Adobe forecasts record U.S. spending online this holiday season

Can you hear the faint twang of an electric guitar — or perhaps those jingling bells? Though we haven’t even hit October, holiday shopping season (or, as we like to call it, "Jingle Bell Rock season) is rapidly approaching.

And Adobe predicts it’ll be a doozy: Today, the company released its online holiday shopping spending forecast, which expects U.S. online sales to hit $275 billion this year. That’s up 6.7% from last year.

But to get billions of dollars of online sales to actual customers, you need a heck of a lot of fuel. On a high-spending, high-delivery, high-travel kind of season, how does an energy crisis factor in?

As far as consumer sentiment goes, Americans are not in the jolliest of spirits right now.

“As gas prices remain elevated, consumer sentiment continues to drop or stay fairly depressed, because it just makes people feel really bad about the economy,” said Sofia Baig with Morning Consult.

But just because consumers are cranky doesn’t mean they’ve stopped spending. “Discretionary categories still remain strong, said John O'Trakoun a senior policy economist at the Richmond Fed. “The thing that's really surprising is how resilient spending has been in categories that should be really sensitive to high fuel prices.”

O’Trakoun says consumers are still splurging on things like foreign travel, vehicles and eating out — and that bodes well for holiday spending. Though there’s a caveat for low-income consumers, according to Baig. Their budgets are getting tighter.

“There's some household finances pressures that's going on, and that, in addition to gas prices, I think could impact holiday spending going forward,” Baig said.

On the seller side, retailers may feel the pinch this holiday season because of high diesel prices. “The cost of goods and shipping is is higher,” said Debnil Chowdhury, vice president of S&P Global Energy. “And I think the issue is retailers will have to decide: Do they do they pass those costs onto the consumers? If they're selling something that's extremely price competitive, it's harder for them to do that.”

And the holiday shopping season is highly competitive for retailers, according to Vivek Pandya with Adobe. There’s lots of pressure to bring prices down.

“The stakes are very high for these retailers to capitalize on these holiday season sales, to take advantage of this stronger purchase propensity on the part of the consumer. What we're really thinking is that the pricing piece, the shipping piece, all that is going to be very important for the consumer,” said Pandya.

Pandya says he expects retailers to offer discounts of up to 30% online — and retailers will have to manage those price cuts as they also deal with higher diesel-induced shipping costs.