Adobe Analytics projects U.S. holiday online sales to grow at a slower 5.3% to $253.4 billion this year, down from 8.7% growth last year, reflecting macroeconomic uncertainty and pressure on consumer spending. Shoppers are expected to prioritize deeper discounts, utilize "buy now, pay later" services (projected $2 billion increase), and seek value, with Cyber Monday anticipated as the largest online shopping day. This subdued forecast, despite mixed retailer outlooks, signals continued challenges for retail margins and discretionary spending.
Oct 6 (Reuters) - U.S. holiday online sales are expected to grow at a slower pace this year, according to projections by data firm Adobe Analytics released on Monday, as macroeconomic uncertainty continues to pressure consumer spending. Adobe expects U.S. online sales to rise 5.3% to $253.4 billion between November 1 and December 31, this year, compared with an 8.7% rise last year. The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news. Sign up here. Cyber Monday, a major online shopping event that takes place on the Monday after Thanksgiving, is expected to be the biggest online shopping day of the season and year, with sales rising 6.3% to $14.2 billion on the day, Adobe said. Advertisement · Scroll to continue The holiday shopping period, a key driver of sales for retailers at the end of the year, will be even more critical this year as shifting trade policies under the Trump administration and persistent inflation take a toll on consumer spending. "You have consumers dealing with a lot in the broader economy," said Vivek Pandya, director at Adobe Digital Insights. "We anticipate them taking advantage of these major sales moments, and we still see them leaning on the online sector as an area to get better deals." Adobe Analytics expects shoppers to kick off some of their early holiday purchases during Amazon's (AMZN.O) October Big Deal Days, October 7 through October 8, and competing sales events. It forecasts $9 billion in spending between the two days, a 6.2% increase compared with last year. Advertisement · Scroll to continue Retailers have issued mixed outlooks ahead of the holiday season. Target (TGT.N) and Best Buy (BBY.N) maintained their annual forecasts, while Walmart (WMT.N) and Macy's (M.N) raised theirs. Toymaker Mattel (MAT.O), however, reduced its expectations. Adobe's forecast, which relies on direct online transactions based on more than 1 trillion visits to U.S. retail websites, echoes similar expectations of a subdued holiday season, with shoppers prioritizing essentials, hunting for deeper discounts, and cutting back on discretionary purchases. The forecast sees shopping on mobile devices driving 56.1% of total online spending compared with desktop shopping, and a $2 billion increase in "buy now pay later" spending. Buy now, pay later services let shoppers expand their purchasing power by paying for merchandise in monthly installments spread out over as many as 36 months; however, the most common payments are four-installment plans. Adobe said discounts would likely reach up to 28%, similar to last year, as shoppers not just look for the lowest price, but trade up to higher-value items in categories, including sporting goods and electronics, as they seek more value out of their dollar. Reporting by Arriana McLymore in New York City and Neil J Kanatt in Bengaluru; Editing by Jacqueline Wong Our Standards: The Thomson Reuters Trust Principles. Adobe Analytics forecasts a significant deceleration in U.S. holiday online sales growth, projecting a 5.3% increase to $253.4 billion this year, a notable drop from the 8.7% growth recorded in the previous year. This "moderately negative" outlook is primarily attributed to macroeconomic uncertainty and persistent inflation, which are pressuring overall consumer spending. Cyber Monday is still anticipated to be the largest single online shopping day, with sales projected to rise by 6.3% to $14.2 billion. Consumer behavior is shifting towards seeking deeper discounts, which are expected to reach up to 28%, similar to last year's levels. There is also an anticipated $2 billion increase in "Buy Now, Pay Later" (BNPL) spending, reflecting consumers' reliance on flexible payment options to manage budgets. Shoppers are prioritizing value, leading to a focus on higher-value items in categories like sporting goods and electronics, while overall discretionary purchases face pressure. Despite the cautious industry forecast, individual retailer outlooks are mixed; Walmart and Macy's raised their annual forecasts, while Target and Best Buy maintained theirs, and Mattel reduced its expectations. This divergence highlights varying operational strengths among retailers in a challenging economic environment. Early sales events, such as Amazon's October Big Deal Days generating $9 billion in spending, underscore the competitive landscape for capturing early market share. Technology continues to play a pivotal role, with mobile devices projected to drive 56.1% of total online spending, emphasizing the criticality of mobile-optimized retail strategies. The increased adoption of BNPL services further indicates an evolving consumer finance landscape within e-commerce, where convenience and financial flexibility are key differentiators for retailers. This indicates that innovative payment solutions and digital engagement are crucial for navigating a price-sensitive consumer base.
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