Adobe has released its online retail insights for the 2022 holiday season, covering the period from November 1 to December 31. Based on Adobe Analytics data, the report provides the most comprehensive view into US eCommerce. It analyses commerce transactions online, covering one trillion visits to US retail sites, 100 million SKUs and 18 product categories. Adobe Analytics is part of Adobe Experience Cloud. It is used by 85% of the top 100 US internet retailers to deliver, measure and personalise shopping experiences online.
Consumers spent a total of $211.7 billion online from November 1 to December 31, growing 3.5% year-over-year (YoY). Adobe suggests this sets a record for eCommerce. Cyber Week (the five days between Thanksgiving and Cyber Monday) was a key contributor. Cyber Week drove $35.3 billion in online spend, and grew 4% YoY; shoppers hit the buy button all season long. 38 days surpassed $3 billion in daily spend this holiday season, on par with last year. For comparison, only 25 days in the 2020 season surpassed $3 billion.
The resilient holiday season was driven by demand for toys, where online sales grew 206% compared to pre-season levels in October 2022. Video games were up 115% and apparel/accessories (up 94%). Sub-categories that saw strong demand include watches (up 108%), baby toys (up 101%), gift cards (up 98%), cosmetics (up 90%), outdoor grills (up 86%), speakers (up 76%) and smart home products (up 67%).
Big discounts drew in price-sensitive shoppers
Across major eCommerce categories, discounts hit record highs this holiday season. Shoppers found great deals in toys, where discounts peaked at 34% off listed price (vs. 19% in 2021). Electronics at 25% (vs. 8%). Discounts were strong across other categories including computers at 20% (vs. 10%), apparel at 19% (vs. 13%), televisions at 17% (vs. 11%), appliances at 16% (vs. 4%), sporting goods at 10% (vs. 6%), and furniture at 8% (vs. 2%).
“At a time when consumers were dealing with elevated prices in areas such as food, gas and rent. holiday discounts were strong enough to sustain discretionary spending through the entire season,” said Vivek Pandya, lead analyst, Digital Insights at Adobe. “The big deals drew in consumers and drove volume. This helped retailers who were challenged with oversupply issues, particularly in categories such as apparel, electronics and toys.”
Additional Adobe analytics insights
Mobile shopping: This holiday season, 47% of online sales came through smartphones (up from 43% in 2021). Christmas Day (December 25) set a new mobile record, driving the majority of online sales at 61% (up from 58%). In Cyber Week, 51% of sales came through smartphones (up from 46%). For years, retailers have struggled to move the needle on mobile shopping. The strong growth this season shows that investments made in improving the experience are beginning to pay off.
Buy Now Pay Later: In an uncertain economic environment, shoppers have explored new ways to manage their budgets. In the holiday season overall, Buy Now Pay Later (BNPL) orders rose 4% when compared to 2021. Revenue, however, decreased by 2%, indicating that shoppers are increasingly using BNPL for smaller shopping carts.
Curbside pickup: The fulfilment method was used in 21% of online orders this holiday season (for retailers that offer the service). This was down slightly from 23% in the year prior. From December 22 to December 23 (right before Christmas Eve), curbside pickup peaked at 42% of online orders. Many anxious shoppers used the service to get gifts in time. Curbside has cemented itself as a major fulfilment method, providing brick-and-mortar retailers with new ways to drive value from physical storefronts.
Impact of marketing investments: Across major marketing channels, paid search remained the biggest driver of sales for retailers this holiday season. (29% of online sales are attributable to that channel). Direct web visits (19%), organic search (17%), affiliates/partners (16%) and email (15%) were also major contributors. Revenue directly attributable to social media remained at less than 3% of total sales this season. However, that share has grown 24% YoY.
The impact of inflation
This holiday season, strong consumer spending online has been driven by net-new demand, and not simply higher prices. The Adobe Digital Price Index (DPI), which tracks eCommerce prices across 18 categories, shows that prices online have been falling YoY since September 2022. Adobe figures are not adjusted for inflation. However, if online inflation were factored in, there would still be growth in underlying consumer demand.
Enterprise Times: What this means for business.
Recession… what recession! The figures from Adobe’s US Holiday shopping report show buoyant figures for online sales across several categories. Despite continued supply chain issues, global recession, and rising energy prices, US consumers continued online spending during the holiday season. Recent retail developments such as curbside pickup and Buy Now Pay Later are now firmly entrenched in consumer behaviours. However, what is interesting about the data is the continued rise of mobile commerce. Nearly half of all digital purchases were undertaken on mobile devices. During Cyber Week, 51% of sales came through smartphones. Retailers and brands have to re-orientate their digital strategies to mobile commerce. Ensuring that all digital designs, user experience initiatives and online marketing takes a mobile-first approach.
