The Covid-19 pandemic and inflation can't keep consumers from spending a lot this holiday season.
Holiday e-commerce sales are projected to reach a record $207 billion in the U.S. between November and December, a 10 percent increase over 2020 sales, according to data from Adobe Analytics. Globally, holiday e-commerce sales are projected to hit $910 billion, an 11 percent year-over-year increase. Adobe surveyed more than 1,000 adults and analyzed more than one trillion visits to retail websites for the report.
Cyber Week, which lasts from Thanksgiving through Cyber Monday, is expected to reach $36 billion in online spending, a 5 percent increase year-over-year, with Cyber Monday alone making up $11.3 billion in online sales. Expected to be the biggest sales day of the year, Adobe predicts the peak hour of Cyber Monday, from 8:00-9:00 pm PT, to bring in more than $12 million every minute.
Successful fulfillment is one of the most important factors for retailers looking to capture sales, as ongoing supply-chain complications have helped cause out-of-stock messages leading up to the holiday season to rise 172 percent year-over-year, according to Adobe. Offering faster shipping options and communicating with customers on delivery times and possible delays "will not only make the retailer more appealing for shoppers but help build loyalty and repeat purchases," says Tory Brunker, director of Adobe Commerce.
Aside from wanting purchases at their doorstep on time, consumers are favoring new payment methods and AI e-commerce tools. Shoppers are using Buy Now Pay Later (BNPL), a payment method offered by startups like Klarna, Affirm and Afterpay, as a way to manage expenses amid inflation. Online revenue from BNPL has grown 10 percent year-over-year and 45 percent compared to 2019, according to Adobe. One-quarter of U.S consumers say they've used BNPL in the last three months.
Retailers' websites are a prime destination to not only showcase the products visually but also to leverage AI capabilities, Brunker says, like AI-driven product recommendations to show shoppers more of the inventory.
"Retailers should still put focus on Cyber Week given its volume while also exploring other moments in the season to promote discounts and new products," Brunker says, pointing to branded shopping holidays like Amazon's Prime Day. Promoting sales year-round, she adds, allows smaller retailers to reap the benefits of the e-commerce surge well beyond the 2021 holiday season.
