Veriton Investment

Online Holiday Spending Expected to Rise 5.3%, Fueled by Debt

(Bloomberg) -- US shoppers will spend $253.4 billion online in November and December, up 5.3% from 2024, according to Adobe Inc., with “buy now pay later” checkout options fueling growth.

The forecast represents a slowdown from last year, when online spending rose 8.7%, the firm said. Shoppers plan to curb overall holiday spending due to tariff-related price increases and a weakening labor market, according to a survey released in September by PricewaterhouseCoopers.

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Checkout options that let shoppers purchase items and pay for them over time will drive $20.2 billion in holiday spending, up 11% from a year earlier and more than twice the pace of overall spending growth, according to Adobe, which monitors traffic to retail websites and sales of more than 100 million products.

Online retailers such as Amazon.com Inc. and Walmart Inc. offer the checkout options in partnership with financial technology firms like Affirm Holdings Inc. and Klarna Group. The financing is popular among young shoppers with low credit scores, especially when they’re encouraged to splurge on discounted merchandise during Black Friday and Cyber Monday sales.

Buy-now-pay-later financing appeals to “people who are more financially strapped and strained,” Adobe analyst Vivek Pandya said in an interview.

Influencers on platforms like TikTok and Instagram will play an increasingly important in helping shoppers discover new products and visit their websites, Adobe said. The firm also said consumers will boost their use of artificial intelligence chatbots and browsers to search for products, especially toys, electronics and jewelry. Shoppers visiting a retail website via an AI-powered portal tend to spend more time exploring the site and clicking through various pages than those referred by advertisements or other means, Adobe said.

--With assistance from Paige Smith.