CE Cuts to Hit Record Highs Nov-Dec, Driving $50M Online Spend: Adobe

Discounts will hit record highs for electronics, computers and toys this holiday sales season, Adobe said Monday in its 2022 online holiday shopping forecast. The analytics firm expects electronics to drive $49.8 billion of online spending, up 2.9% year on year: “Heavy discounts will impact margins and spending but attract enough shoppers to maintain growth.”

Overall, October retail promotions will pull in sales from the Nov. 1-Dec. 31 season, said Adobe, projecting a 2.5% year-on-year season rise to $209.7 billion vs. the 8.6% increase in 2021 to $204.5 billion. Adobe cited Amazon’s Early Access sales event for Prime members that kicked off Tuesday, running through Wednesday, plus other early discounts. Target positioned its October Deal Days, which began Monday, as a Black Friday event, with “major savings continuing all season long.” Best Buy is offering Black Friday deals this week "before the main event in November."

“The shape of the holiday season will look different this year, with early discounting in October pulling up spend that would have occurred around Cyber Week,” said analyst Patrick Brown. Consumers have already dropped over $590 billion online [through August] this year for 8.9% growth, “highlighting the resiliency of e-commerce demand,” he said.

Discounts for computers are expected to be as high as 32%, up from 10% in 2021 when inventory was challenged due to supply chain disruption. Electronics discounts are predicted to hit 27%, up from 8%, and TVs at 19% vs. 11% last year. Appliances are expected to be discounted 18% vs. just 4% last year, it said. The biggest discounts are projected to hit between Thanksgiving and Cyber Monday, with Thanksgiving the best day to shop for electronics, Adobe said. The best day to shop for TVs will be Black Friday; and the best computer deals will hit on Cyber Monday, it said.

Consumers will spend earlier for the holidays this year, Adobe said, saying October discounts will “entice some consumers to start their shopping sooner, impacting Cyber Week performance." Discounts this week are expected to be as high as 15%; after Cyber Monday, deals will reach 20% off, Adobe said. Different promotional events will give flexibility to consumers who need to manage budgets differently this year, Adobe said. The holiday season will be affected by an uncertain economic environment, as shoppers contend with higher food, gas and housing prices, plus the rising cost of borrowing.

Cyber Monday is expected to remain the year’s biggest shopping day, Adobe said, projecting a record $11.2 billion in spending, a 5.1% increase; Black Friday volume is seen growing by just 1% to $9 billion. Adobe forecasts Thanksgiving Day e-commerce sales will slip 1% to $5.1 billion.

The traditional major holiday shopping days are “losing prominence as e-commerce becomes a more ubiquitous daily activity, and as consumers see discounts continuing throughout the full season,” Adobe said. It forecasts a 2.8% increase in sales Thanksgiving Day-Cyber Monday to $34.8 billion, with Cyber Week’s share of holiday season sales shrinking from 16.6% to 16.3%.

Buy now, pay later (BNPL) had significant traction last year, growing 32% year on year, but usage of that payment method is expected to slow this holiday season, after its online revenue share grew only 5% year on year from January to September. In addition to the slowdown in consumer spending amid inflation, BNPL “is also contending with challenges in demonstrating value to mass consumers,” Adobe said.

A quarter of online orders used curbside pickup in December as customers looked for “faster and safer” ways to shop, said Adobe. The fulfillment option is expected to remain popular this season, too, at 25% of orders, peaking Dec. 22-Dec. 23 at 35% of all e-commerce orders, it said. An Adobe survey of 1,000 consumers said 35% plan to use curbside pickup this season.

Adobe predicts the most popular electronics gifts this holiday season will be Apple Watch Series 8 and Ultra, the latest AirPods, Nintendo Switch OLED, PlayStation 5 and Xbox Series X. Adobe’s analysis covers over 1 trillion visits to U.S. retail sites, 100 million SKUs and 18 product categories.