Online Holiday Spend Hit $295B Amid Out-of-Stocks, Inflation: Adobe

Consumers spent $204.5 billion online Nov. 1-Dec. 31, an 8.5% bump from 2020, amid inflation and billions of out-of-stock messages, said Adobe in its final 2021 e-commerce holiday sales season report Wednesday. December’s price increases marked the 19th consecutive month of year-on-year online inflation, following the record high of November 2021, when online prices increased 3.5% from November 2020, it said.

Congested ports, cargo delays and disruptions in overseas manufacturing led to product shortages against strong demand, Adobe said. Consumers saw over 6 billion out-of-stock messages online, a 253% spike over the 2019 holiday season and 10% from 2020, Adobe said. Data covers over a trillion visits to U.S. retail sites, 100 million SKUs and 18 product categories.

Spending continued despite rising prices: Online prices rose 3.1% year on year in December, 0.8% from November. Electronics prices in December were down 2.6% year on year and up 0.4% from November, Adobe said. In November, prices for electronics decreased just 0.4% from 2020 “and nearly moved into inflationary territory” for the first time since Adobe began tracking pricing trends in 2014, it said. Discounts for the season were weaker across major categories tracked by Adobe with electronics discounts at minus 8% vs. minus 21% in the prior year; computers were discounted 10% vs. minus 22% a year ago, it said. Categories with larger discounts were apparel (13%) and toys (19%).

The five-day Cyber Week period beginning with Thanksgiving had a spending drop of 1.4% year on year. Shoppers spread their purchasing outside of traditional high-profile deal days, for the “first time where big promotional moments like Cyber Monday and Black Friday took on less of the spotlight,” said Taylor Schreiner, Adobe Digital Insights senior director. Since the beginning of the COVID-19 pandemic, e-commerce has become “a ubiquitous daily activity and a flexible way for shoppers to navigate product availability and higher prices,” he noted.

The two-month stretch had 38 days that topped $3 billion in spending vs. 25 the prior year, said the report, based on Adobe data that analyzes direct consumer transactions online. Though consumers began shopping for the holidays as early as October, e-commerce spending was spread out, with Nov. 30-Dec. 31 growing 5.6% vs. the 2020 period, it said.

Toys led category growth with 5.4 times more online sales vs. preseason levels in September, said the analytics firm. Videogames had 4.5 times more online spending, electronics 2.2 times more and gift cards 3.6 times more, it said. Top electronics sellers for the season were the Nintendo Switch OLED, PlayStation 5 and Xbox Series S/X consoles; AirPods; drones; record players; and Samsung and LG TVs, Adobe said.

Consumers embraced buy now, pay later options, Adobe said, spending an average $224 for three items using the method. Revenue was up 27% year on year using BNPL; orders grew 10%. Growth has slowed, though, “signaling challenges for gaining mass adoption,” Adobe said.

Curbside and in-store pickup were used in 23% of all online orders during the holiday season, Adobe said. Though use of the fulfillment option isn’t growing -- it was used in 24% of purchases in 2020 -- demand for curbside services “remains durable” as a convenient and safe option, said the analytics firm. On average, curbside orders amounted to $91 for about two items in the shopping cart; usage peaked on Christmas Eve at 40% of orders, it said.

Some 43% of online sales came via smartphones during the holiday season, generating $88 billion. That’s a modest increase from 40% in 2020, as consumers still rely on desktop and laptop computers as the primary way to shop online, Adobe said. More than half of e-commerce sales took place on smartphones on six days: Thanksgiving, Super Saturday, Dec. 19, Christmas Eve, Christmas Day and the day after Christmas.