The holiday season saw a surge in online shopping as price-conscious consumers took advantage of last-minute deals, free delivery, and curbside pickup options. With a compressed holiday shopping period—only 27 days between Thanksgiving and Christmas compared to 32 last year—shoppers increasingly turned to their phones and computers to complete their gift lists. This shift was underscored by a 6.7% year-over-year increase in online spending, outpacing the 2.9% growth seen in in-store sales, according to a Mastercard SpendingPulse report.
Driving Forces Behind the Digital Boom
Retail expert Michael Schulman of Running Point Capital Advisors pointed out that the convenience of online shopping, coupled with fast delivery options and services like “buy online, pick up in-store” (BOPIS), made e-commerce a preferred choice for many. Salesforce reported that BOPIS orders nearly doubled during the weekend before Christmas, accounting for almost 40% of all online orders, reflecting a growing reliance on hybrid shopping models.
Retailers like Walmart and Target capitalized on this trend by bolstering their promotional efforts on platforms such as TikTok and Hulu, emphasizing membership programs and same-day delivery services. FedEx also reported stronger-than-expected delivery volumes during the holiday rush, reinforcing the effectiveness of these strategies.
Disciplined Promotions and Resilient Consumers
Despite a challenging economic environment marked by inflation, retailers maintained disciplined promotional strategies. Steve Sadove, senior adviser to Mastercard and former CEO of Saks, highlighted “real consumer strength” driven by low unemployment and higher wages. While promotions remained at last year’s levels, they were strategic rather than excessive, helping retailers avoid profit erosion.
The results speak for themselves: total holiday spending from November 1 to December 24 increased by 3.8% over 2023, surpassing the 3.2% forecast and last year’s 3.1% growth. Key categories like apparel, jewelry, and electronics saw sales rise 3.6%, 4%, and 3.7%, respectively. Online sales of apparel alone grew by 6.7%, compared to a modest 0.2% increase in stores.
Shifting Consumer Preferences
Shoppers prioritized needs-based purchases, focusing on items like pajama sets, electronics, and athleisure apparel. Aireale Hobbs, a Huntsville, Alabama resident, echoed this sentiment, citing the convenience and competitive deals available through apps like Target’s. Her shopping choices reflect a broader trend of consumers favoring efficiency and value over traditional in-store experiences.
Emerging product categories also played a role in driving sales. Lab-grown diamonds, laptops with new technology, and affordable TVs contributed to the season’s success, illustrating how evolving consumer preferences are shaping the retail landscape.
A New Era for Holiday Shopping
The 2024 holiday season reinforced the growing dominance of e-commerce and the critical role of strategic promotions in driving consumer engagement. Retailers that adapted to these trends by investing in digital marketing, delivery infrastructure, and hybrid shopping models reaped the rewards, proving that convenience and innovation are the keys to success in a competitive market.