US online spending grew nearly 9% during the 2024 holiday season, with shoppers increasingly buying products such as TVs and LEGO sets on their smartphones, data from Adobe Analytics showed on Tuesday.
Holiday spending from Nov. 1 to Dec. 31 rose 8.7% to about $241.4 billion online, higher than Adobe’s initial forecast of $240.8 billion made in September. In 2023, online spending during the same period increased by 4.9%.
Retailers including Walmart and Target spent more on advertising, offered early discounts and targeted promotions, and used artificial intelligence to boost sales during a shorter holiday season and attract shoppers hungry for bargains.
But the higher-than-expected growth in online spending may not translate into profits for retailers, said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wis.
Walmart, Target, Macy’s and other major retailers don’t report full holiday season results until later this winter.
“I’m a little nervous going into earnings season to see if big gains online translate into big gains for retailers,” Jacobsen said, adding that the discounts that drove sales could result in margins.
According to Adobe, 54.5% of online shopping transactions were made via a smartphone this holiday season, compared to 51.1% in the same period in 2023.
“The 2024 holiday season showed that e-commerce is being reshaped by a consumer who now prefers to transact on smaller screens and rely on AI-powered services to shop more efficiently,” said Vivek Pandya, analyst flagship, Adobe Digital Insights.
According to Adobe, which tracks e-commerce by monitoring online transactions across websites using data from an 85% increase in customer traffic to retail sites such as Amazon’s Rufus, led to a 1,300% increase in AI-powered chatbots. of the top 100 internet retailers in the US.
Salesforce data also showed that AI-powered chatbots and other shopping features helped consumers buy and return products during the 2024 holiday season.
Along with convenient purchases and free delivery options, flexible payment methods, such as buy-now-pay-later (BNPL) services, also attracted the attention of price-sensitive customers, Adobe said.
For holiday shopping 2024, BNPL usage is estimated at $18.2 billion in online spending, up 9.6% from last season.
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