US holiday online retail surges to USD $222.1 billion amid difficult economy

Amidst a challenging macroeconomic environment, U.S. consumers have boosted the online retail sector by driving positive spending growth over the 2023 holiday season (1st November to 31st December). According to data from Adobe Analytics, the industry reaped a total of USD $222.1 billion, marking a year-on-year (YoY) growth of 4.9%. The report offers a broad insight into U.S. e-commerce, analysing over one trillion visits to domestic retail sites, 100 million stock-keeping units (SKUs), and 18 product categories.

Consumer spending was partially driven by major discounts in categories such as electronics, toys and apparel and by elevated usage of the Buy Now, Pay Later (BNPL) payment method. Record-breaking growth was observed in BNPL payments, with USD $16.6 billion transacting over the holiday. Mobile shopping, meanwhile, outpaced desktop for the first time, accounting for 51.1% of online sales, Adobe's data revealed.

The data further showed a total online spend of USD $123.5 billion in November, up 6% YoY. Robust Cyber Week sales buttressed this, the five days between Thanksgiving and Cyber Monday, which brought in USD $38 billion in online spending, a YoY increase of 7.8%. Come December, online consumers spent USD $98.6 billion, a 3.7% YoY rise, spurred partly by discounts that held on past Cyber Monday.

Across several e-commerce categories, discounts reached new peaks this holiday season. Significant deals were found in electronics, where discounts topped at 31% off the listed price, toys at 28%, and apparel at 24%. Discounts were also observed in other categories, including computers (24%), televisions (23%), appliances (18%), sporting goods (18%) and furniture (21%).

Emerging from the data, the holiday season also testified to an all-time high usage of BNPL services, contributing USD $16.6 billion in online spending, a significant 14% YoY rise.

Vivek Pandya, Lead Analyst at Adobe Digital Insights, said, "In an uncertain demand environment, retailers leaned on discounting and flexible payment methods to entice shoppers this holiday season."

The approach successfully fuelled record online spending during big shopping days such as Cyber Monday and Black Friday. Pandya made note of an impressive 11 days that exceeded USD $4 billion in daily spending this season.

Electronics, apparel, furniture, groceries, and toys drove over half (65%) of the USD $222.1 billion online spending this holiday season. Top electronics sellers included TVs, smart speakers, tablets, Bluetooth headphones and smartwatches. Top sellers in apparel were pyjamas, sneakers, and cold-weather clothing.

Other notable sales were recorded in furniture, with popular items being barstools, throw pillows, Christmas decor, and toys, including Barbie products, Disney Little People, Uno Show No Mercy, KidKraft Playsets and Squishmallows.

Additional insights from Adobe Analytics further revealed that mobile shopping eclipsed desktop for the first time this holiday season, with 51.1% of online sales conducted via smartphones. Also, curbside pickup persisted in popularity, being utilised in 18.4% of online orders.

Furthermore, paid search stayed the top driver of sales for retailers, accounting for 29.4% of online sales, with direct web visits (19.3%), affiliates/partners (16.6%), organic search (15.9%) and email (15.3%) also being significant contributors.