November 30, 2020
The 2020 winter retail season is projected to be positive despite some concerns that the traditional Black Friday retail jump-starter underperformed. New credit card data from Bank of America Merrill Lynch for a seven-day period through Nov. 21 (before Black Friday), saw a 9.1% uptick in purchases compared to the same period in 2019. Online sales through the winter holiday season are projected to increase by 31% from last year.
Bank of America contends retailers, especially big-box stores such as Walmart, Target and Best Buy, have spread out Black Friday deals and consumer incentives throughout the holiday period.
Adobe Analytics predicts that U.S. online holiday sales will total $189 billion, shattering all previous records with a 33% increase from 2019 — equal to two years’ growth in one season. If consumers receive another round of stimulus checks and physical stores need to shut down again in large parts of the country, consumers are expected to spend an additional $11 billion online, surpassing a total of $200 billion (47% increase from 2019).
Instead of Cyber Week (Thanksgiving Day to Cyber Monday), Adobe expects November and December to turn into Cyber Months this year:
- Online sales will surpass $2 billion every day between Nov. 1-21 and increase to $3 billion a day Nov. 22–Dec 3.
- Black Friday is projected to generate $10 billion in online sales, a 39% increase from 2019; Cyber Monday will remain the biggest online shopping day of the year with $12.7 billion, a 35% jump YoY.
- Americans will spend $28.1 billion more on their smartphones vs. 2019, accounting for 42% of all online sales, a 55% increase from 2019.
- Small retailers ($10 million-$50 million annual online revenue) will see a larger boost to revenue (107% boost) vs. large retailers (84% boost).
- Most anticipated gifts/toys: PlayStation 5, Xbox Series X, Nintendo Switch. Adobe expects 9% of all holiday customers to be net new online shoppers due to the pandemic, and conversion rates are expected to increase significantly (13%).
“Despite the lower-than-expected growth on Black Friday, we expect total holiday season sales could still exceed the consensus 31% growth as Black Friday is expected to generate only about 5% of total holiday season expected sales ($10 billion of $190 billion per Adobe Analytics), and retailers are offering prolonged sales, lasting the entire holiday season,” Bank of America wrote in a note. “The more spread out sales should also help alleviate fulfillment bottlenecks, spreading out capacity utilization over a longer period of time.”