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October 11, 2022

Adobe: Amazon Stretching Holiday Shopping Season

Posted In: Retail Articles

With its forecast impacted by an Amazon promotion it expects will draw considerable purchasing into October, Adobe stated that it expects online holiday-period sales in the United States to grow just 2.5% year over year, reaching $209.7 billion.

Over the November 1 to December 31 period that Adobe designates as the holiday sales season, consumers in 2021 spent $204.5 billion, up 8.6% year over year.

As part of its holiday 2022 forecast, Adobe noted that consumers are likely to spend earlier this year given Amazon’s second Prime Day event, dubbed Prime Early Access, from October 11-12, which has been joined by promotional initiatives launched by its rivals including Walmart and Target

The first Prime Day event drove record online sales for the retail industry overall, Adobe indicated, with $73.7 billion spent in July, the month when it was held this year, up 20.9% year over year. Amazon discounts will entice some consumers to start shopping sooner, Adobe asserted, which will have an effect on Cyber Week performance. Inflation and higher borrowing costs also will affect consumer spending, Adobe added.

Together, electronics, apparel and groceries will contribute $103.8 billion in online sales in the upcoming holiday season, nearly half of what Adobe expects for overall spending.

The economic environment will put pressure on retailers to respond with promotions, and, as they do so, Adobe expects that discounts will hit record highs, upwards of 32%, this holiday season, as retailers also contend with overabundant inventories. Adobe anticipates discounts for computers to reach as high as 32% on average, up from 10% in 2021. Discounts will run across categories to varying degrees with appliances at 18% versus 4% in the 2021 holidays, and furniture and bedding at 11% versus 2% in the year-ago season.

Adobe expects the biggest discount to hit between Thanksgiving and Cyber Monday. Thanksgiving Day will be the best day to shop for electronics, it stated while Black Friday will provide the best deals for televisions. Saturday will see the biggest discounts for toys, with the best deals for apparel and sporting goods arriving on Sunday, November 27. Computer and furniture shoppers should do their purchasing on Cyber Monday, and appliances will see top discounts on December 1, Adobe noted.

Other observations from Adobe include:

  • Buy Now Pay Later. In 2020, the Buy Now Pay Later payment method saw significant growth as the pandemic drove many consumers to manage their budgets in different ways. Online revenue share for BNPL grew an impressive 31.6% in the 2021 holiday season year over year. This year, BNPL use is likely to slow as from January to September 2022, online revenue share from BNPL grew only 5% versus the same period in 2021. Although growth has been pressured by the broader economic environment and a slowdown in consumer spending, Adobe asserted that BNPL also is contending with challenges in demonstrating value to mass consumers.
  • Most Anticipated Gifts. Based on data and analyses of market trends and social media buzz, Adobe expects top toys this season to be the Got2Glow Fairy Finder, Mini Brands, Squishmallows, LOL Surprise Dolls, Bluey toys, Disney Encanto and Cocomelon. Among gaming devices, the Nintendo Switch OLED, PlayStation 5 and Xbox Series X look to generate the most demand, with top games including Overwatch 2, Pokémon Scarlet/Violet, NHL 23 and Call of Duty: Modern Warfare II. Other likely top gifts include the Dyson Airwrap Styler, Apple Watch Series 8/Ultra, AirPods Max/Pro, Stanley Tumblers and gift cards.
  • Curbside Pickup. In December 2021, curbside pickup represented 25% of all online orders as consumers looked for faster and safer ways to shop. Because it determined that pickup has become an ingrained part of the purchasing process, Adobe anticipates that curbside order fulfillment will peak from December 22 to 23 and total about 35% of all online orders, while remaining at around 25% through November 2022.
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