Adobe: 2020 holiday online spending to break all previous records
E-commerce spending is set to skyrocket this holiday season as many customers continue to limit their time in physical stores amid the pandemic.
U.S. holiday online sales will total $189 billion, up 33% over last year’s holiday season, according to Adobe Analytics Holiday Forecast 2020. The increase, equal to two years’ growth in one season, would shatter all previous records.
Depending on two important factors, online holiday spending could get an even further boost, Adobe said. If consumers receive another round of stimulus checks or physical stores need to close in large parts of the country due to COVID-19 outbreaks, online spending will jump an additional $11 billion, surpassing $200 billion, for a 47% year-over-year increase.
Instead of Cyber Week (Thanksgiving Day – Cyber Monday), Adobe predicts November and December will turn into “Cyber Months” this year. Online sales will surpass $2 billion every day between Nov. 1-21 and increase to $3 billion a day Nov. 22 – Dec 3.
Black Friday is projected to generate $10 billion in online sales, a 39% increase over last year. Cyber Monday will remain the biggest online shopping day of the year, with sales jumping 35% to $12.7 billion.
Affordable and free shipping options will be in high demand this holiday. With 64% of consumers saying they won’t pay for expedited shipping this year, retailers need to communicate their free shipping cut-off dates clearly, Adobe advised. Retailers will offer the cheapest shipping options on the day after Cyber Monday.
“As retailers adapt to consumers’ new behaviors in this pandemic, we expect earlier discounts, more shipping and pick-up options and uncertainty around in-store purchases to drive this year’s online holiday sales to record highs,” said John Copeland, head of marketing and customer insights at Adobe. “This year is unlike any in the past, and for the first time we are no longer referring to peak holiday sales as Cyber Week - it’s now Cyber Month.”
Here are other highlights from the Adobe report.
- Twenty-six percent 26% of consumers said that the outcome of the election will impact their holiday spending. Based on past elections, online sales were negatively impacted after the outcome was known. Online sales were down 14% the day after the 2016 election, and dropped by 6% the day after the 2018 midterm election.
- Mobile spending will increase 55% to $28.1 billion, accounting for 42% of all online sales.
- BOPIS (buy online, pick up in store), now including curbside pick-up, will have more than 40% more orders vs. 2019. As people panic buy the week leading up to Christmas, BOPIS is expected to top 50% of all orders at retailers that offer the service.
- Large retailers (annual online revenue more than $1 billion) will continue to dominate with online sales growing 55% year-over-year versus 8% for small retailers.
- Fifty-one percent consumers plan to support small and local retailers on Small Business Saturday; 38% plan to shop at smaller retailers throughout the season.
- Nine percent of all holiday customers will be net new online shoppers due to the pandemic, and conversion rates are expected to increase significantly (13%).
Based on Adobe Analytics data, Adobe analyzed over one trillion visits to U.S. retail sites and 100 million SKUs from 80 of the 100 largest U.S. retailers for the report.