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Data from Adobe Analytics shows that online spending during the holiday season increased 8.7% compared with last year, as promotions and the use of artificial intelligence chatbots helped stimulate purchases.
Sales on retailer websites and apps According to Adobe, the total value from November 1 to December 31 was $241.4 billion. The company’s analysis includes more than 1 trillion U.S. retail website visits, 100 million unique items and 18 different product categories.
Adobe said more demand, not higher prices, drove the increase in online spending. Adobe’s Digital Price Index found that e-commerce prices have declined month-on-month for 27 consecutive months. The company’s figures are not adjusted for inflation, but if revised, overall consumer spending would be higher.
E-commerce results are a promising sign For retail, the industry has yet to report company-specific sales. Walmart, Target, macy’s department store Other companies will begin reporting fourth-quarter earnings in late February, including sales during the key shopping season.
Other early readings for the holiday season also look strong. U.S. holiday quarter retail sales, excluding auto sales, A year-on-year increase of 3.8% That’s according to Mastercard’s SpendingPulse data, which measures in-store and online sales across payment types from Nov. 1 to Dec. 24.
Data from Adobe shows that deep discounts fuel holiday shoppers’ desire to spend. Adobe data found that for every 1% decrease in general prices, product demand increased by approximately 1% compared with the 2023 holiday season. This resulted in an additional $2.25 billion in online spending.
Vivek Pandya, principal analyst at Adobe Digital Insights, said that as grocery and housing prices continue to rise, consumers are waiting to buy non-essential items at a time of year when they expect to spend less. He describes this model as “event-based buying.”
For example, he said shoppers opened their wallets during Amazon’s Prime Day event in the summer or during sales days like Presidents Day and Memorial Day.
“There are certain moments and certain opportunities where we see them overestimating their spending and really pushing forward because they see value,” he said. “And then outside of those periods, we start to see growth there. “
The best online deals during the holidays are concentrated in the electronics category, with discounts up to 30.1% of the list price; toys, with price reductions of up to 28%; TVs, with discounts of up to 24.2%; and clothing, with price reductions of up to 23.2%.
Electronics, apparel, and furniture and homewares are the top three categories during the holiday season, accounting for about 54% of total online spending, according to Adobe. However, the largest year-over-year spending increases came from groceries, which rose nearly 13% to $21.5 billion, and cosmetics, which rose 12.2% to $7.7 billion.
artificial intelligence effect
One of the new factors driving spending is AI-powered shopping assistants, e.g. ChatGPT and its competitors.
Retail website traffic from artificial intelligence-driven generative chatbots surged compared to last year’s holiday season, according to Adobe, as more shoppers turn to the technology to find gift ideas and guide them to cheaper purchases. An increase of 1,300%. This data only includes external chatbots, not those offered by retailers on their own apps or websites.
Pandya said that while the technology is still young and the user base is still limited, these chatbots are becoming a more meaningful driver of clicks and purchases on retailers’ websites.
Pandya said: “Consumers are very strategic and they think carefully about their strategies, including where to buy, when to buy, what offers the best price, etc. And that’s where the generated AI source, the assistant, comes in. ” to help consumers and guide this journey together. “
For many shoppers, smartphones play a central role. The majority of e-commerce purchases this season (nearly 55%) were made via smartphones rather than laptops or other devices. That’s up from about 51% during last year’s holiday season, Adobe found.
Usage of “buy now, pay later” credit options, which allow shoppers to spread purchases over multiple payments, contributed $18.2 billion to online spending during the holiday season, up 9.6% year over year. According to Adobe, this is an all-time high for the holiday season. Cyber Monday was the highest buy now, pay later day on record, with $991.2 million spent.
