Online shoppers will be offered record-setting discounts this holiday season as retailers attempt to entice inflation-weary consumers to buy, according to projections released Thursday by Adobe Analytics. And the company predicts the strategy will work, with online holiday sales climbing almost 5% above last year.
Retailers are poised to offer up to 35% off listed prices this holiday season, with the deepest discounts applied to toys, electronics and apparel, Adobe said in its annual holiday forecast.
The company expects consumers to seize on these deals, and spend aggressively even as concerns about rising costs and the health of the economy continue to linger.
Consumers will likely spend $221.8 billion via online shopping between November 1 and the end of the year, according to Adobe. That would represent solid growth of 4.8% year-over-year, an acceleration of the 3.5% growth in 2022.
So what will people be buying? 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.
Discounts for toys are seen peaking at 35% off listed prices, a nudge above the 34% peak discounts offered last year, Adobe said.
Other online categories where significant discounts are expected include electronics (up to 30%), apparel (up to 25%), sporting goods (up to 24%), TVs (up to 22%) and furniture and bedding (up to 11%). All are deeper discounts than last year.
Discounts are also expected to arrive earlier than in the past, with Adobe saying discounts of up to 18% will begin as early as next week as Amazon holds a second Prime Day event.
Consumers continue to turn to increasingly popular Buy Now, Pay Later options like Affirm and PayPal that 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 doing more and more holiday shopping (and shopping in general) on smartphones and tablets.
This holiday season just over half (51.2%) of all online spending is projected to take place on mobile devices, potentially marking the first time mobile surpasses desktop.
It’s important to note that shopping figures, like the Adobe report and government retail sales figures, are not adjusted for inflation.
Rising prices can skew shopping figures when they’re not adjusted for inflation. For example, the Commerce Department recently reported that retail sales rose by 0.6% between July and August. But given that consumer prices rose by 0.5% over that span, real (inflation adjusted) retail sales were barely positive at 0.1% growth.
However, unlike the rest of the economy, where prices have been rising unusually fast, online prices are falling and have been consistently for the past year. In fact, last month marked the biggest annual drop in three years, according to Adobe.
That means Adobe’s 2023 holiday shopping forecast for solid sales growth would signal a genuine increase in demand from consumers.