Adobe predicts online spending for Prime Day to reach $14 billion

Adobe has released its Amazon Prime Day online shopping forecast, predicting that the event will generate $14 billion for U.S. online retailers. The forecast is based on data from Adobe Analytics, which analyzes e-commerce transactions across more than a trillion visits to U.S. retail sites, covering 100 million SKUs and 18 product categories.

Prime Day, which spans two days from July 16 to 17, has become a major e-commerce event, attracting consumers to take advantage of discounts at various retailers. According to the report, the first day of Prime Day is expected to generate $7.1 billion in online sales, up 11.3% year-over-year (YoY). The second day is expected to generate $6.9 billion, up 9.2% YOY. In total, the event is expected to reach $14 billion in online sales, up 10.5% YOY, setting a new Prime Day record.

In particular, mobile shopping is expected to see significant growth. Adobe predicts that mobile sales will reach $3.4 billion on the first day, accounting for 48.4% of total online spending compared to desktop shopping. That makes it the largest mobile shopping day of the year to date.

Deep discounts will be the driving force behind this anticipated increase in spending. Adobe expects discounts to range from 9 percent to 22 percent off list price. Electronics is expected to have the largest discounts, at 22 percent, compared to 14 percent last year. Other categories with significant discounts include apparel (20 percent), home/furniture (17 percent), toys (15 percent), televisions (14 percent), appliances (12 percent), sporting goods (11 percent) and computers (9 percent). Last year, discounts for these categories were noticeably lower.

The forecast also highlights an increase in back-to-school shopping during Prime Day. Adobe is seeing an 80 percent increase in online spending 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 like Buy Now Pay Later (BNPL) services are becoming increasingly popular among budget-conscious consumers. From January 1 to June 30, 2024, BNPL services generated more than $39.7 billion in online spending, up 12.1% year-over-year. Adobe is predicting a significant increase in BNPL usage on Prime Day, estimating it will generate between $1.09 billion and $1.11 billion in online spending across both days, up 18.1% and 19.6% year-over-year, respectively.

So far in 2024, online spending has reached $502.9 billion, up 7.4% year over year and indicating the resilience of the digital economy. For the next quarter, from July 1 to September 30, Adobe is forecasting an additional $229.1 billion in online spending, which would be up 7.2% year over year.

Adobe data suggests that strong consumer spending this year has been driven primarily by new demand, not higher prices. The Adobe Digital Price Index, which tracks online prices across 18 product categories, shows that e-commerce prices have fallen for 22 consecutive months, with a 4.2 percent year-over-year decline in June 2024. If online inflation were taken into account, consumer spending growth would be even higher.