According to a new Adobe report on UK holiday shopping in 2023, UK consumers are set to spend £24.1bn ($29.58bn) online this holiday season (1 November to 31 December).
This reportedly represents a 2.7% increase on the £23.5bn spent online in the same period in 2022.
ADOBE Analytics data, based on hundreds of billions of actual online transactions and the prices of 100m stock-keeping units since 2019, overall spending will increase, but deep discounts will be used heavily by consumers.
Key spending dates
Online spending during Cyber Weekend (24-27 November) is forecast to reach £3.2bn, 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 £1.05bn, up 4.5% YoY.
Cyber Monday spending is set to grow by 5.0% YoY to £861.4m, with Boxing Day sales expected to grow 4.1% YoY to £460.4m.
A companion consumer survey by Adobe of 2000 UK respondents found that 28% are planning to buy most of their Christmas gifts over these major discounting days to make the most of the deals on offer.
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.
Buy Now Pay Later UK spending
The use of BNPL services is expected to set new records this season, driving £3.7bn in online spending during the holiday season alone, up 8.8% YoY and £300m more than in 2022.
Adobe expects BNPL spending across the biggest shopping days (Cyber Weekend and Boxing Day) to hit £544m, a 13.8% YoY increase, with Cyber Monday set to be BNPL’s largest single day with £153.5m projected to be spent, surpassing 2022’s daily record of £134.9 million, which also occurred on Cyber Monday.
BNPL has reportedly seen strong traction this year, with £13.5bn spent so far in 2023, up 16% YoY and £1.9bn more than during the same period last year. Over the full year, Adobe expects BNPL spending to reach £17.2bn, 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.
Although the BNPL market is gaining traction, the apparent benefits of BNPL could also pose a risk for both the borrowers and lenders. For instance, if a borrower defaults on an instalment, it could potentially accumulate an amount of debt. More debt leads to customers paying late fees in case of delays.
This brings about the importance of regulating the sector to subdue the vicious cycle of passing on the borrowers’ debt to BNPL providers, which is further passed on to credit agencies, negatively impacting their credit scores.
