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10/20/2021

Adobe: Online holiday sales to set record despite supply chain issues

Dan Berthiaume
Senior Editor, Technology
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Adobe is predicting the highest-ever U.S. online holiday sales.

Online retailers have reason to be merry this holiday season, as Adobe is predicting a 10% year-over-year increase in digital sales.

According to the new Adobe online shopping forecast for the 2021 holiday season, U.S. online holiday sales will reach $207 billion between Nov. 1 - Dec. 31, 2021. This represents a 10% increase from 2020. Adobe is also forecasting global online holiday sales to grow 11% to $910 billion. Adobe expects over $4 trillion to be spent globally in all of 2021, a new milestone for e-commerce.

Interestingly, Adobe analysis indicates growth of smartphone-driven shopping has hit a ceiling. Adobe expects smartphones to account for 42% of overall revenue during the 2021 holiday season ($86 billion), a modest 5% increase from 2020.

Adobe data also shows traditional major shopping days are losing prominence. Cyber Week (Thanksgiving through Cyber Monday) is expected to drive $36 billion in online spending, representing 17% of the entire holiday season. The growth is slowing, however, coming in at 5% year-over-year for the five-day period (less than 10% overall year-to-year seasonal growth in online commerce). 

Adobe expects Cyber Monday to drive $11.3 billion in online sales, up 4% year-over-year, and remain the biggest e-commerce sales day of the season and year. Black Friday comes in second at $9.5 billion (up 5% year-over-year) and Thanksgiving at $5.4 billion (up 6% year-over-year).

Supply chain disruption creates impact
Compared to a pre-pandemic period (Jan 2020), Adobe data shows that the prevalence of out-of-stock messages has risen 172% going into the holiday season. Adobe expects out-of-stocks to remain at this level, increasing for certain products throughout the season. In an Adobe consumer survey, 65% of shoppers are concerned about shipping delays this year.

Of the 18 categories tracked by Adobe, apparel has the highest out-of-stock levels currently, followed by sporting goods, baby products, and electronics.

[Read more: Oracle: Holiday shoppers on edge over out-of-stocks, delivery delays]

A weakened supply chain is also driving up online prices. Adobe expects U.S. consumers will pay 9% more on average during Cyber Week this year, compared to the last holiday season. According to Adobe, this is the result of smaller discounts, on top of e-commerce inflation that has persisted through the year. Adobe forecasts discounts will be in the 5% to 25% range across categories this season, compared to a historical average of 10% to 30%. 

Inflation in e-commerce has been observed since June 2020 (16 consecutive months) with online prices up 3.3% going into the holiday season (Sept 2021). In past years, online prices were down 5% year-over-year on average prior to the shopping season. E-commerce prices have not risen as quickly as offline prices, however, with the latest Consumer Price Index up 5.4% year-over-year (Sept 2021).

“We are entering a second holiday season where the pandemic will dictate the terms,” said Patrick Brown, VP of growth marketing and insights, Adobe. “Limited product availability, higher prices, and concerns about shipping delays will drive another surge towards e-commerce, as it provides more flexibility in how and when consumers choose to shop.”

Other interesting findings include that Adobe expects curbside pickup to peak from Dec. 22-23 (right before Christmas Eve), at a record 40% of all online orders, while remaining at 25% through November 2021.

Adobe bases its online shopping forecast on the Adobe Digital Economy Index, analyzing direct consumer transactions online. Based on Adobe Analytics data, the analysis covers over one trillion visits to U.S. retail sites, 100 million SKUs, and 18 product categories, with global views based on transactions in over 100 countries across three regions.