E-Commerce Merchants Can Expect a Better Holiday Season This Year, ACI Predicts

Consumers are projected to be shopping more online this holiday shopping season, compared to the same period a year ago. Data released Tuesday by payments-technology provider ACI Worldwide Inc. projects a 15% increase in e-commerce transactions from October through December, compared to the same period in 2021. The projected increase is good news for merchants as consumers grapple with inflation and merchants still face inventory shortages, according to ACI.

The increase will be driven primarily by fashion and home and furnishing sales, ticketing and travel bookings, and iGaming, according to ACI. Discounts and offers, as well as buy online, pick up in store hybrid offerings, will also continue to drive online transactions, ACI says.

“This year’s focus has been more on discretionary spending,” Basant Singh, head of merchant for ACI Worldwide, tells Digital Transactions News by email. “Overall, we’re seeing shoppers spend more on experiences rather than physical items as pent-up demand for travel, events, and concerts remains strong post Covid.”

Nevertheless, Singh cautions that consumers are expected to be more price-conscious this year as inflation and economic uncertainty loom.

E-commerce transactions between Thanksgiving and Cyber Monday, a key period during the holiday season for merchants, are projected to increase 10% overall compared to 2021. Transactions on Thanksgiving are projected to rise 9% from a year ago, while volume on Cyber Monday is projected to increase 5%, ACI says. Other shopping days projected to see large increases from a year ago are Christmas Eve (16%) and Christmas day (8%).

Besides an overall increase in e-commerce transactions, ACI projects mobile payments will grow 5% during the 2022 holiday season, compared to the same period in 2021. In addition, the average ticket value is expected to grow 45% to $123, according to ACI. Digital wallets are expected to be a popular payment method, with a projected 11% increase in transactions during the holiday shopping season, compared to last year.

“Mobile payments have increased nearly 12% from January through September 2022 vs. the same period in 2021, with the average ticket value increasing by 98% to $114,” Singh says. “This is due in large part to increased adoption of alternative payment methods such as mobile wallets and digital currencies, which will continue to increase as mobile-shopping experiences become smoother and safer for customers.”

Gaming and retail are projected to post the highest increases in average ticket values, growing 109% and 48%, respectively. Average tickets for telco and travel and ticketing are projected to increase 30% and 14%, respectively.

The average value for e-commerce purchases financed with buy now, pay later loans is projected to increase 10% for the holiday shopping season, compared to the same period in 2021. 

“BNPL allows consumers to pay for their purchases in installments, or over time, often with no interest or fees,” says Singh. “Some BNPL providers also allow customers to pay in full after they’ve received the goods—effectively a try before you buy option.”

The persistent shortage of goods due to supply-chain constraints is expected to give consumer spending on gift cards a lift. Average ticket values for gift card purchases are projected to increase two-fold this holiday season, compared to last year, ACI says. 

Buy online, pick up in-store transactions will increase 9% compared to last year, as consumers embrace that option to save on shipping charges, according to Singh. 

Despite the positive projections for holiday e-commerce transactions, fraud is expected to remain a problem. Between January and September, so-called friendly fraud increased 22% in dollar value, and the average transaction value grew 39%, compared to the same period in 2021, according to ACI. Account-takeover fraud also doubled in the time frame, compared to 2021. 

“We’re seeing a significant increase in the average ticket value of friendly fraud, indicating that fraudsters are targeting high-value items like electronics and travel,” says Erika Dietrich, head of fraud management and payments analytics for ACI, in a prepared statement. “We expect this trend to continue into the 2022 holiday season, and encourage merchants and shoppers to be vigilant.”