Online sales rose 3.5%, boosted by discounts

Online sales rose 3.5% year over year to $211.7 billion during the holiday season, according to Adobe Analytics, as record high discounts prompted shoppers to open their wallets.

According to Adobe, this spending is a new peak for e-commerce sales during the crucial retail season.

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Nevertheless, markdowns played an important role in promoting merchandise. Overall spending was boosted by major shopping holidays, which usually offer the most discounts. Online sales during Cyber ​​Week, the five-day period from Thanksgiving to Cyber ​​Monday, totaled approximately $35.3 billion.

Vivek Pandya, principal analyst at Adobe Digital Insights, said the script has turned since last year. customers were willing to pay more For holiday shopping in 2021 as retailers run low on products. Now, he said, buyers have become more frugal and will hold out for lower prices.

“Retailers really have to adjust to the conditions of consumers now,” he said. “They are in a very different position than where they were during the pandemic, where consumers were trying to get goods as quickly as possible and retailers were really in the driver’s seat.”

Latest holiday numbers arrive as retailers Be prepared for a tough year and watch for signs that some consumers are running out of gas. As inflation remains high, Americans are racking up credit card balances and stashing less money in savings accounts. Sales of some big-ticket items, such as jewelry and consumer electronics, have declined. and retailers have reduced merchandise and returned orders to clear through excess inventory And be prepared for a possible downturn.

Food and housing costs, in particular, have risen in price, draining a large portion of Americans’ budgets. inflation grew less than expected in November But it was still up 7.1% year over year according to the Labor Department.

Online retailers have gotten price-sensitive customers to press the “Buy” button with excessive promotions. According to Adobe, prices slashed on major retailers’ websites during the holidays and discount levels are deeper than ever.

Toy discounts fell 34% off the listed price during the holiday season, up from 19% in the year-ago period. Electronics discounts hit 25%, up from 8% in the year-ago period. And apparel rose to 19% from 13% a year ago.

Adobe found that computers, televisions, appliances, and sporting goods were also more promotional.

According to Adobe’s Digital Price Index, which tracks e-commerce prices across 18 categories, online prices have been declining year over year since September. This means that the 3.5% increase was driven by net new demand rather than increased prices.

Pandya said the deep discounting helped retailers sell off the glut of goods that had piled up in warehouses and store backrooms. many retailers including Target, walmart And Cole’shas faced a jump in inventory levels as popular pandemic categories fell out of favor and inflation weighed on household budgets.

Holiday sales in stores and online rose 7.6% from November 1 to December 24, according to data from Mastercard SpendingPulse, a separate report that includes in-store spending. This figure includes all types of payments and restaurant expenses. It is not adjusted for inflation.

Online sales have become a more meaningful part of holiday spending because of the pandemic, but most sales still happen at stores.

According to MasterCard SpendingPulse, e-commerce accounted for 21.6% of total retail sales during the holidays this year. This is a slight increase from the holiday season in 2021 and 2020, when e-commerce made up 20.9% and 20.6% of total sales, respectively, but a significant jump from the same period in 2019 when it accounted for 14.6% of sales.