Online retail sales rose 9% during the holiday season: Adobe

Yahoo Finance’s Dani Romero discusses the spike in online sales during the holiday season despite supply chain issues.

Video Transcript

ALEXIS CHRISTOFOROUS: Rising prices weren't enough to slow consumers down last month. A new report from Adobe Analytics shows online sales rose nearly 9% as shoppers opened their wallets to buy holiday gifts. Joining us now with more is Yahoo Finance's Dani Romero. Dani, what else can you tell us?

DANI ROMERO: Yeah, that's right, Alexis. The uptick in sales was, in part, due to higher prices in goods, which we've seen obviously in apparel, to groceries, to appliances. But the US consumer spending on online shopping was actually weaker than expected, and that's according to Adobe Analytics.

So let's take a look at this breakdown of the data. Consumers spent a record of $204.5 billion online over the 2021 holiday season, an increase of 8.6% from a year earlier. That figure was lower than the $207 billion that was expected by Adobe, making it the smallest rise since the company started tracking holiday spending in 2014.

However, holiday sales prices increased 3.1% in December compared to the prior year. Consumers have also been spending in more expensive categories such as jewelry, which could be another factor contributing to the retail sales growth. Patrick Brown, Adobe's vice president, says consumers are finding e-commerce as a less expensive option when it comes to goods like electronics as well as jewelry.

But with supply chain disruptions, some consumers-- some retailers' inventory has actually been hit. Adobe tracked six billion out of stock messages online during the holiday season, a 10% increase from the prior year. Still, those out of stock messages could have also fueled those shoppers to move to another retailer's website.

In a separate analysis by Salesforce, they found that retailers' inventory shrank by 2% this holiday season compared to 2020 levels, all due to those lingering supply chain issues. Now, take a listen to what Rob Garf, Vice President and General Manager Retail at Salesforce says about the shrink in inventory.

ROB GARF: On the surface, a 2% reduction in the SKU or merchandise assortment sounds really high. The reality is stores, retailers have too much product throughout the supply chain to begin with. I think this is actually a forcing function for retailers to step back and to see how to get smarter around their assortment, around their allocation.

DANI ROMERO: Garf also noted that retailers are actually investing more in private label all to have a little bit more control not only on the brand, but also their inventory. Alexis.

- All right, I'll jump in here, Dani. The National Retail Federation is coming out with their final holiday sales figures on Friday, but what do we know so far about department store sales?

DANI ROMERO: Yeah, and that's very interesting, right? Black Friday, a day where it's really known for shoppers to flock to the mall for those door-buster deals, has actually really lost its rhythm over the years. According to Placer AI-- excuse me, Placer.AI tracker shows that shopper visits to department stores on Black Friday tumbled.

Foot traffic at Macy's fell 18%, while visits at Nordstrom were down 18.6%. Also, foot traffic at Neiman Marcus dropped 20.3%, while Kohl's traffic slipped 23.1%. And like you said, there's much anticipation on the final holiday sales report from the National Retail Federation which comes out this Friday to see what trends they're seeing, what they saw this holiday season.

ALEXIS CHRISTOFOROUS: All right, Dani Romero, thanks so much for that breakdown in holiday online sales.