Adobe predicts £24.1 billion UK online holiday shopping season as discounts and BNPL fuel spending

UK consumers are set to spend £24.1 billion online this holiday season (1st November to 31st December), representing a 2.7% increase on the £23.5 billion splashed out online in the same period in 2022, according to Adobe.

The forecast, which is based on Adobe Analytics data from hundreds of billions of actual online transactions and the prices of 100 million SKUs since 2019, also reveals the level of discounting on offer across 18 retail categories.

While overall spend will increase, consumers will be making greater use of deep discounts on offer during Cyber Weekend (24th – 27th November) and flexible payment services such as buy now pay later (BNPL) to spread the cost of holiday gift buying. 

Online spending during Cyber Weekend is forecast to reach £3.2 billion, up 3.7% YoY and representing 16.8% of the total holiday season spending. 

Black Friday is expected to retain its position as the biggest shopping day of the year, bringing in a record £1.05 billion, up 4.5% YoY. Cyber Monday spending is set to grow by 5.0% YoY to £861.4 million, with Boxing Day sales expected to grow 4.1% YoY to £460.4 million.

 Adobe also commissioned a companion survey of 2,000 UK consumers, conducted by Censuswide in October 2023, to reveal shopping intentions and preferences for the 2023 holiday season.

The survey found that 28% of UK consumers are planning to buy most of their Christmas gifts over these major discounting days to make the most of the deals on offer. 

“After a tough 2023 for the sector, retailers can feel optimistic about this year’s golden quarter with e-commerce expected to grow by 2.7% compared with last year,” says Vivek Pandya, Lead Analyst at Adobe Digital Insights.

“This year’s growth will be fuelled by the increasing use of flexible payment methods like BNPL and strong spending over Black Friday and Cyber Monday, so it’s essential that retailers gear up for this year’s milestone shopping days.”

Competitive discounting is expected throughout the season and Adobe anticipates discounts will hit record highs – up to 22% off listed prices - as retailers seek to stimulate demand among cost-conscious customers.

Of the 18 categories tracked by Adobe, computers, televisions and sporting goods are expected to offer the biggest deals: discounts for computers are expected to peak at 22% off pre-holiday season prices, while television discounts are set to hit 20%, and 19% for sporting goods. Other categories with notable discounts include furniture at 18%, apparel at 16% and toys at 14%. 

Discounts are forecast to peak during Cyber Weekend. Black Friday (24th November) is expected to be the best day to shop for toys and apparel, while Saturday 25th November will have the best deals for computers and TVs.

The deepest discounts for appliances will be on Cyber Monday, while Boxing Day will have the best deals for sporting goods and furniture.

The use of BNPL services is expected to set new records this season, driving £3.7 billion in online spending during the holiday season alone, up 8.8% YoY and £300 million more than last year.

Adobe expects BNPL spending across the biggest shopping days (Cyber Weekend and Boxing Day) to hit £544 million, a 13.8% YoY increase, with Cyber Monday set to be BNPL’s largest single day with £153.5 million projected to be spent, surpassing 2022’s daily record of £134.9 million, which also occurred on Cyber Monday. 

BNPL has already seen strong traction this year, with £13.5 billion spent so far in 2023, up 16% YoY and £1.9 billion more than during the same period last year. Over the full year, Adobe expects BNPL spend to reach £17.2 billion, a staggering 26% increase on the previous year.

Adobe’s consumer survey found that 39% of shoppers had used BNPL at least once this year, and 15% plan to use it to buy Christmas gifts over the festive period.

Adobe’s consumer survey found that many households are planning to change their Christmas food shopping habits to make savings where they can.

A quarter are planning to switch away from premium or branded products to store brand or value range alternatives, a quarter are also planning to shop at stores that offer cheaper prices than their usual supermarket, and 24% are planning to substitute their usual products for different, cheaper items altogether. 

Additional findings

TikTok traffic to UK sites is expected to surge this holiday season: As the platform continues to grow, Adobe predicts TikTok’s share of traffic to e-commerce sites will increase as much as 135% YoY, where legacy incumbents Facebook and Instagram are expected to fall by 10% YoY and 15% YoY, respectively.

This shift is also reflected in consumer research data which showed that 13% of consumers will take inspiration from TikTok for thier gift ideas this year, on a par with Facebook and hot on the heels of the top social platform for gift inspiration, Instagram (14%).

Mobile shopping continues to outperform desktop, with 2023 set to be the biggest year for e-commerce spend on mobile devices:

Adobe anticipates 59.4% of online spending will take place on mobile devices this holiday season, a milestone reflecting improved small screen shopping experiences. Mobile spending is set to hit a record £14.1 billion over the holiday period, up 7.6% YoY, with usage peaking on days when consumers are likely to be with friends and family, such as Christmas and Boxing Day.