Dive Brief:
- As shoppers become more price-conscious, Adobe Analytics expects U.S. online sales to reach $253.4 billion during the holiday period from Nov. 1 and Dec. 31, according to a forecast released Monday.
- That would represent 5.3% year-over-year growth, with Cyber Monday expected to remain the most important online shopping day of the season. However, Black Friday is expected to see higher growth than Cyber Monday, up 8.3% this year.
- Adobe expects holiday discounts to remain at similar levels compared to last year, up to 28% off the listed price. Electronics, apparel and furniture are expected to drive a majority of online spend, per Adobe.
Dive Insight:
Adobe’s latest holiday predictions do not cover October, when retailers are more frequently holding early holiday deals events — both online and in stores — and capture some sales from Halloween.
Walmart, Target and Amazon are all competing during October with overlapping deals events. Staples, for the first time, is also getting in on the action with the launch of its Easy Deals Day event, and Kohl’s has expanded its fall sales event to four days this month.
Halloween-related spend could reach a record $13.1 billion, according to a National Retail Federation survey released in September.
The potential for online discounts to remain consistent with those in 2024 might not bode well for consumers this year. Shopper sentiment has become a mixed bag as the year has progressed and consumers have become more price sensitive.
A potential sign of cost pressures, Adobe expects 11% growth in buy now, pay later services for online purchases. BNPL could drive $20.2 billion in online spend, representing about $2 billion more than 2024.
U.S. consumer sentiment dropped in August due to increasing costs and economic anxiety, per McKinsey’s ConsumerWise research. The research found that only about 41% of shoppers are optimistic about the U.S. economy, a slight dip from May, and the number of consumers who said they had mixed sentiment grew to 38%.
Meanwhile, 27% of shoppers expect to spend less this holiday season, according to a new national survey from Experian and GroundTruth. In comparison, 22% of those surveyed expect to spend more this year.
Adobe’s research also found that the share-of-units sold for the most expensive products is expected to increase by 52% in electronics, 39% in appliances and 32% in personal care. In comparison, the grocery and furniture categories are likely to see declines in this trend, with consumers looking for lower-priced items.
As AI grows as a destination for complex shopping queries, Adobe predicts that AI traffic will grow for the 2025 season by 520% year over year. This comes after OpenAI announced a new checkout feature for ChatGPT users last week, initially partnering with Etsy and Shopify, with plans to expand the offerings.