Online holiday sales projected to reach record-breaking $207B

Online holiday shopping sales are projected to notch a record-breaking $207 billion this year even as retailers grapple with dire supply chain challenges, according to Adobe. 

The projection– which covers online shopping from Nov. 1 to Dec. 31 –  shows a 10% increase from last year, according to the Adobe Digital Economy Index.  

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Globally, Adobe projects that online spending will hit $910 billion during the same time, which marks an 11% growth compared to a year ago. 

This "strong growth rate" may be unsurprising, comes just "after a year where the pandemic made e-commerce an essential service," Adobe said.  

During Cyber Week, consumers are expected to spend about $36 billion on online goods. However, Cyber Monday is expected to drive the biggest single-day profits of about $11.3 billion, a 4% increase from last year. 

Meanwhile, Black Friday is projected to drive $9.5 billion in profits, up 5% compared to 2020 and Thanksgiving is expected to pull in about $5.4 billion, an increase of about 6% from last year. 

However, the season won't come without its challenges.  

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Due to crowded ports and cargo delays and disruptions in overseas manufacturing, consumers will not only face a shortage in supplies but they'll also see higher prices compared to last year even with the holiday discounts, according to Adobe. 

For instance, "the prevalence of out-of-stock messages has risen a whopping 172%" heading into the holidays compared to January 2020.  Adobe projects this will hold and even increase for certain products over the next couple of months. 

Currently, the category with the highest out-of-stock levels is apparel followed by sporting goods, baby products and electronics, according to Adobe.  

Meanwhile, consumers are also likely to pay more for products that are in stock due to the fact that retailers are issuing smaller discounts compared to years past "on top of e-commerce inflation that has persisted through the year," Adobe said. 

HOLIDAY SHOPPING SEASON WILL FACE SUPPLY CHAIN CHALLENGES, EXPERT WARNS

This year, Adobe estimated that discounts will range from 5% to 25% range across categories, down from the historical average of 10% to 30%. 

"This is happening as pricing levels have been elevated," Adobe said, adding that online prices are already up 3% as we head into this holiday season. 

During Cyber Week, for example, Adobe projects that shoppers will pay 9% more on average compared to a year ago.

However, Patrick Brown, Adobe vice president of growth marketing and insights, said these challenges – limited product availability, higher prices and concerns about shipping delays – will ultimately drive more consumers to shop online rather than in-store "as it provides more flexibility in how and when consumers choose to shop."