AI Traffic Surges and October Prime Kicks Off a Record Shopping Season

SPEAKER_1 (0:00)

This year's fall is in full swing here. We're just a few days away from the start of October, which means the holiday season is just around the corner. Oh my goodness, I need to start my shopping. But the team at Adobe is forecasting a strong holiday shopping season, projecting more than $275 billion in sales, and year-over-year growth of 6.7%.

For more on the data, let's bring in Vivek Pandya, the lead analyst at Adobe Digital Insights. Vivek, great to have you on. You know these are my favorite days when we get to talk about shopping and spending. That forecast enormous, $275.1 billion in online spending. What does that tell you about the health of the consumer? We keep having this conversation about how low sentiment is, but you're projecting another record year of spend.

Vivek Pandya (0:47)

We are, and we're seeing durable levels of online demands in terms of spend. When we think about the holiday season, there's a number of factors that are culminating and manifesting in what we're anticipating through our projection. So you have consumers leaning on the online space and the sector to really understand where they can get the best value, where they have this perception that these sales deals days will give them the best pricing. Essentially, that's informing their behavior in shopping and buying. What we're really seeing is the shopping and sales days also spanning beyond big ticket gift item giving. So really, they're using it for everyday essentials, household items. That's also kind of netting out in the data. So I think when you have a consumer that has this responsiveness to the deal days, it becomes clear why we're going to see these heights reached on Black Friday, Cyber Monday, and then even the Prime event coming up in the next couple of weeks.

SPEAKER_1 (1:47)

So let's talk about October 1st before we dive into Cyber Week, because you just mentioned the Prime event. It's even earlier. We're now October 6th, I think is when Amazon's next Prime days are. 6th and 7th.

What's the expectation for the holiday spend in October or the spend overall? And should we now think of the holiday seasons really as as three months of spending since everything's moving further and further up, it seems?

Vivek Pandya (2:12)

Yeah, absolutely. So we're expecting over $95 billion to be spent in October alone. And that Prime event will net out just over $9 billion. So you're seeing it perform in the middle of what we tend to expect from between the Thanksgiving and maybe a couple of years ago on Black Friday. So really, that is indicative of the appetite on the part of the consumer to do some of that early shopping, especially with the Prime event over the summer. We saw it really shifting and being used for back to school purchasing and things like that. So the willingness for the consumer to think about shopping earlier for different types of items is what's driving what we're expecting out of October.

And then you also have this broader perception on the part of the consumer that they're going to get the best deals on Black Friday going into Thanksgiving week. So that's also going to create a step change. We also have Side Monday now falling in November instead of December last year. So that's helping drive up really strong growth over 17% for November. So we do see it as a broader kind of Q4 sales motion. And what we're really finding is the consumer is tapping in to what's available to them in the online ecosystem, be it AI recommendations, the engagement with the platforms, or even social media discovery and the cash back rewards programs. All that is helping drive stronger purchasing propensity and netting out in the sort of responsiveness to the discounts.

SPEAKER_1 (3:45)

And Vivek, while you were talking there, we had your Cyber Week forecast chart up on the screen. And one of the things I thought was very interesting in the report, which I should say was just released this morning, is that Black Friday appears to be gaining ground on Cyber Monday. It's growing at a faster rate. I think traditionally people thought of Black Friday as that day you go out and physically shop, you go to the mall or to the stores, and Cyber Monday was meant for home shopping. What's driving the move now with Black Friday catching up here?

Vivek Pandya (4:12)

Well, I think it's twofold. One, consumers do perceive the best absolute discounts falling on Black Friday, and some of these major days on Thanksgiving week. And when we look at the discount data, and when the discounts get the deepest and steepest, that's usually on that Thanksgiving week. So what we're finding is discounts will hit these levels where they'll see discounts in the range of 30% off on major categories like electronics. So when you have that type of discount opportunity and upside, that's really giving consumers a sense that, okay, I do recognize that I'm getting discounts at different levels in October, earlier in November, but I am going to hold out for what I perceive and believe to be the strongest pricing environment for me to purchase many big ticket items in. And when we track the pricing data, we do see that net out across the price competition. So that's why we're still seeing Black Friday have a profound growth. And it's on the part of the consumer where they're really putting such an importance on the price value opportunity that this period gives them, that they're not wanting to leave any of that value on the table.