Businessman hand showing shopping cart with smart phone, on line shopping concept. (GDA via AP Images)

Online spending during the holidays is set to break records, as e-commerce benefits from physical retail’s woes under the coronavirus pandemic, Adobe said — even with variables like the presidential election and the uncertainty over new federal stimulus payments.

The company’s latest holiday report predicts that sales in the U.S. for the peak period will rake in $189 billion, making for a 33 percent year-over-year increase. The figure, equal to two years of growth crammed into one season, would shatter all previous records, the company told WWD.

And that’s assuming consumers won’t get financial help from the government, or see more store shutdowns while COVID-19 infection figures climb again.

“This is a prediction based on a baseline that’s established according to the current economic and health indicators,” said Peter Sheldon, senior director of commerce strategy at Adobe. “However, there’s some potential variability in this model. If we see the pandemic continuing to move into a phase two and certain state entities reacting to that with shutdowns [or] that stores are being forced to close or further limit the number of shoppers, etc., then we believe that there could be an even higher boost.”

If consumers do receive another stimulus check and brick-and-mortar store closures hit big swaths of the country, online spending will jump another $11 billion, breaking $200 billion total, for a 47 percent year-over-year increase. Last year, the year-over-year increase was 13 percent, and it was 16.5 percent the year before, in 2018.

Adobe’s report is based on trillions of data points, along with transaction data from 80 of the top 100 retailers, Sheldon explained. But there are two important caveats with the report.

The predictions cover all e-commerce spending during the holiday season — which includes things like online groceries and other essentials — as well as hybrid Internet and physical retail services, like “buy online, pick up in-store” or web-driven curbside pickup orders. The report does not merely focus on gift-giving.

That matters. On Tuesday, new reports indicated that the resurgence of coronavirus infection rates has stoked a stockpiling of pantry items. Apparently the situation has fueled a 3,400 percent year-over-year surge, according to Centricity Inc., a consulting firm that tracks search and shopping activity.

The other caveat is that the Adobe report only covers online transactions, and by this point, it’s clear that e-commerce has benefited from physical retail’s woes in 2020. In other words, brands and retailers that maintain both stores and online storefronts may see the numbers more as a major shift in where their sales are coming from, and not just as a matter of straight gains storming in from web channels.

Even so, the numbers look huge. The season appears ready to take momentum seen in previous peak periods and spike that exponentially.

For instance, mobile commerce has been growing over the past few years but this season Americans will spend $28.1 billion more on their phones versus 2019. That accounts for 42 percent of all online sales, an increase of 55 percent year-over-year. Last year the year-over-year percentage growth was 36 percent. It was 41 percent and 48 percent in 2018 and 2017, respectively.

Other notable predictions: Although Black Friday and Cyber Monday will still be important tentpoles for the shopping season — the former is projected to nab $10 billion in online sales, for a 39 percent increase, and the latter will remain the biggest online shopping day of the year, raking in $12.7 billion for a 35 percent  jump — the holiday kick-off days will still be diluted.

Cyber Week will give ways to Cyber Months, Adobe said, covering November and December. Online sales, which will surpass $2 billion every day between Nov. 1 and Nov. 21, will grow to $3 billion a day between Nov. 22 and Dec. 3.

Small retailers, defined here as merchants with $10 million to $50 million in annual online sales, are expected to get a bigger boost to revenue than large retailers, with a 107 percent boost versus 84 percent, respectively.

This year, Adobe also expects 9 percent of all holiday customers to be new online shoppers, thanks to the pandemic, and conversion rates are expected to increase 13 percent, though the Average Order Value is expected to stay flat, compared to last year.

Typically, the company noted, presidential elections disrupt the flow of commerce. Next week, between Nov. 2 and Nov. 6, Adobe predicts that online sales will total $16.3 billion, but on the day after the election, sales growth will be 11 percent slower than the full week.

Twenty-six percent of consumers believe that the election’s outcome will impact their holiday spending. Online sales were down 14 percent right after the 2016 election, and they dropped by 6 percent the day after the 2018 midterm elections.

Sixty-four percent of consumers also indicated that they won’t pay for expedited shipping this year — a clear signal to retailers that they need to implement one or both of the following: They need to make sure customers know what the free-shipping cut-off dates are early, and have BOPIS or curbside services ready to handle an influx of activity.

Although Americans are expected to spend 18 percent more on gifts directly delivered from retailers, thanks to social distancing and quarantine measures, BOPIS and curbside are expected to swell more than 40 percent compared to last year. And last-minute, panic-buying shoppers will send BOPIS figures up by over 50 percent right before Christmas.

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