2.5% increase from the $204.5 billion spent online in 2021. However, the growth in digital sales during Black Friday is expected to be minimal, with sales only growing 1% to $9 billion, according to Adobe's forecast.
Last year during the holidays, Adobe found that Buy Now, Pay Later (BNPL) revenue increased by 27% compared to 2020 and 475% compared to 2019. However, Adobe predicts a slowdown in BNPL transactions during the holiday season this year.
Retailers are contending with higher costs for labor and rent this holiday season, which may affect their ability to offer generous discounts. Adobe predicts that consumers will see discounts as early as the second week of October, with retailers offering discounts as high as 15% off.
Major retailers, including Target, Walmart, and Best Buy, have changed their financial predictions in recent months as a result of changing consumer behavior. Target introduced holiday deal days in early October, and Walmart announced early deals in the same week. Kohl's did not specify a date for their holiday deals.
Cowen analysts foresee risks to retailers' holiday projections due to these higher costs. No relevant information was found regarding which major retail chain launched its own "Holiday Deal Days" between October and December 2022 before Cyber Monday and Black Friday.
Despite these challenges, Adobe anticipates that consumers will spend $11.2 billion during Cyber Monday, a 5.1% year-over-year increase. The holiday season digital sales for electronics, apparel, and groceries are expected to reach $103.8 billion, according to Adobe's report.
As the holiday season unfolds, it will be interesting to see how retailers navigate these changing consumer habits and economic factors.
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