Adobe’s online shopping forecast for the 2021 holiday season — November 1 through December 31, 2021 — estimates U.S. holiday sales online will rise 10% to reach $207 billion, setting a new record, but supply chain constraints and rising prices will require marketers to shift messages.
Globally, online spending is expected to grow 11%, reaching $910 billion this season. Adobe expects more than $4 trillion will be spent globally in 2021 -- a new milestone for ecommerce, according to the Adobe Digital Economy Index.
While Adobe's data estimates a record year, surging consumer demand for online shopping and stifling supply-chain challenges -- from crowded ports and cargo delays to disruptions in overseas manufacturing -- could make it a difficult holiday season.
Brands feel the impact as much as shoppers. Bed Bath & Beyond is struggling to get inventory, the company’s CEO Mark Tritton explained in the second-quarter conference call on September 30.
“Our third quarter guidance takes into account September trends, including the supply-chain challenges we're experiencing as well as the importance of the month of November,” Gustavo Arnal, Bed Bath & Beyond CFO, said in the Q2 2021 earnings call.
Shoppers are feeling the impact. Compared to January 2020, out-of-stock messages rose 172% heading into the holiday season, according to Adobe. The data shows the percentage will increase for certain products.
Of the 18 categories tracked by Adobe, apparel has the highest out-of-stock levels today, followed by sporting goods, baby products, and electronics.
The Adobe Digital Economy Index provides a view into U.S. and global ecommerce by analyzing direct consumer transactions online.
Based on Adobe Analytics data, the analysis covers over 1 trillion visits to U.S. retail sites, 100 million SKUs, and 18 product categories, with global views based on transactions in more than 100 countries across three regions.
A weak supply chain is expected to drive up prices online. Adobe Forrester Vice President and Principal Analyst Dipanjan Chatterjee expects that products will cost more, and marketers will need to find elements other than value to make their case.
“There’s a widespread movement to jumpstart Christmas even earlier than usual in anticipation of shipping delays and logistical. Amazon, Target, and Walmart are doing this already,” Chatterjee said. “Marketing Christmas while we’re barely into Fall will require marketers to find creative ways to accelerate holiday behavior.”
Adobe expects that U.S. consumers will pay 9% more on average during Cyber Week this year, compared with the last holiday season. This is the result of smaller discounts, on top of ecommerce inflation.
Adobe forecasts that discounts will range between 5% and 25% across categories, compared with a historical average of 10% to 30%.
In past years, online prices fell 5% YoY on average prior to the shopping season. Ecommerce prices have not risen as quickly as offline prices however, with the latest Consumer Price Index up 5.4% YoY, in September 2021.
“Promotional strategies will have to be joined at the hip with inventory positions, because few things will be more frustrating to buyers than bait and switch, tempting them into stores and on to ecommerce platforms with offers that are stocked out,” Chatterjee said.