Holiday Shopping Season Records $241.4 Bn In Online Sales, Up 8.7% YoY: Adobe

The 2024 holiday season witnessed an unprecedented surge in online shopping, with consumers spending a record USD 241.4 billion between November 1 and December 31, 2024. According to Adobe’s latest report, the ecommerce boom represented an 8.7 per cent year-over-year (YoY) increase, with mobile devices leading the charge as the preferred shopping platform.

For the first time, mobile transactions accounted for the majority (54.5 per cent) of online purchases, marking a significant leap from 2023’s 51.1 per cent. On Christmas Day alone, mobile shopping peaked at 65 per cent, underscoring a growing reliance on smartphones for last-minute purchases. Adobe’s analysis, derived from over 1 trillion visits to U.S. retail sites and encompassing 100 million SKUs across 18 product categories, positions this season as a milestone for the ecommerce industry.

Mobile Dominance & Sector-wise Growth

Electronics, apparel, and furniture/home goods dominated holiday spending, collectively contributing to over half (54 per cent) of the total sales. Electronics emerged as the top-performing category, generating USD 55.3 billion (up 8.8 per cent YoY), followed by apparel at USD 45.6 billion (up 9.9 per cent YoY). Grocery and cosmetics saw the highest growth rates, rising by 12.9 per cent and 12.2 per cent YoY, respectively, as consumers increasingly embraced online platforms for these essentials.

Other categories, including sporting goods (USD 7.8 billion, up 7.4 per cent YoY) and toys (USD 8.2 billion, up 7.8 per cent YoY), also posted strong growth. Popular products ranged from smartwatches and puffer jackets to LEGO sets and video game consoles, showcasing a diverse consumer appetite.

Discounts Drive Consumer Spending

Competitive pricing played a pivotal role in bolstering sales, with significant discounts across key categories. Electronics saw price cuts of up to 30.1 per cent, while toys and apparel were discounted by 28 per cent and 23.2 per cent, respectively. Televisions, appliances, and sporting goods also recorded their highest-ever markdowns, further incentivising consumers.

This aggressive pricing strategy led to a notable shift toward higher-ticket items. For instance, the share of premium products sold increased by 54 per cent in sporting goods and 48 per cent in electronics. Analysts noted that each 1 per cent reduction in price corresponded to a 1.029 per cent rise in demand, collectively adding USD 2.25 billion to overall holiday spend.

Generative AI & BNPL Shape New Trends

Generative AI-powered chatbots emerged as indispensable shopping assistants, with a staggering 1,300 per cent increase in retail site traffic driven by these tools. Cyber Monday alone saw a 1,950 per cent surge in chatbot usage. A survey revealed that 70 per cent of consumers using AI tools found their shopping experience enhanced, citing features such as deal discovery and product recommendations.

Flexible payment methods like ‘Buy Now, Pay Later’ (BNPL) also gained traction, contributing USD 18.2 billion in online spend—up 9.6 per cent YoY. Notably, 79.1 per cent of BNPL transactions were executed via smartphones, indicating a synergy between mobile shopping and alternative payment models.

Insights Into Consumer Behaviour

Adobe identified several hot sellers this season, from Dyson Airwraps and espresso machines to Harry Potter toys and smartwatches. Influencers played a growing role, driving 17.6 per cent of revenue through affiliate marketing—a 6 per cent YoY increase. Gen Z shoppers, in particular, were nine times more likely to make purchases based on influencer recommendations.

Curbside pickup remained a preferred fulfillment method for 17.5 per cent of online orders, peaking on December 23 as shoppers sought convenience during the final stretch of the season. Cyber Week also contributed significantly, with USD 41.1 billion in sales across five days, including USD 13.3 billion on Cyber Monday, the season's biggest online shopping day.

Inflation’s Minimal Impact

Despite concerns over inflation, Adobe’s Digital Price Index revealed consistent deflation in ecommerce, with prices declining for 27 consecutive months (down 2.6 per cent YoY in November 2024). This suggests that the surge in consumer spending was driven by genuine demand rather than inflated prices, highlighting the resilience of the ecommerce sector.

Future Opportunities

Vivek Pandya, Lead Analyst at Adobe Digital Insights, remarked, “The 2024 holiday season showed that ecommerce is being reshaped by a consumer who now prefers to transact on smaller screens and lean on generative AI-powered services to shop more efficiently. This presents opportunities for retailers to innovate and capture the attention of these evolving shoppers.”