US online spending rose nearly 9% through the 2024 holiday season, with shoppers increasingly buying products comparable to TVs and LEGO sets on their smartphones, data from Adobe Analytics showed on Tuesday.
Holiday spending from Nov. 1 through 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 through the same period grew 4.9%.
Retailers, including Walmart and Goal, spent more on ads, offered early discounts and targeted promotions, and used artificial intelligence to drive sales during a shorter holiday season and attract bargain-hungry customers.
But, the higher-than-forecast jump in online spending may not translate into profits for retailers, said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wis.
Walmart, Goal, Macy’s and other major retailers don’t report on the complete results of the vacation season until later this winter.
“I’m a bit of nervous going into earnings season to see if the massive gains online translate into big profits for retailers,” Jacobsen said, adding that the discounts that drove sales can eat into margins.
In line with Adobe, 54.5% of online shopping transactions took place through a smartphone this holiday season, compared with 51.1% in the identical 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 lean on AI-powered services to buy more efficiently,” said Vivek Pandya, lead analyst, Adobe Digital Insights.
Increasing reliance on AI-powered chatbots comparable to Amazon’s Rufus for product recommendations and shopping assistance drove a 1,300% rise in customer traffic to retail sites, in line with Adobe, which tracks e-commerce by monitoring online transactions across web sites by accessing data from 85% of the highest 100 US web retailers.
Salesforce data also showed that AI-powered chatbots and other shopping features helped consumers purchase and return products through the 2024 holiday season.
Together with convenient shopping and free delivery options, flexible payment methods, comparable to buy-now-pay-later (BNPL) services, also grabbed the eye of price-sensitive customers, Adobe said.
For the 2024 holiday shopping, BNPL usage accounted for $18.2 billion in online spend, up 9.6% from the last season.
