Holiday Shopping Season Sees Significant Online Growth
The 2023 holiday shopping season saw a remarkable 8.7% increase in online spending compared to the previous year, according to Adobe Analytics. This surge was driven by attractive deals and the increasing use of AI-powered chatbots, which helped inspire purchases.
Deals and Discounts Drive Sales
Sales on retailers’ websites and apps totaled $241.4 billion from November 1 to December 31, with more demand rather than higher prices driving the growth. In fact, Adobe’s Digital Price Index found that e-commerce prices have been falling every month for 27 months. Deep discounts motivated holiday shoppers to spend, with every 1% drop in price leading to a 1% increase in demand.
Top Categories and Trends
Electronics, apparel, and furniture and home goods were the top categories for the holiday season, contributing to about 54% of total online spending. However, the biggest year-over-year spending growth came from groceries, which jumped nearly 13% to $21.5 billion, and cosmetics, which shot up by 12.2% to $7.7 billion.
AI-Powered Shopping Assistants on the Rise
One of the newer factors influencing spending is AI-powered shopping assistants like ChatGPT and its competitors. Traffic to retail sites generated by these chatbots increased by 1,300% compared to the previous year, as shoppers turned to them for gift ideas and cheaper alternatives.
Smartphones Play a Central Role
Most of the season’s e-commerce purchases – nearly 55% – took place through smartphones, up from about 51% in the previous year. This highlights the importance of mobile shopping during the holiday season.
Buy Now, Pay Later Option Gains Popularity
The use of buy now, pay later, a credit option that allows shoppers to split their purchase into multiple payments, rose 9.6% year over year and contributed to $18.2 billion in online spending during the holiday period. Cyber Monday was the biggest day on record for buy now, pay later, with $991.2 million in spending.
Retail Industry Outlook
These e-commerce results are a promising sign for the retail industry, which will start reporting company-specific sales in late February. Other early indicators of the holiday season have also looked strong, with retail sales rising 3.8% year over year for the period from November 1 through December 24, according to Mastercard SpendingPulse.
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