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Online Holiday Spending Expected to Slow This Year

Online holiday spending in the United States is expected to grow slowly this year as a result of lingering COVID-19 pandemic concerns. In fact, online holiday spending is expected to grow at its slowest pace in about eight years. There are many uncertainties surrounding the holidays this year, and analysts are now expecting these concerns to actually impact the holiday season.

According to Adobe Analytics, it is forecasted that online sales will experience a 10% growth at the end of the year, in November and December, for the holiday season. In 2020, there was a record 33% jump — mainly because many people wanted to shop from home during the pandemic, rather than shop in-store. 

Pandemic fallout and lingering concerns will likely play a factor in online spending this year, according to Adobe Analytics. Consumers are struggling with higher prices of goods, lack of items on shelves because of the global supply chain issues, labor shortages, and continuous pandemic worries. All of this will likely affect how consumers shop and spend money this holiday season.

While COVID-19 infections have slowed down in the past few months — after surging around the nation because of the Delta variant — there are still concerns that a resurgence of cases could happen, much as it did earlier this year when people thought the pandemic was coming to an end. The winter of 2020-2021 experienced record numbers of cases, so there are still lingering concerns that this winter will also experience a surge of cases, once again.

Adobe Analytics started tracking holiday spending in 2014. If online holiday spending truly doesn’t grow more than 10% this year, then this will be the smallest rise since 2014. While online spending may not grow, the amount of money that consumers will pay for items this year probably will. Already, it is estimated that consumers will spend about 9% more this year because of product prices rising.

The lack of stock will also play a huge factor in how much consumers spend online during this holiday season. While lingering concerns about COVID-19, as well as higher prices for goods, may turn many away from spending a lot of money this year, lack of inventory may also keep consumers who want to spend money away. Global supply chain issues have left the ports in the nation clogged — and while there have been many steps to try to fix this, many are still worried that the holiday season will be a disaster for the supply chain.

Already, companies have experienced low stock issues because of these problems. For example, out-of-stock messages were up by about 172% by the end of July on retailers’ websites. Even if consumers choose to shop more online this year — similar to how they did in 2020 — they might not be able to get the items they want because of low inventory. 

Retailers are trying to combat this low stock already, and many are asking consumers to shop early this year for the holiday season, rather than wait for the last minute. It is also thought that retailers will offer less discounts and sales this year to try to keep their stock high.

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