Prepare for Big Holiday Discounts and Deals This Year

If you’re looking for a good deal this holiday shopping season, you may be in luck.

Retailers could offer discounts of up to 35% off listed prices, according to estimates by Adobe Analytics published Thursday. Online shopping sales are expected to total $221.8 billion between November 1 and the end of the year, a 4.8% increase from the same period a year earlier, according to Adobe’s annual holiday forecast. 

This comes as retailers brace for a potentially weaker holiday spending season, weighed down by higher prices, resuming student loan payments and higher borrowing costs. More than 20% of investors surveyed by Bloomberg last month said that they expect consumer spending to slow by the end of this year, while 56% expect personal consumption to drop by early 2024.

Given the somewhat gloomy projections around consumer spending heading into the holidays, retailers are bracing for a slowdown — and rolling out seasonal items and deals even earlier. Adobe forecasts that discounts will be around for longer this year, with price cuts as high as 18% beginning as early as next week with Amazon’s second Prime Day event of the year. 

The biggest deals will likely be on toys, electronics and apparel — usually the hottest gifts around the holidays. The biggest sellers will likely include Barbie movie toys and merchandise, iPhone 15 models, Birkenstock Bostons, PlayStation 5 and LEGO toys, Adobe said.

And even with deals, customers are likely going to take advantage of Buy Now, Pay Later services that can give customers more flexibility in paying off purchases than a traditional credit card. Adobe projects that Buy Now, Pay Later generate record-high online spending of about $17 billion this holiday season, up 17% from last year.

According to the latest monthly estimates by the U.S. Census Bureau, retail and food services sales for August were $697.6 billion, up 2.5% from a year earlier. This advanced estimate adjusts for seasonal variation and holiday differences, but not for price changes. August inflation came in at 3.7%, still well above the Federal Reserve’s 2% target rate.

It seems consumers can’t seem to rid themselves of economic woes: The University of Michigan's Consumer Sentiment Index for September came in at 68.1, a dip from 69.5 in August. 

“Consumers are understandably unsure about the trajectory of the economy given multiple sources of uncertainty,” said survey director Joanne Hsu.