Holiday online spending saw a significant boost this past season, growing 8.7% compared to last year. Data from Adobe Analytics reveals that consumers spent a staggering $241.4 billion on online purchases between November 1 and December 31, fueled by deep discounts and the increasing use of AI-powered shopping assistants.
A Record-Breaking Season for E-Commerce
Adobe’s analysis, which included over 1 trillion retail site visits and data from 18 product categories, shows that demand — not inflation — powered the increase. Despite rising costs for essentials like groceries and housing, e-commerce prices fell every month for 27 months, making this holiday season particularly appealing for budget-conscious shoppers.
“Consumers are waiting to buy nonessential goods during specific periods when they expect discounts,” noted Vivek Pandya, lead analyst for Adobe Digital Insights. This “event-ized buying” phenomenon has been seen during sales events like Amazon Prime Day and Cyber Monday.
Deep Discounts Drive Consumer Behavior
Deep discounts played a pivotal role in encouraging spending. Electronics led the way, with discounts peaking at 30.1%, followed by toys (28%), TVs (24.2%), and apparel (23.2%). Categories like electronics, apparel, and home goods accounted for 54% of total online spending. However, groceries and cosmetics saw the largest year-over-year growth, jumping nearly 13% and 12.2%, respectively.
The AI Revolution in Holiday Shopping
A standout trend this season was the impact of AI-powered shopping assistants like ChatGPT. Adobe reported a 1,300% increase in traffic from generative AI tools, as shoppers used these technologies to discover gift ideas and locate the best deals. Pandya highlighted the growing influence of AI, stating, “These assistants are helping consumers and co-piloting their shopping journeys.”
Mobile Shopping and Flexible Payments on the Rise
Smartphones played a central role in e-commerce, accounting for nearly 55% of purchases, up from 51% last year. Additionally, buying now, pay later (BNPL) services surged by 9.6%, contributing $18.2 billion in spending. Cyber Monday alone saw $991.2 million in BNPL purchases, setting a record for the holiday season.
Promising Signs for the Retail Industry
The strong online performance bodes well for retailers like Walmart, Target, and Macy’s, which are set to report their fiscal fourth-quarter results in February. With holiday spending trends highlighting deep discounts and AI as key drivers, the retail landscape is evolving rapidly to meet the needs of tech-savvy and strategic consumers.
As shoppers increasingly turn to AI tools and embrace mobile and flexible payment options, the holiday season’s online spending success signals a bright future for e-commerce innovation and consumer engagement.
