U.S. holiday shopping sales are expected to reach $221.8 billion this year, a 4.8% year-over-year growth, according to recent data from Adobe.
Several key factors are driving up holiday spending, including unprecedented discounts and the increasing popularity of buy now, pay later (BNPL) payment methods. Consumers are expected to continue seeking out discounts—or the ability to break down their purchases into smaller installments—to stretch their budgets during a time when inflation is leading to rising costs across all goods and services.
“Despite an unpredictable economic environment, where consumers face several challenges including rising interest rates, we expect strong e-commerce growth this season on account of record discounts and flexible payment methods,” said Patrick Brown, Vice President of Growth Marketing at Adobe in a prepared statement. “Buy Now, Pay Later in particular has become increasingly mainstream and will make it easier for shoppers to hit the buy button, especially on mobile devices where over half of online spending will take place.”
A Rapid Shift to BNPL
According to Adobe, retailers are aware that many consumers are more conscious about their spending habits—and as result—they are looking at offering deep discounts to lure consumers in to make a purchase. Electronics, clothing, and toys are expected to see some of the biggest deals, according to Adobe’s data. For example, electronics discounts are expected to hit 30% this year vs. 25% in 2022.
The deepest discounts are expected during Cyber Week, making it the ideal time for bargain hunters. For example, Black Friday will offer the best deals on TVs, while Cyber Monday will feature the best discounts for electronics and furniture.
In anticipation of the increased holiday spending, Adobe also predicts that BNPL payment methods will see new records this year as well, “driving 16 billion in online spending, up $16.9% YoY and $2.5 billion more than last year.”
BNPL has already seen significant traction this year, with users spending $46.7 billion, marking an increase of 14.7% year-over-year. In its findings, after polling 1,000 U.S. consumers, Adobe found that one in five respondents said they plan to use BNPL to purchase gifts this holiday season.