Holiday E-Commerce Sales Growth to Shrink to 2.5% Nov.-Dec., Says Adobe
Online holiday sales will grow at just 2.5% November-December, to an estimated $209.7 billion, said Adobe Analytics on a Wednesday webcast. “This is the slowest growth we’ve ever seen” in Adobe’s 10 years of doing modeling and “pretty much in the history of the internet,” said analyst Taylor Schreiner, saying online holiday sales growth typically averages “low teens to high teens.”
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Analyst Michael Klein noted the tough comparisons with 2021 and 2020. Growth in 2020 was 33%, followed by 9% last year, he said. “Over $200 billion of e-commerce in the United States is still a significant amount of revenue and volume," said the analyst, "and anybody in retail knows that double-digit comps year over year are just that much more challenging the bigger the number gets.” He also noted that, in addition to inflation concerns, consumers don’t have stimulus funds to support extra spending this year.
October sales, led by Amazon's Early Access event for Prime members, pulled forward some holiday shopping, said the analysts. But the best discounts across categories are expected to activate during the week before Thanksgiving when consumers are primed for Cyber Week promotions, said the analysts.
Heavy electronics marketing and discounting are expected to generate “persistent growth” for electronics, said Klein. Adobe forecasts 2.9% year on year growth for technology to $49.8 billion, fueled by “strong discounts.” Apparel spending, by comparison, is expected to fall 6.7% November-December to $40.7 billion. Groceries will drive an online spend of $13.3 billion, largely due to inflation, Klein said.
Klein predicted “record discounts on electronics” during Cyber Week, with up to 27% discounts on electronics such as headphones on Thanksgiving, 19% on Black Friday for TVs and 32% on computers during Cyber Monday sales. Retailers still need to be concerned about margin, Klein said, but “there are certain items, especially in the toy category and consumer electronics, that if those items are on the shelf in January, the retailer is probably going to take an even bigger beating on their margin if they still have that inventory," Klein said.