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Economic Uncertainty to Impact Online Holiday Spending

Oct 12, 2022 4:15 AM   By Leah Meirovich
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US e-commerce is expected to grow at a slower pace this holiday season due to inflation and a challenging economic environment, according to Adobe Analytics.

Sales will rise 2.5% year on year to $209.7 billion over the November-to-December period, Adobe predicted in its annual holiday shopping forecast Monday. That gain is lower than the 9% year-on-year increase in 2021, when consumers spent $204.5 billion online.

The US economy declined for the second consecutive quarter in the April to June period, with gross domestic product (GDP) down 0.6%. The data compounded recession fears amid high inflation above 8% in September and recent interest rate hikes.

Consumers are therefore seeking early discounts this holiday season, Adobe suggested. Online shopping will start earlier this year, beginning with a second Amazon Prime Day on October 11 to October 12, the company noted. The first Amazon event, which took place in July, drove record online sales of $73.7 billion, up 21% from the year before.

“These discount [events] will entice some consumers to start their shopping soon,” Adobe said. “The holiday season will also be impacted by an uncertain economic environment, as shoppers contend with elevated prices offline, and the rising cost of borrowing.”

Major shopping days will not be as prominent for spending as previous years, as e-commerce becomes more commonplace, and discounting continues throughout the entire season. Digital sales during Cyber Week, which comprises Thanksgiving through Cyber Monday, will grow only 2.8% year on year to $34.8 billion — 17% of the entire holiday season’s spending, Adobe projected.

The company anticipates that Cyber Monday will be the biggest shopping day of the season – as well as the entire year – with sales up 5% to $11.2 billion. By comparison, outlay on Black Friday is forecast to climb 1% to $9 billion, while Thanksgiving sales will slip 1% to $5.1 billion.

Adobe expects electronics, apparel and groceries to be the most popular purchases this year, contributing $103.8 billion, or nearly half of total online holiday spending this season, it said. Meanwhile, discounts will hit record highs this year, as retailers contend with oversupply and softening consumer spending, it added.

Image: Woman shopping online for the holidays. (Shutterstock)
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Tags: Adobe, Adobe Analytics, Amazon Prime Day, holiday shopping, Leah Meirovich, online shopping
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