The year 2023 witnessed an unprecedented surge in e-commerce during the holiday season, according to Adobe. As price-conscious consumers sought out the best deals, online spending experienced a year-over-year increase of 4.9%, reaching a total of $222.1 billion from November 1 to December 31. This growth exceeded Adobe’s initial prediction of a 4.8% increase in sales.
Mastercard also released preliminary data indicating a positive trend in overall holiday sales, encompassing both online and physical retail. Compared to the previous year, holiday sales exhibited a 3.1% rise, with online sales soaring by 6.3% and in-store purchases climbing by 2.2%.
Several product categories were particularly popular among consumers during the holiday season, including electronics, apparel, furniture, groceries, and toys. This aligns with the official retail sales report for November, released in mid-December.
Discounts played a significant role in driving online spending. Consumers enjoyed substantial savings on electronics (31% off listed price), toys (28% off), and apparel (24% off). Consequently, sales during Cyber Week accounted for nearly 20% of the total spend. Cyber Week refers to the five-day period from Thanksgiving to Cyber Monday.
Furthermore, the option to use buy now, pay later (BNPL) gained popularity among shoppers, particularly younger consumers. BNPL saw a record-high usage, contributing $16.6 billion to online spending—a remarkable increase of 14% compared to the previous year.
Vivek Pandya, lead analyst at Adobe Digital Insights, highlighted retailers’ strategies during this uncertain demand environment. By leveraging discounting and flexible payment methods, retailers successfully attracted shoppers during key events such as Cyber Monday and Black Friday.
It is worth noting that Adobe’s data does not account for inflation. However, the surge in spending was primarily driven by “net-new demand” rather than increased prices. According to the Adobe Digital Price Index, which tracks online prices, e-commerce prices experienced a decrease of 5.3% in December 2023.