7 Insights on What a Second Pandemic Holiday Will Look Like

Who’s ready for another holiday season in a pandemic? Most Americans, it seems. That’s according to Adobe Analytics, which released its latest Digital Economy Index Wednesday morning. The report projects online sales will hit $207 billion in the U.S. during the 2021 holiday season, a 10% year-over-year increase. “That is smaller than in the past but, of course, the 2019 to 2020 growth was three years packed into one,” said Pat Brown, vp of growth marketing and insights at Adobe. “What's really interesting on the net-net of this whole thing is despite that huge compression and acceleration from ‘19 to ’20, we're accelerating on top of that going into 2021.” Tips for Standing Out in Another Unusual Holiday Shopping Season The total could be as high as $216 billion (or as low as $198 billion), depending on Covid-19 cases, shutdowns and macroeconomic factors, the report said. Here’s what else we can expect this holiday season, per Adobe: Spikes will be shorter Cyber Monday, which set a new U.S. record last year with $10.8 billion, will retain its title as America’s biggest shopping day and grow to an estimated $11.3 billion, but marquis shopping dates will lose some prominence overall. Cyber Week, which runs Thanksgiving through Cyber Monday, is projected to reach $36 billion online. That marks 5% year-over-year growth, which Adobe pointed out is less than the 10% growth rate for the overall season. (Adobe predicts Thanksgiving will be up 6% to $5.4 billion while Black Friday will be up 5% to $9.5 billion.) Brown noted these dates will “still be huge shopping days,” but “they won’t be as pronounced relative to the overall shopping season.” (Adobe defines the holiday season as Nov. 1 to Dec. 31.) We saw hints of this in 2020 with what Brown described as “less of that really spiky behavior on Thanksgiving, Black Friday and Cyber Monday.” That’s in part because of the huge overall lift from 2019 to 2020 when online sales shot up 33%. Prices will be higher The big storyline so far in 2021 is whether—and how much—supply chain bottlenecks will wreak havoc. As a result of disruptions in manufacturing, as well as cargo delays and crowded ports, Adobe found out-of-stock messaging on retailer sites is up 172% compared to January 2020. According to Adobe, this will remain throughout the season. Another outcome is higher price tags. Adobe projects consumers will pay an average of 9% more during Cyber Week thanks to a combination of slimmer discounts and inflation. Overall, markdowns will range from 5% to 25%, which is a decrease from the more traditional rate of 10% to 30%. But that’s not going to deter spend. “In general, consumer confidence is high—at least in the U.S.—so people are looking to have a great Christmas,” Brown said. “I think they're not really blinking at the higher prices.” Purchases may shift It could also prompt consumers to seek out used items—or delay purchases altogether. “It's interesting to think about the renewed-type commerce channel through Amazon," Brown said of the ecommerce giant's section of refurbished or like-new items. But consumers who are particularly loyal to a certain brand may instead opt to wait, which could create “halos or some of the other gifting push beyond the holidays," Brown said. Curbside will continue Another ripple effect of the supply chain is consumer concern about shipping delays. As a result, Adobe expects curbside pickup to peak at a high of 40% on Dec. 22 and 23. In the remainder of the season, it will mirror the December 2020 rate, which was 25%. “This will be interesting as the supply chain issues continue potentially for certain really hot products,” Brown said. “How do the retailers bring you into the store, even if it means curbside, and deliver you a unique experience to get those things that are really hot commodities?” Smartphone shopping will level off While purchases on smartphones were rising prior to the pandemic, Adobe found this behavior has “hit a ceiling” as consumers spend more time at home in front of other devices. That has slowed growth for smartphone shopping, which it projects will hit $86 billion in 2021, which is another modest 5% increase. Brown said it’s possible the smartphone trend will pick up again when consumers return to offices more frequently. As it stands now, he noted it poses questions about how brands are marketing their mobile versus desktop experiences given the relative lull in mobile. BNPL will remain popular No surprises here: Buy now pay later (BNPL), which has really taken off in 2021, will continue to shine during the holiday season. According to Adobe, online revenue from BNPL is up 10% over 2020. The report also noted shoppers are using BNPL for increasingly smaller purchases as order value has dropped 12% year over year to $225. The most popular categories in the last three months for BNPL include apparel, electronics and groceries. “People are willing to defer payment on a larger group of items, so they're putting more up to pay later … but at the same time they're willing to do it for cheaper things,” Brown said. Gifts will include big TVs and experiences In addition to perennially popular gifts, like toys, games, Airpods, Instant Pots and air fryers, Adobe expects to see an increase in big TVs as consumers “look to replicate the theater experience at home.” And while 51% of respondents said they plan to purchase physical goods, 17% said they plan to buy experiences. That includes spa treatments (25%), concerts (25%), sporting events (22%), plane tickets (21%) and cooking classes (16%). Walmart Adds Early Holiday Deals as the Latest Walmart+ Perk