Online holiday sales set record, driven by higher-income shoppers

Deals-driven shoppers broke spending records online from Thanksgiving through Cyber Monday this year, though industry groups say higher earners did the bulk of the buying.

U.S. shoppers spent an unprecedented $41.1 billion online over the five-day period, surging 8.1 percent over last year, according to Adobe Analytics. Monday was the biggest day for online shopping, up 7.3 percent over last year to $13.3 billion. But there was also stronger growth on both Thanksgiving and Black Friday, when shoppers spent $6.1 billion and $10.8 billion, respectively—increases of 8.8 percent and 10.2 percent over last year.

“Early discounts were strong enough that many consumers felt comfortable hitting the buy button earlier on during Cyber Week, with Cyber Monday becoming ‘last call’ for shoppers to take advantage of big holiday deals,” Vivek Pandya, lead analyst at Adobe Digital Insights, said in a statement.

The five-day retail figures underscored a “bifurcation” in shopping patterns between income levels, National Retail Federation chief executive Matthew Shay said Tuesday on a call with journalists. Shoppers from households making $50,000 prefer to hunt for deals in person, he said.

The results reflect a larger trend leading into the holiday shopping period, with industry experts saying households with six-figure incomes waited for bargains on items such as Apple Watches, sneakers and Dyson Airwraps, while lower-income shoppers cut back their gift budgets and prioritized food, essentials and gift cards.

While Black Friday is no longer considered the literal start to the holiday weekend—with sales now starting in October—it’s still the “emotional kickoff,” Shay said.

“It’s a very important five-day period,” he said. “It’s usually a very good indicator of the overall health of the consumer and the economy.”

Though consumer spending has remained resilient in the face of higher wages and a strong job market, Americans are still price sensitive. Factor in higher interest rates and record-high credit card debt, and shoppers are being savvy with their spending: buying earlier, comparing prices and trading down when the price is right.

Approximately 194 million consumers shopped online and in stores over the five-day holiday weekend, according to the National Retail Federation, exceeding the organization’s projections by 14 million. It’s the second-highest turnout ever for the period, the group said, though less than last year’s record 200 million.

Shay said spending is on track to meet the NRF’s projection that in-person and online shopping will climb 2.5 to 3.5 percent, to between $979.5 billion and $989 billion. That’s less than the 3.8 percent increase recorded last year but in line with pre-pandemic growth rates.

Although Adobe said total spending online set a record, the number of Americans who shopped on the internet sank more than 7 percent compared with last year—the lowest turnout since 2018, according to the National Retail Federation.

Estimates of in-person shopping over the five days were mixed.

Phil Rist, executive vice president of strategic initiatives at Prosper Insights & Analytics, said on Tuesday’s retail federation call that there was a “resurgence,” with about 126 million people visiting stores, up from 121.4 million last year.

But separately, Sensormatic Solutions saw overall store visits down 8.2 percent compared with last year, and Justin Post of Bank of America Securities wrote in an analyst note that early sales reduced in-store shopping.

Deals this year were similar to or marginally better than last year, according to data from Adobe and Salesforce. Higher-ticket items such as electronics, appliances and sporting goods saw the best markdowns. Salesforce reported meaningful discounts in general apparel and health and beauty.

Electronics, apparel and furniture have driven more than half of online spending so far this season, according to Adobe. Shoppers have spent $30.1 billion on laptops, digital cameras, televisions, smartwatches, Bluetooth headphones and speakers, a 10.6 percent increase over last year. Grocery sales are also up, surging almost 14 percent to $11.5 billion.

Consumers looking for deals on essentials was also reflected in Shopify’s results: Vitamins and supplements were the hottest category over the sales event.

According to Adobe, some of the top sellers online included Elf on the Shelf dolls; Lego City sets; craft and science kits; board games; the PlayStation 5 and Xbox Series X video game consoles; “Mario Kart 8 Deluxe”; skin-care sets; discounted apparel; bikes; gift cards; and jewelry.