Adobe forecasts USD $14 billion online spend for Prime Day

Adobe has released its online shopping forecast for Amazon Prime Day, projecting that the event will generate USD $14 billion for online US retailers. The forecast is based on data from Adobe Analytics, which analyses e-commerce transactions across over one trillion visits to US retail sites, covering 100 million SKUs and 18 product categories.

Prime Day, spanning two days from July 16 to 17, has become a significant e-commerce event, drawing consumers to take advantage of discounts across various retailers. According to the report, the first day of Prime Day is anticipated to drive USD $7.1 billion in online sales, marking an 11.3 percent increase year-over-year (YoY). The second day is expected to generate USD $6.9 billion, up 9.2 percent YoY. Combined, the event is forecasted to reach USD $14 billion in online sales, representing a 10.5 percent YoY growth and setting a new record for Prime Day.

Mobile shopping, in particular, is expected to see a substantial surge. Adobe forecasts that mobile sales will reach USD $3.4 billion on the first day, constituting 48.4 percent of the total online spend compared to desktop shopping. This makes it the biggest mobile shopping day of the year so far.

Significant discounts will be a driving force behind this anticipated surge in spending. Adobe expects discounts to range between 9 percent and 22 percent off the listed price. Electronics are forecasted to have the largest discounts at 22 percent, compared to 14 percent the previous year. Other categories with considerable discounts include apparel at 20 percent, home/furniture at 17 percent, toys at 15 percent, televisions at 14 percent, appliances at 12 percent, sporting goods at 11 percent, and computers at 9 percent. Last year's discounts for these categories were notably lower.

The forecast also highlights a rise in back-to-school shopping during the Prime Day event. Adobe notes an 80 percent increase in online spend from July 1-7, 2024, compared to daily sales levels in June 2024, indicating early back-to-school shopping activity. The later date of this year's Prime Day, closer to the start of the school season in August for many districts, is expected to further boost back-to-school spending.

Flexible payment methods such as Buy Now Pay Later (BNPL) services are becoming increasingly popular among budget-conscious consumers. From January 1 to June 30, 2024, BNPL services have driven over USD $39.7 billion in online spending, an increase of 12.1 percent YoY. Adobe anticipates a significant uptake in BNPL usage during Prime Day, estimating that it will drive between USD $1.09 billion and USD $1.11 billion in online spend across both days, representing growth of 18.1 percent and 19.6 percent YoY, respectively.

So far in 2024, online spending has reached USD $502.9 billion, growing 7.4 percent YoY and indicating resilience in the digital economy. For the next quarter, from July 1 to September 30, Adobe forecasts an additional USD $229.1 billion in online spending, which would represent a 7.2 percent YoY growth.

Adobe's data indicates that strong consumer spending this year has primarily been driven by new demand rather than higher prices. The Adobe Digital Price Index, tracking online prices across 18 product categories, shows that e-commerce prices have fallen for 22 consecutive months, with a 4.2 percent decline YoY in June 2024. If online inflation were factored in, the growth in consumer spending would be even higher.