Retail

America's $221 Billion Online Christmas

Amazon
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Every year, several research firms and associations forecast Christmas holiday retail sales. The most well-known of these is the National Retail Federation. The NRF predicts that 182 million people will do holiday shopping from Thanksgiving through Cyber Monday, which would be a record. However, this forecast does not show the extent to which online shopping continues to seize more and more of the dollars spent over the year-end holidays.

The most carefully followed data for holiday e-commerce comes from Adobe Digital Insights. Adobe, one of America’s largest tech companies, has access to sales trends because of its cloud services used by tens of thousands of retail establishments. This enables Adobe to track 1 trillion visits to retail sites over the holidays.

Adobe recently issued its 2023 Holiday Shopping Forecast. The primary conclusion of its authors is that e-commerce sales will reach $221.8 billion this year, up 4.4% from last year. The data also signal a significant shift in how people shop online. “Mobile devices will overtake desktops this holiday season, accounting for 51.2% of online spending for the holiday season and amounting to a record $113 billion.” After decades of people shopping on sites like Amazon.com using PCs and Macs, this shopping has migrated to smartphones.

What does this trend mean to retailers? Among the most significant changes is the extent to which e-commerce sites must be “smartphone first.” The smartphone version of Amazon.com is vertical, while the PC version is horizontal. The navigation is much simpler for smartphones. More than any other online retailer, Amazon (NASDAQ: AMZN) is likely to be state of the art. It has been for three decades and continues to be today the No. 1 e-commerce destination on the internet. Walmart, another major online retailer, maybe a poor place to shop.

Just as retailers had to grapple with moving from physical stores to PCs, they now need to operate in a world where buyers shop on their phones. This evolution has already triggered the death of several physical retail brands.

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