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Yes Virginia, There Will be a Massive E-Commerce Boom This Holiday Season

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In normal times, the e-commerce growth expected this holiday season would equal two years of growth.

Two years!

But these are not normal times. And because of the ongoing pandemic that has created these abnormal times, COVID-19 will drive online holiday spending with record gains — about $189 billion — representing 33% growth year over year, according to Adobe Analytics’ annual “2020 Holiday Predictions.”

The San Jose, Calif.-based digital analytics company said that e-commerce sales could go even higher, to $200 billion (47% year-over-year growth), if the an increase in COVID-19 cases, not to mention the flu, keeps people out of stores.

The annual report evaluates one trillion visits to U.S.-based retail websites. Analyzing product trends, pricing, transactions, as well as shipping and returns data, Adobe Analytics predicts online spend and other trends for November through the end of December. Companion research based on a survey of more than 1,000 U.S. adult consumers in October reinforces the notion that this will likely be the most digital holiday season yet, according to the company.

“The holiday shopping season is starting earlier than ever this year, and we expect record online sales as many consumers opt to shop online to avoid stores because of the unknown around COVID-19,” says John Copeland, vice president of marketing and customer insights at Adobe Analytics. “This will place an even bigger emphasis on retailers’ customer intelligence and really understanding where customers are in their shopping journey — at the individual level — so that the experiences they get from your brands are personalized and contextually relevant this holiday season.”

Considering the massive boom in e-commerce, Adobe Analytics also predicts that “shipping will make or break retailers.”

Copeland said retailers will begin discounting shipping in early November to spur earlier purchasing and demand in an effort to mitigate shipping, inventory and logistical challenges.

According to the survey, most consumers said they wouldn’t pay to expedite shipping (64%), likely because they have come to expect free shipping during November and December. Seventy-five percent said free shipping is an important consideration when shopping online.

“By offering free shipping and communicating cut-off dates, retailers have an opportunity to drive sales earlier in the season, helping to mitigate shipping issues,” Copeland added.

Adobe expects some consumers to shop earlier this year to avoid shipping delays. And 36% of consumers may opt for quicker or expedited shipping, even if that means paying for it, according to the survey.

“No one wants to pay for a package that doesn’t arrive on time, particularly during the holiday season,” Copeland says. “And if you do expect delays, communication is key and can mitigate the pain. This is increasingly important this year because fewer people are traveling to be with family, and we expect an increase in gifts being shipped directly from the retailer.”

See results from the entire report here.

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