Adobe: Holiday online spending rises 4.9%

Overall holiday spending estimates were somewhat tepid when adjusted for inflation, but the online portion of sales transactions between Nov. 1 and Dec. 31 rose 4.9% year over year, according to Adobe Analytics.

Consumers began spending early in the holiday season with online features that raked in $123.5 billion in November, Adobe reports. The five days between Thanksgiving and Cyber Monday accounted for $38 billion in online spending, which set the stage for a slower December, the company reported.

Adobe found online spending rose 6% in November and 3.7% in December compared to the year-ago periods.

Consumers looked for discounts seeking to make their dollars stretch further and they also turned to buy now, pay later options which contributed to an all-time high of $16.6 billion in online spending, which was up 14% from 2022. The rise in buy now, pay later (BNPL) transactions was not a surprise as Adobe predicted in October more consumers would turn to installment payment options for their holiday purchases.

Inflation and high-interest rates have reduced the number of consumers with discretionary budgets, but Adobe predicted that one in five will likely use layaway to buy gifts for the holidays and that online BNPL spending will be 17% higher than last year, hitting $17 billion in November and December.

“Consumers are very price conscious,” Adobe Digital Insights lead analyst Vivek Pandya said in October. “Because of inflation, we’re seeing their debt levels increase and their savings level decrease.”

Adobe also reported that electronics, apparel, furniture, groceries and toys were the top five product categories during the recent holiday season, generating 65% of online spending. The firm found that at nearly $51 billion, electronics took the lead despite predictions the sector would perform poorly this season.

Adobe Analytics, which also tracks online prices, noted that spending increases this season were driven by net new demand rather than higher prices. The latest numbers from the  Adobe Digital Price Index indicated prices decreased 3.6% in November and 5.3% in December compared to a year ago.

Adobe said mobile shopping also hit a new milestone with 51.1% of online sales coming through smartphones during the holiday season. This was up from 47% in 2022. The company reported mobile shopping was the highest on Christmas Day, driving 63% of online sales.

“As consumers spent time with friends and family, many used their smartphones to take advantage of final deals or to redeem gift cards,” the report noted.

Curbside pickup was also popular with consumers during the holiday season. Adobe found that 18.4% of holiday online orders were fulfilled for curbside pickup. This season, curbside pickup peaked from Dec. 22 to Dec. 23 driving 36.8% of online orders as anxious shoppers used the service to ensure they got gifts on time, the report stated.