Adobe Releases Holiday Predictions

Today, Adobe releasedits online shopping predictions for the 2020 holiday season (11/1 –12/31).The presentation deck on the predictions can be found here.

 Based onAdobe Analytics data, Adobe analyzed over one trillion visits to U.S. retail sites and100 millionSKUs from 80 of the 100 largest U.S. retailers– more than any other technology company.

 Adobepredictsthat U.S. onlineholidaysales willtotal $189 billion,shattering all previous records witha33%YoYincrease,equal to two years’ growthin one season. Ifconsumers receive another round of stimulus checks andphysical stores need to shut down in large parts of the country,consumersare expected to spendan additional $11billiononline, surpassing a total of $200billion (47%YoYincrease). 

 Instead of Cyber Week (ThanksgivingDay–Cyber Monday), Adobe expects November and December to turn into Cyber Months this year: 

• Daily Records:Online sales willsurpass$2 billion every day between Nov. 1-21and increase to $3 billion a day Nov. 22–Dec 3. 
• Black Friday, Cyber Monday:Black Friday is projected to generate$10 billion in online sales, a 39% YoY increase;Cyber Monday willremainthebiggest online shopping day of the year with $12.7 billion, a 35%jump YoY.  
• Smartphone Share:Americans will spend $28.1billion more on their smartphonesvs.2019, accounting for 42%of all online sales, a55%increase YoY. 
• Small vs. large retailers:Smallretailers ($10M-$50M annual online revenue) will see a largerboost to revenue(107%boost)vs. large retailers (84%boost).More details below. 
• Mostanticipatedgifts/toys:Rainbocorns,Cutetitos, Little Live Pets, Star Wars toys and LEGO sets.Video games:Cyberpunk 2077, Call of Duty: Black Ops Cold War, Spider-Man: Miles Morales, Mario Kart Home Circuit,Super Mario 3D All Stars. Game consoles:Playstation5, XboxSeriesX, Nintendo Switch. 
• New shoppers: Adobe expects 9% of all holiday customers to be net new online shoppers due to the pandemic, and conversion rates are expected to increase significantly (13%). The Average Order Value (AOV) is expected to stay flat YoY.
• Election Week (Nov. 1-7) will total $16.3 billion in online sales.On the day after the election, online sales will grow11%slowerthan the full week. 

 “As retailers adapt to consumers’ new behaviors in this pandemic, we expect earlier discounts, more shippingandpick-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, andfor the first time we are no longer referring to peak holiday sales as Cyber Week - it’s now Cyber Month.” 

 Additional predictions: 

• CyberWeekturns into Cyber Months:In the weeks leading up to the Thanksgiving weekend(Nov. 1-22),Adobe predicts that consumers will spend $56billion, a37%YoYincrease.Amid concerns around shipping delays, product demandand the uncertain economic environment, retailerswillstart holiday sales much earlierthisseason. A record 33%of consumers plan to have their holiday shopping complete by Black Friday.
• Earlydiscounts inNovember:Significantholiday discountingwill beginwithin the first two weeks ofNovember andbuild to thedeepestcategory pricedropsoverBlack Friday through Cyber Monday: 

o   Black Friday will be thebestday togetdiscounts on appliances(discounted by 11% on average) and TVs (19%) 

o   Small Business Saturday(Nov. 28)isexpected to drive the steepest discountsforcomputers (18%) 

o   Bestdiscountingfor toys (20%) and furniture (10%) willfall onSunday, Nov. 29,the day before Cyber Monday 

o   Sporting goods willofferthe best deals onDec. 13 (27%) withelectronics onDec. 18 (19%) 

o   Dec. 26will seethebestpriceson tools and home improvement items (12%) 

• Affordable and free shipping optionswill bein high demand:  

o   64%of consumers say they’re not goingtopay for expedited shipping this year, signaling to retailers that free shipping cut-off datesneed to be communicatedearly. 

o   Retailers will offer the cheapest shipping options ontheday after Cyber Monday. 

o   Inlieuof friend and familygatheringsthis year,Americans are expected tospend18%moreongifts directlydeliveredfrom the retailer to people theymightotherwise see in-person

• Curbsidepickupevolves, remains popular option amidin-store shoppingconcerns: BOPIS (buy online, pick up in store), now including curbside pick-up,willhaveover 40%more ordersvs.2019.As people panic buy the week leading up to Christmas, BOPIS is expected to top 50 percent ofallorders at retailers that offer BOPIS. 
• Some positive news for small retailers: 

o   Smallretailers ($10M-$50M annual online revenue) will see a larger boost to their revenue (107%increase),vs. only 84%increasefor large retailers(annual online revenue of over $1B).  

o   However,large retailerswillcontinue to dominate withonline sales growing55%YoYversus 8% for small retailers. 

o   51%of consumers plan to support small and local retailers on Small Business Saturday; 38% plan to shop at smaller retailersthroughout the season. 

• Uncertainty around spending during theelection:26% of consumers say 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,andonline sales dropped by 6%the day after the 2018 mid-term election. 

 Methodology 

Adobe leverages Adobe Sensei, Adobe’s AI and machine learning framework, to identify retail insights from trillions of data points that flow through Adobe Analytics and Adobe Commerce Cloud, both part of Adobe Experience Cloud. Adobe Analytics analyzes one trillion visits to U.S. retail sites,100million SKUsand 80 of the 100 largest retailers in the U.S.– more than any other technology company. 

 Only Adobe’s analysis spans large, medium and small retailers across over 50 merchandise categories, powered by Adobe Analytics and Adobe Commerce Cloud, part of Adobe Experience Cloud, to provide the industry’s most accurate view of online shopping in the U.S.Companion research is based on a survey of over 1,000 U.S. consumers in October 2020.