Online shoppers will be offered record-breaking discounts this holiday season as retailers try to entice inflation-weary consumers to buy, according to forecasts released Thursday by Adobe Analytics. And the company believes the strategy will work: Online holiday sales are up nearly 5% year-over-year.
Retailers are poised to offer up to 35% off list prices this holiday season, with the biggest discounts on toys, electronics and apparel, Adobe said in its annual holiday forecast.
The company expects consumers to take advantage of these offers and spend aggressively, even as concerns remain about rising costs and the health of the economy.
According to Adobe, consumers are expected to spend $221.8 billion on online purchases between November 1 and the end of the year. That would represent solid 4.8% year-over-year growth, accelerating growth to 3.5% in 2022.
So what will people buy? Adobe says the hottest sellers this season will include LEGO minifigures, Kanoodle 3D, Barbie the Movie products, PlayStation 5, Xbox Series X, Madden NFL 24, iPhone 15 models and Birkenstock Bostons.
Where are the biggest discounts?
Discounts on toys will peak at 35% off list prices, an increase over the peak discounts of 34% offered last year, Adobe said.
Other online categories where significant discounts can be expected include electronics (up to 30%), clothing (up to 25%), sporting goods (up to 24%), televisions (up to 22%), and furniture and Bed linen (up to 11%). ). All are deeper discounts than last year.
The discounts are also expected to arrive sooner than in the past. Adobe says discounts of up to 18% will begin as early as next week as Amazon hosts a second Prime Day event.
Consumers continue to turn to increasingly popular “buy now, pay later” options like Affirm and PayPal, which provide an alternative to credit cards.
Buy Now, Pay Later is expected to drive a record $17 billion in online spending this holiday season, up 17% from 2022, Adobe said.
Americans are also increasingly doing their Christmas shopping (and shopping in general) using smartphones and tablets.
It is estimated that just over half (51.2%) of all online spending this holiday season will occur on mobile devices, potentially marking the first time mobile will overtake desktop.
Online prices defy the inflation trend
It’s important to note that shopping numbers like the Adobe report and government retail sales are not adjusted for inflation.
Rising prices can distort purchasing figures if they are not adjusted for inflation. The Commerce Department recently reported that retail sales rose 0.6% between July and August. However, given that consumer prices rose by 0.5% over this period, real (inflation-adjusted) retail sales were hardly positive, growing by 0.1%.
But unlike the rest of the economy, where prices are rising unusually quickly, online prices have been falling, and have been consistently so for a year. In fact, last month was the biggest annual decline in three years, according to Adobe.
That means Adobe’s 2023 holiday shopping forecast, which calls for solid sales growth, would signal a real increase in consumer demand.