(Source -Adobe Experience Cloud)
In the recent holiday season, Americans exhibited a surge in online shopping, setting a new record by splurging on goods worth $222 billion, as reported by Adobe Analytics on Thursday. The spending spree between November 1 and December 31 marked a 4.9% increase from the preceding holiday shopping season.
Deep discounts and the availability of Buy Now, Pay Later options played a pivotal role in enticing shoppers, according to the Adobe report. Despite survey responses indicating dissatisfaction with the economy, these findings underscore the continued aggressive spending habits of Americans.
Historic online shopping expenditure of $12.4 billion
Notably, Adobe had previously disclosed that Cyber Monday alone witnessed a historic online shopping expenditure of $12.4 billion. To attract consumers, retailers heavily relied on promotions, with online shopping discounts reaching unprecedented levels during this holiday season. Discounts peaked at 31% off the list price for electronics, compared to 25% in 2022, while toy discounts reached 28% (compared to 34% in 2022) and apparel discounts reached 24% (compared to 19% in 2022). The utilization of short-term financing through Buy Now, Pay Later options experienced a significant uptick, increasing by 14% from the previous year to a record-breaking $16.6 billion.
It’s important to note that Adobe reveals figures are not adjusted for inflation. Contrary to price fluctuations, online prices actually decreased by 5.3% year-over-year in December, according to Adobe. This indicates that the upswing in holiday season spending was predominantly driven by heightened consumer demand rather than variations in prices. The robust performance in online shopping during the holiday period further emphasizes the resilience and enthusiasm of American consumers in the face of economic uncertainties.
Online spending surged by 4.9% year-over-year, achieving a holiday season record in e-commerce, driven by enthusiastic shoppers capitalizing on discounts and utilizing buy now, pay later options, as reported by Adobe Analytics. Retailers’ websites and apps witnessed a total sales volume of $222.1 billion from November 1 to December 31, according to Adobe reveals comprehensive data covering over 1 trillion visits to U.S. retail websites, 100 million unique items, and 18 product categories.
A significant factor contributing to the increased spending
Contrary to higher prices, this year’s spending was propelled by increased purchases, reflecting a trend in falling prices across various online product categories, notably electronics. E-commerce prices experienced a continuous decline for over a year, dropping by 5.3% year-over-year in December, according to Adobe Reveals Digital Price Index, tracking online prices across 18 categories. If adjusted for inflation, the growth in online consumer spending during the holiday season would likely be even more substantial.
While robust spending during the critical holiday season could bode well for major retailers like Walmart, Amazon, Target, and Macy’s, the impact on their performance will become clearer during the upcoming fourth-quarter earnings season in February. However, strong online holiday sales do not necessarily guarantee continued consumer spending in the new year, as some shoppers may have stretched their budgets during the peak shopping season and may pull back in the months ahead when bills become due.
One significant factor contributing to the increased spending in November and December was the prevalence of substantial discounts. Adobe reveals findings that discount levels reached record highs during the holiday season, with notable peaks of 31% off the listed price for electronics and 24% for apparel, compared to the peaks of 25% and 19% during the 2022 holiday season, respectively.
