Online Holiday Sales Hit Record High

Online spending during the holiday season hit a record high as more consumers went digital to meet their gift giving needs, according to a new report from Adobe.

Covering a period from November 1 through December 31, consumers spent $222.1 billion online, an increase of 4.9% year-over year. Shoppers got out early, with a total of $123.5 billion spent in November, up 6% year-over-year. Adobe said strong November sales were bolstered by a strong Cyber Week, which drove $38 billion in spending, up 7.8% from 2022. 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.  

While consumers showed a strong appetite to shop online, many gave 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 14% year-over-year and representing $2.1 billion more than the last holiday season. 

November was the biggest month on record for the payment method and Cyber Monday was the biggest day on record ($940 million). 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% year-over-year 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 spending online during big days like Cyber Monday and Black Friday, and a record 11 days that surpassed $4 billion in daily spend this season.” 

Of the $222.1 billion spent online this holiday season, more than 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, Adobe said.

Additional Adobe Analytics insights include:

• 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, driving 36.8% of online orders. 

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% year-over-year.