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12/15/2021

Forrester: Online holiday sales will near $200 billion in 2021

Dan Berthiaume
Senior Editor, Technology
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Forrester sees increasing U.S. online holiday sales.

Forrester projects cooling, but still notable, growth in U.S. online sales for the 2021 holiday season.

According to Forrester analysis, after historic 30% growth in 2020, US online holiday sales will grow 10% year-over-year in 2021, reaching just under $200 billion. This rate marks a steep deceleration from the 30% growth that Forrester tracked during the 2020 holiday season, but will still be positive despite supply chain headwinds and a return to in-person shopping.

Forrester expects U.S. online holiday sales in 2021 to be 43% higher than they were in 2019 ($139 billion), adding close to $60 billion over just two years. Supply chain issues, a resurgence of in-person shopping, and spending on restaurant meals and travel are expected to shift some consumer spend away from online purchases. However, a strong consumer economic position and an enduring long-term shift to online shopping is projected to continue to produce more online sales for the current holiday season.

Specific Forrester observations about U.S. online holiday sales in 2021 include:

Supply chain issues will affect every major retailer, but many are prepared. Supply chain issues have been an issue for many retailers and manufacturers during the pandemic. However, Forrester expects these issues will have a bigger impact on the 2021 holiday season and into 2022, with increased freight costs and investment forcing retailers to raise prices of some products or will eat into profits over the next few months.

[Read more: Biden meets with CEOs about supply chain issues]

An earlier start to promotional events is here to stay.
After temporarily moving to October 2020, Prime Day 2021 returned to its more regular summer scheduling. Nevertheless, numerous retailers once again began Black Friday discounts earlier in November, a trend that has been growing for several years. While discounts are happening, they may not be as deep, and prices will be higher than they’ve been in years past.

[Read more: Three ways early Black Friday is shaking up retail]

In October 2021, Adobe issued an online holiday spending forecast that was very similar to the new predictions from Forrester. Adobe also predicted a 10% year-over-year increase in digital sales for the 2021 holiday season, but said U.S. online holiday sales will reach $207 billion between Nov. 1 - Dec. 31, 2021. Adobe is also forecasting global online holiday sales to grow 11% to $910 billion, with over $4 trillion to be spent globally online in all of 2021, a new milestone for e-commerce.

Adobe’s analysis also agreed with Forrester’s data showing that weakened supply chain is driving up online prices. Adobe expected U.S. consumers would pay 9% more on average during Cyber Week 2021, compared to the previous holiday season. According to Adobe, this is the result of smaller discounts, on top of e-commerce inflation that has persisted through the year.

Forrester forecasts are designed by a dedicated team of forecasting analysts who build the models, conduct industry research, and manage the process of formally building consensus among Forrester’s analysts.