- Adobe Analytics said online sales grew nearly 9% during the holiday season to a record $204.5 billion.
- The uptick was driven by higher prices for items ranging from apparel to groceries to appliances: according to Adobe, online prices rose 3.1% in December compared to the previous year and were up 0.8% in the month. .
- Regarding continued inflation, Vivek Pandya, principal analyst at Adobe Digital Insights, said, “It is certainly a significant contributor to growth, but it is not the aggregate of growth.”
Online sales rose nearly 9% to a record $204.5 billion during the holiday season, Adobe Analytics said on Wednesday, as consumers opened their wallets to spend on gifts for family, friends and themselves.
But the uptick in sales was driven by higher prices for items ranging from apparel to groceries to appliances, said Adobe, which analyzes 1 trillion visits to retailers’ websites.
Online prices increased by 3.1% in December compared to last year and increased by 0.8% month-on-month. Adobe said it marked the 20th consecutive month of online inflation on a year-over-year basis, and followed a record year-over-year spike in prices of 3.5% in November.
Regarding continued inflation, Vivek Pandya, principal analyst at Adobe Digital Insights, said, “It is certainly a significant contributor to growth, but it is not the aggregate of growth.” “There is a level of smooth growth taking place in total retail sales … and we are looking at inflation as one of the explanatory factors.”
Consumers are also buying in more expensive categories, such as jewelry, which could be another factor contributing to the growth in retail sales, he said.
And sales could be even higher if consumers didn’t find so many out of stock online. Retailers have been dealing with supply chain disruptions in recent months, leading to delays in shipments of goods during key shopping days. Companies are also grappling with how to work through another surge in Covid cases in the US, fueled by the highly contagious Omron variant, that has left many of their workers sick and on edge.
Apparel companies Lululemon and Abercrombie & Fitch said this week that some of these constraints would result in lower fiscal fourth-quarter sales than previously expected. Urban Outfitters said it struggled to keep an assortment of household items in stock while it could use air freight to bring clothes in from overseas.
According to Adobe, consumers viewed more than 6 billion out-of-stock messages on retailers’ websites during the holiday period, which runs from November 1 to December 31. Adobe said this is up 10% from the year-ago level and 253% from the 2019 holiday season.
Still, stock-out messages may have pushed consumers to the websites of other retailers in search of requisitioned goods.
“The thing about online is you have a little bit more flexibility in choice, where if an item is out of stock on one site, you can open another window browser and visit the other site,” Pandya said. .
A separate analysis by Salesforce found that supply chain issues caused retailers’ holiday inventory to drop 2% compared to 2020 levels.
As retailers faced higher prices on everything from transportation to labor, and inventory levels were constrained in many categories, this meant that discounts were largely low even this holiday season. Adobe found that electronics markdowns averaged 8%, compared to 21% in 2020. Sporting goods were discounted at 6%, compared to 14% a year ago. However, the consumer saw more hype for apparel and toys.
The shopping rhythm also evolved this past holiday season. Retailers were talking Black Friday-type deals in early October, hoping to avoid a last-minute rush to spread sales amid supply chain pressures and consumers rushing for gifts.
In the weeks before Thanksgiving, from November 1 to November 24, online sales increased 19.2% year over year, Adobe said. Sales are down 1.4% in the five days between Thanksgiving and Cyber Monday. And from November 30 to December 31, sales on the Web rose 5.6% from prior-year levels, as procrastinators looked for last-minute options and shoppers used their gift cards in the days after Christmas.
But some consumers started even earlier in October. Data from Placer.AI showed that travel to Best Buy locations in the US climbed 10.2% that month compared to 2019 levels, while they were up 16.7% at Target, and Dick’s Sporting Goods jumped 14.7%.
Meanwhile, Black Friday — the day after Thanksgiving — is losing its luster as a day for shoppers to flock to malls before sunrise in search of doors.
Placer.ai tracked shoppers’ visits to department stores on Black Friday, which fell across the board versus 2019. Traffic at Macy’s dropped 18%, while trips to Nordstrom dropped by 18.6%. Neiman Marcus’ traffic dropped 20.3%, Kohl’s traffic dropped 23.1%, and Dillard’s trips dropped 27.3%, according to placer.ai.
The National Retail Federation, the leading trade group in the retail industry, is expected to release its much-anticipated, final holiday sales results on Friday.