Adobe: Online Holiday Sales to Increase 5.3%, But Growth Slowing

Online holiday spending in the U.S. is expected to increase 5.3 percent year-over-year to $253.4 billion, according to an Adobe Analytics report released Monday. However, that growth would still be slower than the year-ago holiday season, when online sales rose 8.7 percent from Nov. 1 to Dec. 31, the company said. Adobe’s data tracks more than 1 trillion visits to U.S. retail websites, 100 million unique items and 18 different product categories. That growth is also below the 10-year average of roughly 13 percent annually. That mark was partially skewed by the 32 percent YoY growth in 2020, when consumers leaned on retailers’ online options during the COVID pandemic. Looking at total retail spending this holiday season, Adobe estimates about one in four dollars of holiday sales will be spent online. 

Total Retail's Take: This forecast from Adobe is consistent with what we've been hearing about consumers' mindsets heading into the busiest shopping period of the year: they're cautious and seeking out deals to stretch their spending power. Consider that PwC announced survey results that revealed consumers plan to spend about 5 percent less – or an average of $1,552 – on holiday gifts, travel and entertainment, compared with the year-ago season. The survey included a representative sample of 4,000 U.S. consumers, with the downturn in spending particularly pronounced among younger shoppers.

Retailers are trying to capture their share of holiday spending by promoting discounts and deals earlier on the calendar, catering to a growing number of shoppers that are planning to stockpile gifts ahead of higher prices, potentially influenced by tariffs, later in the season. Furthermore, retailers should be planning for the impact that artificial intelligence platforms will have on consumer behavior this holiday season. According to the Adobe report, AI traffic will rise by 520 percent YoY, peaking in the 10 days leading up to Thanksgiving. Consumers are turning to AI to help guide them in their shopping journeys, using the technology for research, product recommendations, finding deals, and gift inspiration.