Adobe projected Monday that online shopping sales are expected to reach $209.7 billion this holiday season amid consumers grappling with scorching-hot inflation and rising borrowing costs.
According to Adobe, the projected total for online shopping sales during the 2022 holiday season spanning Nov. 1 to Dec. 31 would constitute a 2.5% increase from 2021, when shoppers spent $204.5 billion online. Nearly half of the projected $209.7 billion in online spending is expected to come from electronics ($49.8 billion), apparel ($40.7 billion) and groceries ($13.3 billion).
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However, the upcoming holiday season “will look different this year, with early discounting in October pulling up spend that would have occurred around Cyber Week,” Adobe’s vice president of growth marketing and insights, Patrick Brown, said in a statement.
Amazon announced in late September that it will hold a Prime Early Access Sale on Oct. 11 and 12, which Adobe expects will make consumers start spending earlier. Target and Walmart have also announced early holiday sales events set to take place in October.
Cyber Week, which runs from Thanksgiving through Cyber Monday, will drive $34.8 billion in online sales, making up 16.3% of the holiday season’s online spending, Adobe projected. Last year, Cyber Week’s deals comprised 16.6% of online holiday shopping sales.
While the early October deals are projected to impact Cyber Week’s performance, Cyber Monday – the Monday after Thanksgiving – is still projected to remain the “season’s and year’s biggest shopping day,” according to Adobe. Consumers are expected to spend $11.2 billion on the internet that day, a 5.1% increase from 2021.
Black Friday profits are projected to hit $9 billion. Adobe forecasted that Thanksgiving is expected to drive fewer profits this year, dropping to $5.1 billion.
The overall online holiday shopping season will be impacted by the “uncertain economic environment,” according to Adobe.
INFLATION ROSE FASTER THAN EXPECTED IN AUGUST, KEEPING PRICES PAINFULLY HIGH
In August, inflation – measured by the Consumer Price Index – rose 8.3% from the prior year and 0.1% from July, the U.S. Department of Labor said in mid-September.
Food prices and shelter costs rose monthly and annually in August, going up 11.4% and 6.2%, respectively, from a year ago. While gas prices dropped over 12% in August, they have still soared 25.6% from the prior year, according to the Department of Labor.
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To get inflation lower, the Federal Reserve has raised interest rates multiple times this year, including three back-to-back 75-basis-point hikes.
Meanwhile, Adobe projects that this holiday season will see record-high discounts, with the largest occurring between Thanksgiving and Cyber Monday, as retailers “contend with oversupply and a softening consumer spending environment.” Computers, electronics and toys, in particular, will have significant discounts, according to Adobe.
Deals are expected to hit up to 20% from the day after Cyber Monday through the rest of the year. In addition to the discounts in October, these will “offer greater flexibility to consumers who need to manage their budgets in new ways this year,” Adobe said.
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