Discounts could account for $2 billion to $3 billion in incremental online sales growth during the 2024 holiday shopping season, according to a new forecast from Adobe Analytics.
Adobe defines the holiday shopping season as Nov. 1 through Dec. 31.
“Prior to the holiday season, months of persistent inflation had led shoppers to embrace cheaper goods across major ecommerce categories,” Adobe said.
Adobe conducted an analysis from April 2019 to August 2024 of product pricing as it relates to sales, separating prices into four quartiles from highest to lowest prices. It found that the share of units sold from the quartile of products with the lowest prices increased 46% across categories. Conversely, the share of units sold among the most expensive products decreased 47% in the same period.
However, Adobe expects that trend to reverse for the 2024 holiday shopping season. In its forecast, Adobe sees the share of units sold in the most expensive category of products to increase 19% compared to pre-holiday season trends. And it expects discounts to drive that trend reversal.
Adobe’s analysis is based on 100 million stock keeping units (SKUs) across 18 product categories. 200 online retailers in the Top 1000 use Adobe Analytics for their web analytics, and 97 use it for site design and development. Top 1000 online retailers also use it for content delivery and management, as an ecommerce platform, a marketing platform, for personalization and more. The Top 1000 is Digital Commerce 360’s database of North America’s largest online retailers based on web sales.
Extent of holiday season discounts in 2024
Adobe anticipates discounts of up to 30% off listed prices in the 2024 holiday shopping season “as retailers compete for consumer dollars,” it said.
And on top of that, Adobe forecasts that buy now, pay later (BNPL) will account for $18.5 billion in ecommerce spending. That would be 11.4% year-over-year growth. In November, specifically, Adobe expects BNPL to hit $9.5 billion. That would make it the largest month on record for the payment option. As far as single days go, Adobe expects BNPL to drive $993 million in ecommerce sales. And about three-quarters of that (74% to 79%) is expected to come from mobile devices.
Adobe also anticipates record-high discounts for televisions (24% off, compared to 23% last year) and sporting goods (20% off this year vs. 18% last year).
Also in the sporting goods category, Adobe Analytics projects that the sales share of the most expensive products will increase 76%. For electronics and appliances, it projects 58% and 40% increases, respectively. Meanwhile, it projects a 3% increase in sales share of the most expensive goods for both apparel and toys.
Elsewhere, it projects sales share will drop for the most expensive products in the furniture/bedding and grocery categories. For furniture and bedding, Adobe projects that share to decrease 12%. For groceries, it projects a 3% drop “as consumers embrace lower-priced products.”
Adobe Analytics forecasts the best times to shop
Based on Adobe Analytics data, retailers will offer their deepest discounts during the Cyber 5 period, also called Cyber Week. That’s the five-day period from Thanksgiving through Cyber Monday.
Even within that time frame, Adobe Analytics projects certain days will be better than others for some categories’ prices. For example, it expects Thanksgiving Day 2024 (Nov. 28 this year) to be the best to shop online for toys, appliances, furniture and sporting goods.
Black Friday 2024 (Nov. 28) will have the biggest discounts for televisions, Adobe said. That Saturday (Nov. 30) will be the best for computers. Although it didn’t identify that Sunday (Dec. 1) as offering the best prices for any products or categories, it said Cyber Monday 2024 (Dec. 2) will be the best day to shop for electronics and apparel. Adobe also said those two categories are the largest in ecommerce by revenue share.
Adobe also said it’s notable that consumers will see holiday shopping deals beginning in October with Amazon.com’s fall Prime Day event. And Adobe expects discounts to continue after the Cyber 5, through the month of December.
Categories driving the most ecommerce growth in the 2024 holiday season
Adobe Analytics forecasts three categories driving more than half of ecommerce spending in the 2024 holiday shopping season.
- Electronics. Adobe forecasts $55.1 billion in category sales. That would be 8.5% year-over-year growth.
- Apparel. Adobe forecasts $43.9 billion in sales, which would be 5.8% year-over-year growth.
- Furniture and bedding. Adobe forecasts $28.4 billion, a 4.2% year-over-year increase.
Additionally, Adobe said it expects online grocery sales to reach $20.8 billion. That would be an 8.8% increase year over year.
Other categories Adobe forecasts growth for include:
- Cosmetics ($10.3 billion, up 7.3% year over year)
- Toys ($8.1 billion, up 5.8%)
- Sporting goods ($7.2 billion, up 5.5%)
Generative AI factors into 2024 holiday shopping
Traffic to online retail sites from generative AI tools such as chatbots has doubled through Aug. 31 this year, according to Adobe data.
As a result, Adobe Analytics expects generative AI tool use to increase in the 2024 holiday shopping season. An Adobe survey of 5,000 U.S. consumers found that seven in 10 consumers who have used generative AI for shopping said it enhances their experience. Two in five consumers who have used generative AI for shopping said they plan to use it during the 2024 holiday season.
Additionally, 20% of respondents said they turn to generative AI to find the best deals.
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