- Adobe Analytics data showed strong spending online during the 2023 holiday season, growing 4.9% year-over-year to $222.1 billion, a new record for e-commerce
- Consumer spending was driven in part by major discounts across categories such as electronics, toys and apparel, as well as increased usage of the flexible ‘Buy Now, Pay Later’ payment method
- Mobile shopping hit a new milestone this holiday season, surpassing desktop for the first time and driving 51.1% of online sales
Strong holiday season online driven by record discounts, ‘Buy Now, Pay Later’
Consumers spent $222.1 billion online from Nov. 1 to Dec. 31, up 4.9% year-over-year (YoY) and setting a new record for e-commerce. A total of $123.5 billion was spent online in the month of November (up 6% YoY), bolstered by a strong Cyber Week—the five days between Thanksgiving and Cyber Monday—which drove $38 billion in spend online (up 7.8% YoY). In December, consumers spent a total of $98.6 billion online (up 3.7% YoY), driven in part by discounts that lingered past Cyber Monday.
Across major e-commerce categories, discounts hit record highs this holiday season. Shoppers found great deals in electronics, where discounts peaked at 31% off listed price (vs 25% in 2022), as well as toys at 28% (vs 34%) and apparel at 24% (vs. 19%). Discounts were strong across other categories including computers at 24% (vs 20%), televisions at 23% (vs 17%), appliances at 18% (vs 16%), sporting goods at 18% (vs 10%) and furniture at 21% (vs 8%).
While consumers showed a strong appetite to shop online, many are giving themselves greater flexibility with their budgets. This holiday season, ‘Buy Now, Pay Later’ (BNPL) usage hit an all-time high, contributing $16.6 billion in online spend, up a significant 14% YoY and representing $2.1 billion more than the last holiday season. November was the biggest month on record for the payment method ($9.2 billion, up 17.5% YoY), and Cyber Monday was the biggest day on record ($940 million, up 42.5% YoY). BNPL saw strong traction leading up to the holiday season as well: Year-to-date (Jan. 1 to Dec. 31), the payment method drove $75 billion in online spend, up 14.3% YoY and $9.4 billion more than 2022.
"In an uncertain demand environment, retailers leaned on discounting and flexible payment methods to entice shoppers this holiday season,” said Vivek Pandya, lead analyst, Adobe Digital Insights. “The strategy was effective, driving record spend online during big days like Cyber Monday and Black Friday, and a record 11 days that surpassed $4 billion in daily spend this season.”
Electronics, apparel, furniture, groceries and toys are driving e-commerce growth
Of the $222.1 billion spent online this holiday season, over half (65%) was driven by five categories including electronics ($50.8 billion), apparel ($41.5 billion), furniture ($27.3 billion), groceries ($19.1 billion) and toys ($7.7 billion). These categories have become key growth drivers in the digital economy.
Within the electronics category, top sellers this holiday season included TVs, smart speakers, tablets, Bluetooth headphones and smart watches. In apparel, pajamas, sneakers and cold weather clothing (fleeces, sweatshirts, base layers) were top sellers. Barstools, throw pillows and Christmas décor were popular in the furniture and home category. Top toys this season included Barbie products, Disney Little People, Uno Show No Mercy, KidKraft Playsets and Squishmallows. In video games, Super Mario Bros. Wonder, Spiderman 2 and Call of Duty: Modern Warfare III were hot sellers, and the Nintendo Switch, PlayStation 5 and Xbox Series X were top gaming consoles. Other hot sellers this season included skin care serums and moisturizers, cordless and robot vacuums and small kitchen appliances (coffee makers, air fryers, instant pots).
Additional Adobe Analytics Insights
- Mobile shopping overtook desktop: This holiday season, mobile hit a new milestone with 51.1% of online sales coming through smartphones (up from 47% in 2022). Mobile shopping was highest on Christmas Day (Dec. 25) driving 63% of online sales (61% in 2022); As consumers spent time with friends and family, many used their smartphones to take advantage of final deals or to redeem gift cards. Strong mobile growth in recent years has made this a key channel for retailers moving forward.
- Curbside pickup remains popular: The fulfillment method was used in 18.4% of online orders this holiday season, for retailers that offer the service (21% in 2022). Now with roughly one in every five orders online utilizing curbside pickup, consumers have shown that this fulfillment method continues to provide value, especially for shoppers who value the speed and convenience. This season, curbside pickup peaked from Dec. 22 to Dec. 23 (right before Christmas Eve), driving 36.8% of online orders as anxious shoppers used the service to make sure they got gifts on time.
- Retailers’ marketing investments: Across major marketing channels, paid search remained the biggest driver of sales for retailers this holiday season (29.4% of online sales attributable to that channel). Direct web visits (19.3%), affiliates/partners (16.6%), organic search (15.9%) and email (15.3%) were also major contributors. Revenue directly attributable to social media remained at less than 5% of total sales this season, but that share has grown 5% YoY.
Impact of inflation
Strong consumer spending this season has been driven by net-new demand, as opposed to higher prices. The Adobe Digital Price Index, which tracks online prices across 18 product categories (complements the Bureau of Labor Statistics’ Consumer Price Index, which also includes prices for offline only products and services like gasoline and rent) shows that e-commerce prices have fallen for over a year now (down 5.3% YoY in December 2023). Adobe’s numbers are not adjusted for inflation, but if online inflation were factored in, there would be even higher growth in topline consumer spend.
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*Per the Digital Commerce 360 Top 500 report (2021)
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