Online Holiday Spending in the U.S. Set to Rise Amid Economic Uncertainty
As the holiday season approaches, online spending in the United States is projected to increase by 5.3% year-over-year, reaching an estimated $253.4 billion. This forecast, released by Adobe Analytics, highlights a growing trend among consumers who are eager to take advantage of discounts and utilize advanced technologies like artificial intelligence (AI) chatbots to enhance their shopping experience.
Slower Growth Compared to Previous Years
While the anticipated growth is positive, it falls short of last year’s impressive 8.7% increase during the same period, which spanned from November 1 to December 31. Adobe’s analysis is based on extensive data, tracking over 1 trillion visits to U.S. retail websites, 100 million unique items, and 18 different product categories. Historically, the average annual growth rate for online holiday spending has hovered around 13%, a figure that was significantly influenced by a remarkable 32% surge in 2020, when consumers turned to online shopping as a primary means of purchasing goods during the COVID-19 pandemic.
Consumer Sentiment and Spending Habits
Despite the slower growth forecast, consumer enthusiasm for the holiday season remains robust. Vivek Pandya, Adobe’s director of digital insights, noted that the desire to celebrate with decorations and gifts is driving spending, even amid economic uncertainties. “The holiday season is one of the areas where they do feel much more of an onus and a drive to get the goods they need,” Pandya explained. He emphasized that consumers are increasingly inclined to stockpile goods in anticipation of potential price fluctuations, which may help stabilize overall spending.
However, it is essential to recognize that higher online spending does not necessarily equate to an increase in total holiday sales. Adobe’s data focuses solely on e-commerce, estimating that approximately one in four dollars spent during the holiday season will be allocated to online purchases.
Broader Retail Landscape
The overall retail environment in the U.S. has shown resilience this year, but challenges such as rising prices due to tariffs and declining consumer confidence have complicated the outlook for the holiday shopping season. According to projections from Bain & Company, total holiday spending-encompassing both in-store and online purchases-is expected to grow by only 4% year-over-year. This figure represents a decline from the 10-year average growth rate of 5.2%.
A survey conducted by PwC, which included a representative sample of 4,000 U.S. consumers, revealed that individuals plan to spend approximately 5% less on holiday gifts, travel, and entertainment compared to the previous year. Notably, members of Generation Z indicated they intend to spend 23% less than they did during the last holiday season, reflecting a shift in spending priorities among younger consumers.
Key Shopping Periods and Trends
Adobe anticipates that the peak of holiday spending will occur during Cyber Week, which spans from Thanksgiving through Cyber Monday. This five-day period is projected to account for 17.2% of total online holiday spending, amounting to approximately $43.7 billion. This figure aligns closely with the 17% share that Cyber Week represented in the previous year’s holiday season.
Discounting trends are expected to remain consistent with last year’s levels, although some categories may experience slightly weaker discounts. For instance, discounts on electronics are predicted to peak at 28% off the listed price, compared to 30.1% in the previous year. Similarly, discounts on toys are expected to reach 27%, down from 28% last holiday season.
The Rise of Mobile Shopping and AI Integration
Mobile devices are set to play a pivotal role in online shopping this holiday season. Adobe forecasts that mobile shopping will account for 56.1% of online spending, a significant increase from the 40% share observed during the 2020 holiday season. This shift underscores the growing importance of mobile technology in shaping consumer behavior.
As shoppers search for gifts, many are expected to turn to generative AI-powered chat services and browsers for assistance. Adobe predicts a staggering 520% increase in AI traffic year-over-year, with the busiest shopping days anticipated in the lead-up to Thanksgiving. This trend reflects a broader movement toward integrating technology into the shopping experience, allowing consumers to make more informed purchasing decisions.
Conclusion
As the holiday season approaches, the landscape of online spending in the U.S. is evolving. While growth rates may be slower than in previous years, consumer enthusiasm remains strong, driven by a desire to celebrate and take advantage of discounts. The integration of mobile technology and AI into the shopping experience is reshaping how consumers approach their holiday purchases. As retailers prepare for the critical shopping season, understanding these trends will be essential for navigating the complexities of the current economic environment.
