Unboxing 2020's Holiday Shopping Forecast - Adobe Digital Insights
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Unboxing 2020's Holiday Shopping Forecast Adobe Digital Insights
Methodology
• Analysis of more than 1 trillion visits to U.S. based retail websites.
• Product and pricing insights based on analysis of sales of more than 100 million unique products.
• Adobe Analytics measures transactions at 80 of the top 100* U.S. online retailers — more than
any other technology company.
• Shipping and returns analysis based on millions of orders in 2019, email analysis using more than 29B emails sent
in 2019.
• Companion research based on a survey of 1,000+ U.S. consumers (18+ years) in Oct 2020.
*Per Internet Retailer 2018 eGuide
©2020 Adobe. All Rights Reserved. Adobe Confidential.
Key findings
COVID-19 + holiday spending will drive record gains for e-commerce David vs. Goliath vs. COVID
• Online holiday season spend could reach as much as $189 billion dollars at 33% YoY • Large retailers ($1 billion+) are expected to
growth. initiate deals earlier and continue to grow their share of
• COVID-informed online demand remains elevated and will ensure record-shattering Black total holiday spend over small retailers ($10-50 million).
Friday & Cyber Monday sales days, while propelling shopping growth in early November. • However, the holiday season continues to be important
Black Friday is expected to reach $10 billion! for smaller retailers — they are able to drive higher
• To mitigate shipping, inventory, and logistical challenges, retailers will begin discounting sales boosts from the holiday season relative to the rest
in early November, in order to spur earlier purchasing and demand. of the year.
• The smaller retailers have also been more effective in
The new shopping playbook for the COVID era driving traffic from new customers.
• Normally, holidays bring a sudden jolt to e-commerce websites. This year, going into the
holidays, online retailers are seeing shopping on steroids. Top gifts for an unprecedented holiday
• On smartphones, buying intent, and the number of products in them are already running • New game consoles and related accessories are
hotter than last holiday season, breaking all historical patterns. expected to top gift lists, along with perennial favorites.
A shipping season unlike any other
• Online commerce and shipping behaviors are already at holiday levels before
Smartphones to reach new heights despite
even entering the season. in-home shopping
• BOPIS (buy online, pickup in store) growth is expected to explode over the holiday • Consumers will do 42% of their shopping from
season, as consumers look to acquire items without shipping costs and fast delivery. smartphones this holiday season.
©2020 Adobe. All Rights Reserved. Adobe Confidential.
Online Retail Spend Predictions An unprecedented year will lead to an uncertain holiday season.
E-commerce holiday season likely to see two years’ worth of growth,
reaching $189B, +33% YoY
• The online holiday season is forecast to break all
its past growth records and grow 33% YoY to
$189B.*
• The uncertainty that 2020 has brought to the
economy and the challenges around social
distancing at physical stores make this holiday
season unique.
• Since last holiday season e-commerce has seen
growth of over 120% on some days, while hitting
lows of 25% on others.**
Unchanged physical stores | Unchanged disposable income
*This forecast depends on the continuation of the current trend into the season.
** The highest growth day was May 9 at +128% YoY
©2020 Adobe. All Rights Reserved. Adobe Confidential.
There’s potential for over $200B, at +47% YoY, or “just” $171B, at +20%
• The two factors that had the biggest impact on the
spike of e-commerce activity in May were the
shutdowns of physical stores and the spike in
consumer disposable income due to the stimulus
check and extra unemployment benefits.
• If flu season brings with it a spike in cases and an
increase in store restrictions, a reduced store capacity
will drive more people online.
• E-commerce is still only around one out of every $4
spent on retail. That’s a large bucket of dollars that
could move online, leading to potential for big swings
this season.
Available physical stores Limited physical stores
Low disposable income High disposable income
©2020 Adobe. All Rights Reserved. Adobe Confidential.
Retailers vs. habit: Is 2020 the year when retailers manage to create Cyber Month?
• For the past couple of years, retailers have
been trying to move sales up earlier in the
season, encountering some resistance from
consumers — although last year the seven
days before Thanksgiving grew by 28% YoY.
• The “golden hours” of retail are the biggest
manifestation of consumer propensity to
delay their shopping. The last four hours of
Cyber Monday draw more revenue than an
average day.
• This year, with the shipping infrastructure
already running hot, retailers have extra
incentive to spread out the demand and
decrease the delays in shipments.
©2020 Adobe. All Rights Reserved. Adobe Confidential.
Black Friday expected to reach the $10B mark this year
• This year’s Black Friday won’t have as
much “door-busting” as per usual.
Retailers are pushing deals up and
promising Black Friday deals to last for
“all of November and December.”
• However, many consumers have more
than a decade of experience and a habit
of going to the local mall to hunt for
deals on the day after Thanksgiving.
• Store capacity limits will create big lines
and turn many consumers away at the
door, pulling them online. This large
amount of spend that’s typically made
offline could add enough spend to the
digital version of Black Friday to surpass
Cyber Monday.
©2020 Adobe. All Rights Reserved. Adobe Confidential.
Pandemic Shopping Playbook Shop early for the best discounts and delivery peace of mind.
BOPIS gives procrastinators options, not without potential frustration
• BOPIS was the top fulfillment method in the days leading up to
Christmas 2019 (Dec 21 – 23), at nearly 40% of orders at
retailers that offer BOPIS. We expect that to top 50% this year.
• As people scrambled to get last minute gifts last year,
December 22 saw almost double the typical share of expedited
orders, at 6%.
• Early this year we saw BOPIS usage surge in response to the
pandemic from 15% of orders to 25% (65% share increase) —
expect to see long lines for picking up orders during holiday
shopping.
• Don’t count on expedited shipping to help avoid the BOPIS
lines this year — fewer retailers have offered expedited
shipping so far this year as they scrambled to keep up with the
influx of orders in March and April, and consequently the
expedited share dropped to 1%.
• 52% of shoppers prefer one-day shipping for last-minute
purchases, while 37% choose in-store pickup.
©2020 Adobe. All Rights Reserved. Adobe Confidential.Be on the lookout for free shipping being a key differentiator
• Based on Adobe's Magento Commerce data, holiday shipping cost
historically decreases by 9.2% overall compared to the rest of the year.
• Much of that discount comes from free shipping, which might be harder to
come by this year — excluding free shipping orders, shipping cost increases
by 1.7%.
• The “spend x to get free shipping” threshold drops by 4.1% overall during the
holiday season, with the day after Cyber Monday threshold clocking in at
almost 50% lower than the rest of the holiday season.
• Based on previous years trends (before COVID-19), December 11 (two Fridays
before Christmas) would be the last day for cheaper shipping, with shipping
cost peaking from there at 14.6% higher than the rest of the holiday season.
Expect that to be pushed earlier this year!
©2020 Adobe. All Rights Reserved. Adobe Confidential.Rushed last minute shopping means well but doesn’t always pan out
• Our survey indicates 15% of gift receivers returned more than a quarter of their
gifts last season.
• Orders placed the day before Thanksgiving are 51% more likely to be returned
than orders placed on Thanksgiving. It's likely that the items are being returned,
in hopes of acquiring cheaper sales items, over the following sales days
• The most likely items to be returned are from orders purchased on December
23 — either the gift is unwanted or doesn’t show up on time. These orders are
52% more likely to be returned.*
• With discounts being pushed earlier this season, and potential shipping delays,
make sure you’re planning on doing your holiday shopping early!
*Compared to the rest of Nov and Dec
©2020 Adobe. All Rights Reserved. Adobe Confidential.Early discounting to escalate through November
• Significant holiday discounting will be initiated within the first two weeks of November and will build to
the deepest category price drops over Black Friday through Cyber Week, and into December.
• 49% of consumers believe they will get the best prices online on Black Friday and Cyber Monday.
• Below are the dates expected to drive the best possible discounts, for their respective categories:
©2020 Adobe. All Rights Reserved. Adobe Confidential.Adobe’s holiday toy watch list
• Rainbocorns • PlayStation 5
• Cutetitos • Xbox Series X
• Little Live Pets • Nintendo Switch
• Star Wars Toys • Cyberpunk 2077
• Lego Sets • Call of Duty: Black Ops Cold War
• Hatchimals Pixies • Spider-Man: Miles Morales
• L.O.L. Surprise! • Mario Kart Live Home Circuit
• Beyblade • Super Mario 3D All-Stars
• Kindi Kids
©2020 Adobe. All Rights Reserved. Adobe Confidential.Flexible payment purchasing expected to rise over holiday season
• The District of Columbia, California,
Maryland, New York, Delaware, Georgia,
and New Jersey are the highest utilizers
of interest-free payment installment
options, when purchasing, according to
Klarna.*
*The statistics come from Klarna's database of transactions made with retailers offering Klarna as well as through the app (from Jan 1 – Sept 30, 2020), which enables consumers to shop with Klarna at any online
store. The map shows a representative indexed average per state per capita compared to the national average US consumer.
Klarna leverages transaction data from its own systems to identify trends and insights to shopping behavior across 9 million consumers, 1.7 million monthly active app users, and more than 4,300 retail partners in the U.S.
©2020 Adobe. All Rights Reserved. Adobe Confidential.Retailer Playbook Deliver the best online shopping experience for the largest online crowd yet.
Use free shipping as a tool to drive sales earlier in the season
• Consumers have come to expect free shipping during Nov and Dec
— the share of free shipping orders increases by 8.6% during the
holiday season.*
• Over 70% of orders on Black Friday weekend have had free
shipping, peaking on Sunday at almost 73%.
• 64% of respondents won’t pay for faster or expedited shipping this
year — retailers need to communicate earlier free shipping cutoff
dates to capture purchases earlier.
• According to our survey research, consumers have a strong affinity
for free shipping, with 75% of them claiming that it's an important
factor in their desire to buy online. By offering free shipping and
communicating cutoff dates, retailers have an opportunity to drive
sales earlier in the season, helping mitigate shipping issues.
*Comparing daily sales in Nov - Dec vs. Jan – Oct
©2020 Adobe. All Rights Reserved. Adobe Confidential.BOPIS gives retailers with a physical presence an edge
• Retailers who offer BOPIS will have an advantage this
year as shoppers try to avoid crowds and paying high
shipping costs.
• On big days during holiday shopping, people are 9%
more likely to purchase with a retailer who offers
BOPIS. In March and April, that jumped to 30%.
• Already this year we’ve seen BOPIS growth skyrocket
in April and May to over 120% YoY. Last holiday season,
BOPIS order growth reached 22%. We expect growth
this holiday to reach over 40% YoY.
• The main reason 19% of consumers choose BOPIS this
year is because it’s safer than buying in store — in
2019, that number was only 4%.
• 71% of consumers expect to shop for more items while
picking up an item with BOPIS, down from 82% in
2019.
©2020 Adobe. All Rights Reserved. Adobe Confidential.A visit will be much more valuable, an order not so much
• The value of a visit is predicted to grow at
an unprecedented rate.
• Consumers aren't wasting time —
they're visiting 18% fewer pages per
order and spending 17% less time per
order.
• However, an order won’t be bigger or
more valuable this year.
• The order value being flat brings
challenges to the profitability and
shipping logistics. There will be an
increase in packages this holiday season
that will follow directly the increase in
spend.
©2020 Adobe. All Rights Reserved. Adobe Confidential.Smartphones taking over online shopping despite increase in work from
home
• With the decrease in time spent
commuting combined with continued
usage of computers while working from
home, some thought the advance of
smartphones as preferred shopping
device would stall.
• However, smartphone shopping growth
has continued at an accelerated rate.
• We predict that consumers will do 42%
of their shopping from smartphones this
holiday season.
• $28B more will be spent on smartphones
this year.
©2020 Adobe. All Rights Reserved. Adobe Confidential.Shoppers will be reliant on retailers delivering a good gift experience
• As fewer people are traveling to be with family this
year, expect an increase in gifts being shipped
directly from the retailer. Gift wrapping and gift
guides will shape the shopping experience.
• Shoppers typically send 18% more gifts to other
people's addresses during the holiday season,
peaking at 67% more on December 17 (the Tuesday
of the week before Christmas).
• The Saturday of Thanksgiving weekend is when
consumers are shopping for themselves, with gift
purchases 22% under the average.
increase in holiday gifts shipped
©2020 Adobe. All Rights Reserved. Adobe Confidential.Search engines will be more important than ever during Holiday 2020
• Search will drive a 9% higher share of
purchases this holiday season, almost
reaching the 50% mark at 46.5% of total
online shopping revenue.
• In the high-intent e-commerce
environment, it’s natural that organic
search is set to see the biggest increase in
shopping driven at +12% YoY.
• Email is the channel taking the biggest hit
this season, with an 8% decrease in share.
• Social networks are notorious at driving
mostly awareness instead of direct
purchases. While growing 14% over last
year, it’ll barely surpass 3% of purchases
this season.
©2020 Adobe. All Rights Reserved. Adobe Confidential.New customers will be the defining segment this holiday season
• According to our survey, 31% of the consumers who shopped
online in April were consumers who “rarely” shopped online.
Nine percent were net new.
• In May of this year, Adobe Analytics data showed that new
customers doubled the growth in revenue for e-commerce
retailers.
• Labor Day and Memorial Day both showed new customers
lifting revenue 50% more than the loyal segment.
• With the first six months attracting new customers online
and holidays being overrepresented by the occasional online
shoppers, we fully expect this holiday season to be
dominated by the new and inexperienced online shoppers.
• The biggest downside to new shoppers is that they generally
tend to make smaller orders.
©2020 Adobe. All Rights Reserved. Adobe Confidential.David & Goliath vs. COVID For retailers, winning and losing in the COVID era is a question of both strategy and sheer size.
COVID is changing growth for small vs. large retailers
• Small businesses ($10M – $50M in yearly revenue)
see a larger boost to their revenue during the holidays
(Nov – Dec) than large ($1B+) retailers — small
retailers increase revenue by 107% while the large
retailers see an 84% revenue boost.*
• COVID-19 has been a boost to small businesses so far
this year, with small retailers seeing 95%
revenue boost since the announcement of the
national state of emergency — large retailers have
only seen a 52% boost.** Comparing the same time
period YoY, small businesses have experienced 56%
growth while large retailers had 50% growth.
• Large retailers continue to grow their holiday share,
however, with holiday season YoY revenue growth for
large retailers hitting 55%, and small retailers seeing
only 8% growth.
*Comparing daily sales in Nov – Dec vs. Oct
**Comparing Mar 15 – Sep 30 vs. Jan 1 – Mar 14
©2020 Adobe. All Rights Reserved. Adobe Confidential.Large retailers drive sales earlier during holiday
• The boost difference for big days is most pronounced on
Thanksgiving, with large retailers having more than twice
as much of a boost* on that day than small retailers,
indicating they are pushing the deals earlier and capturing
more of the sales. This will be even more pronounced as
retailers work to drive sales earlier to avoid shipping
delays.
• The big day boost difference is smallest on Small Business
Saturday, indicating this dedicated day during the holiday
season is gaining traction among small retailers and
consumers. The boost difference shrunk by 6 percentage
points from 2018 to 2019, and we expect that trend to
continue.
• 51% of survey respondents plan to support small and
local retailers on Small Business Saturday, and 38% plan
to make a deliberate effort to shop at smaller retailers
throughout the holiday season.
*Comparing daily sales in Nov – Dec vs. Oct
©2020 Adobe. All Rights Reserved. Adobe Confidential.Good news for small businesses with new customer growth
• New customers are incredibly important for both small and
large businesses, with new customers making up 30% more
of the share of total revenue for small businesses than for
large businesses on average.
• Growth in the new customers drives small businesses as
well, with holiday new customer revenue experiencing 22%
growth for small businesses. Large businesses only see 2%
growth from that group.
• Since April, new customer revenue has grown by 65% for
small businesses vs. 49% for large businesses, highlighting
the need to continue to attract new customers.
• Small businesses see a much broader average order value
spread though, with loyal customers coming in highest at
$166 vs. new customers at $95. For large companies, that
spread is loyal at $141 and new at $138.
©2020 Adobe. All Rights Reserved. Adobe Confidential.Election Hangover The presidential election outcome is expected to have an impact on e-commerce.
Election impact
Online sales will be impacted over the election as Americans await clarity
• Day after election predictions:
13% drop in sales the day after election vs. the previous three days expected
Spending 11% slower than the other days of the week
Look back: 14% slower growth day after 2016 election and 6% slower the day after the
2018 election
o $158M reduction in spend vs. expected sales in 2016
• Election week (11/1 – 11/7) will see a total of $16.3 billion in online retail spend
• 26% consumers say knowing the election outcome will impact their holiday spend*
• 63% of retailers believe consumers will be more confident in spending after
the presidential election*
*According to survey
©2020 Adobe. All Rights Reserved. Adobe Confidential.Regional Differences COVID, weather, unemployment, and a host of other factors have impacted different parts of the U.S. differently.
The Northeast is rushing to e-commerce this holiday season
• Rhode Island’s share of U.S. e-commerce
sales is going to increase by +28% this
holiday season.
• Michigan, Connecticut, Massachusetts,
Vermont, and Maine aren’t far behind —
their shares will see more than a 10%
increase.
• The Northeast is gaining more share, despite
already having the highest rate of online
shopping per capita in the nation.
©2020 Adobe. All Rights Reserved. Adobe Confidential.Creative Cloud Insights Shopping changes necessitate changes in shopping imagery.
Shopping imagery has shifted as creatives promote online shopping
As we move into a holiday shopping
season that we have not experienced
before, we are seeing a shift in
“shopping” imagery.
Most licensed “shopping” images Oct. 2019
This year “shopping” imagery takes us
away from the crowds and puts us in
the comfort of our home.
Most licensed “shopping” images Oct. 2020
©2020 Adobe. All Rights Reserved. Adobe Confidential.Holiday Travel Travelers have mixed feelings about traveling home for the holidays this year.
Spending time with family during holidays draws travelers
• Domestic flight bookings for the holiday season (Nov –
Dec) are down 70% YoY. More people are planning on
traveling for Christmas than Thanksgiving, with
Christmas down only 62% and Thanksgiving bookings
down 67%.
• Travelers in the Midwest continue to be the most willing
to travel, especially for Christmas — flights originating in
the Midwest for Christmas are only down 56% YoY.
• Hotel bookings for all of November and December are
only down 51% YoY. Thanksgiving is down 60%, and
Christmas is down 50%.
• Our survey indicates 8% of people are planning to travel
to celebrate Thanksgiving, and 11% are planning to travel
for Christmas.
• Domestic flight prices are climbing from their initial
slump but are still in the traveler’s favor, at –19%
cumulative deflation in September (since Jan 2018).
©2020 Adobe. All Rights Reserved. Adobe Confidential.With all the uncertainty, holiday travel has potential to grow
• According to our survey, 8% of people haven’t decided
what their holiday plans are yet.
• Travelers continue to book flights fewer days in advance,
(20 days on average right now, vs. 25 last year), showing
there is still room for more flight growth.
• Hotels are booked more last minute than flights, with
41% of bookings expected to happen in the week leading
up to the stay. 14% of flights are booked in the week
prior, so a lot of ground is yet to be gained.
• December 27, 2019, saw 2.3x as many hotel bookings as
the average daily bookings in November and December.
• 27% of people will only be celebrating Christmas and
Thanksgiving with their household or will have a virtual
guest.
©2020 Adobe. All Rights Reserved. Adobe Confidential.An uncertain year won’t stop Halloween
Strong search growth for Halloween and Thanksgiving assets is showing early on in October, while Halloween is seeing
a slightly larger share of asset licenses over 2019.
©2020 Adobe. All Rights Reserved. Adobe Confidential.You can also read
