Adobe’s 2020 online holiday shopping predictions

Abstract, colorful
image of opening a box.

Classic songs like “I’ll Be Home for Christmas,” and “There’s No Place Like Home for the Holidays” couldn’t be more true as we head into the 2020 holiday season.

With a global pandemic, in-store social distancing restrictions, and much of the workforce now remote, this will no doubt be an especially homebound holiday season — and research bears that out, according to our “2020 Holiday Predictions” released today.

Using Adobe Analytics, the annual report evaluates 1 trillion visits to U.S.-based retail websites. Analyzing product trends, pricing, transactions, as well as shipping and returns data, we predict online spend and other trends for November through the end of December 2020. Companion research based on a survey of more than 1,000 U.S. adult consumers in October 2020 reinforces the notion that this will likely be the most digital holiday season yet.

“The holiday shopping season is starting earlier than ever this year, and we expect record online sales as many consumers opt to shop online to avoid stores because of the unknown around COVID-19,” says John Copeland, VP of marketing and customer insights at Adobe. “This will place an even bigger emphasis on retailers’ customer intelligence and really understanding where customers are in their shopping journey — at the individual level — so that the experiences they get from your brand are personalized and contextually relevant this holiday season.”

Contextual relevance is paramount.

We go deep into the top findings of this year’s holiday shopping predictions, below.

1. COVID-19 will drive online holiday spend, with record gains for e-commerce

Adobe predicts that online holiday season spending will reach $189 billion, representing 33 percent growth year-over-year (YoY).

“The $189 billion in online sales we’re expecting would account for two years’ worth of growth in e-commerce this holiday season,” Adobe’s Copeland says.

In fact, the data shows that the potential for online spend might go even higher, to $200 billion (47 percent YoY growth), if the flu season keeps people out of stores.

2. Shipping will make or break retailers

To mitigate shipping, inventory, and logistical challenges, retailers will begin discounting shipping in early November to spur earlier purchasing and demand, according to Adobe’s Copeland.

The majority of consumers surveyed said they wouldn’t pay to expedite shipping (64 percent), likely because they have come to expect free shipping during November and December. Seventy-five percent said free shipping is an important consideration when shopping online. Adobe data shows the share of free shipping orders typically increases by 8.6 percent during the holiday season.

“By offering free shipping and communicating cut-off dates, retailers have an opportunity to drive sales earlier in the season, helping to mitigate shipping issues,” Copeland said.

Adobe expects some consumers to shop earlier this year to avoid shipping delays. And 36 percent, according to the survey, may opt for quicker or expedited shipping, even if that means paying for it. This, in turn, will place even more pressure on retailers to — pardon the pun — deliver.

“No one wants to pay for a package that doesn’t arrive on time, particularly during the holiday season,” Copeland says. “And if you do expect delays, communication is key and can mitigate the pain. This is increasingly important this year because fewer people are traveling to be with family, and we expect an increase in gifts being shipped directly from the retailer.”

Our advice: Waive the shipping fee when someone who paid for expedited shipping doesn’t get their package on time.

Expect an 18 percent increase in gifts shipped this year, too, with gift wrapping options and gift guides shaping the shopping experience.

3. Black Friday could displace Cyber Monday

Thanks to COVID-19, this year’s Black Friday may not have as much “door-busting” as usual. Adobe is predicting Black Friday to reach $10 billion in online sales this year (up from just under $8 billion last year).

Smart retailers, who recognize that many people might avoid stores on this typically heavy in-store traffic day, are pushing brick-and-mortar deals earlier this year, with promises of Black Friday deals that will last for “all of November and December.”

The companion survey of consumers found 49 percent believe they will get the best prices online on Black Friday and Cyber Monday. Below are the dates expected to drive the best possible discounts for their respective categories:

“Even for consumers that do venture out into stores, store capacity limits will create big lines and could mean that retailers have to turn many consumers away at the door, also pulling them online,” Copeland said. “This large amount of spend that’s typically made offline could add enough spend to the digital version of Black Friday to surpass Cyber Monday. ”

4. BOPIS will continue to soar

The pandemic has seen a huge boost in BOPIS orders and will increase even more during the 2020 holidays.

Retailers with buy online, pick up in-store fulfillment options (BOPIS) won Cyber Week 2019 and will continue to benefit from this offering during the 2020 holiday shopping season. Indeed, from April to May of this year, when the pandemic first hit, BOPIS orders grew 120 percent YoY.

Last holiday season BOPIS order growth reached 22 percent of online spend. Adobe expects this holiday season that BOPIS will reach over 40 percent YoY growth.

“Expect to see long lines for picking up orders in-store this holiday season,” Copelands adds.

Interestingly, 71 percent of consumers say they expect to shop for more items while picking up an item with BOPIS, down from 82 percent in 2019, most likely because people are trying to get in and out of the store quickly this year due to COVID-19 concerns.

5. Even with more people home, mobile shopping will continue to gain ground

Adobe expects smartphones and tablets will make up a bigger share of online spend this holiday season compared to last year, despite the increase in people working from home behind their computers.

“With the decrease in time spent commuting, combined with a continued usage of computers while working from home, some thought the advance of smartphones as the preferred shopping device would stall,” Copeland says. “However, smartphone shopping growth has continued at an accelerated rate.”

Adobe predicts consumers will do 42 percent of their shopping from smartphones this holiday season, with an estimated $28 billion more spent using smartphones this year than during the 2019 holiday.

6. Search engines will be really important for driving online sales

Search will drive a 9 percent higher share of purchases this holiday season, making up 46.5 percent of total online shopping revenue, according to the holiday research.

“Search is a high-intent e-commerce environment,” Copeland explained. “It tells you exactly what a person is looking for before they even get to your site, so it’s natural that organic search is set to see the biggest increase in shopping. Retailers should be taking advantage of product listings, reposition their best content for the holiday shopper, and create category or landing pages that mirror what people are searching for most.”

Email is among the marketing channels taking the biggest hit this season, with an expected 8 percent decrease in share. Finally, social networks are notorious at driving awareness instead of direct purchases. And while their share of e-commerce, in general, is up 14 percent over last year, it’ll only barely surpass 3 percent of purchases this holiday season, Adobe predicts.

Data-driven campaign orchestration, Copeland advises, is going to be key this year.

Get your data in order because you’ll most definitely need a complete view of your customers to meet their needs this holiday season — in a timely fashion.

“You want to make sure that you are reaching the right person with the right message at the right time,” he says. “The end-to-end customer experience needs to be relevant, seamless, and correctly sequenced. While consumers are certainly caught up in the holiday cheer, don’t expect them to brush it off if they have a poor online shopping experience.”