With Halloween two weeks away, it’s time to start looking at the 2022 holiday shopping season and its potential impact on retailers and their payments volumes.
E-commerce powerhouse Adobe Inc. is forecasting $209.7 billion in U.S. online holiday shopping purchases, up 2.5% from $204.5 billion in the Nov. 1 through Dec. 31 period last year. By contrast, holiday shopping volume was up 8.6% last year from the 2020 period as consumers embraced e-commerce shopping during the pandemic. The holiday period is so important to retailers that the big chain Target Corp. already is starting week-long Black Friday sales this week.
As for payments, Adobe suggests transactions made using buy now, pay later payment options may slow this year. In 2020, the online revenue share for BNPL increased 31.6% from 2019. “As we enter the 2022 holiday season, BNPL usage is expected to slow. From January to September 2022, online revenue share from BNPL grew only 5% when compared to the same period in 2021,” Adobe says. “While the growth has been partly affected by the broader economic environment and a slowdown in consumer spending, BNPL is also contending with challenges in demonstrating value to mass consumers.”
San Jose, Calif.-based Adobe predicts that electronics, apparel, and groceries will constitute $103.8 billion of the two-month holiday purchases. Electronics will generate $49.8 billion of online spending, up 2.9% year-over-year. Though it expects large discounts will compress margins and spending, there will be enough shoppers to maintain growth, according to the forecast. Online apparel sales, though still large, could decrease 6.7% from last year to $49.8 billion. “This 6.7% YoY decline will reflect increasing consumer interest in physical stores, as pandemic-related anxieties subside,” Adobe says.