US shoppers continued to demonstrate determination in December to fulfil holiday wishes — and perhaps their own. Consumers pushed online holiday sales for the season 7% higher than last year, according to data from Signifyd.
The overall increase in fourth-quarter sales also surpassed early-season projections and defied conventional wisdom that inflation fatigue would dampen holiday sales in 2023. Since Cyber Week, heavy use of discounts appeared to play a role in consumers’ free-spending ways. This is according to eCommerce data from the commerce protection provider.
Consumers continued big-spender ways in December
December’s sales figures continued the trend of confounding experts’ early expectations. The month’s surge was powered by a 27% year-over-year boost in grocery sales. In addition to a 19% increase in electronics spending and a 14% rise in spending on leisure and outdoor goods.
Like November’s sale surge, December’s surprising results were driven by increased use of discount codes by shoppers willing to spend. This was providing these consumers found a good deal. Discount code use in December was up 14% over a year ago, according to Signifyd data. In all, 23% of online sales in December were accompanied by a discount code. For the fourth quarter as a whole, consumers’ use of discounts increased 20% over 2022. 24% of all sales included a discount.
Consumers returned to pre-COVID buying patterns in 2023
The surprising degree to which overall holiday online sales jumped in 2023 is a testament to the resilience of US consumers. Conventional wisdom before the season kicked off had it that consumers would shop early. They would pull spending forward into October before pulling back and coasting through November and December.
Instead, consumers steadily increased spending month over month during the fourth quarter. Signifyd Chief Customer Officer J. Bennett noted that the pattern was a return to pre-COVID years when the holiday peak shopping season stretched from roughly mid-November to Dec. 20.
“Both we and our merchants were pleasantly surprised by the staying power of consumers throughout peak holiday period,” said Bennett. “This felt like a return to normalcy, with consumers waiting for better deals later in the season. When retailers ultimately offered those deals, consumers responded in a big way.”
Consumers flipped holiday projections
Heading into Q4, Signifyd projected holiday season sales would increase 5% over a year ago. The analysis saw October sales rising 7% year over year before cooling to a 5% increase in November. Furthermore, a 3% jump in December. Instead, online sales in the last three months of the year were up 4%, 8% and 11%. This was good news for eCommerce businesses.
As is always the case, eCommerce fortunes varied by individual retailer and by retail category. Grocery had the strongest Q4, rising 24% over the holiday period in 2022, in part, this was due to higher prices. The category, including alcohol and cannabis products, was up 19% year over year. Leisure and outdoor, electronics and luxury all had strong showings.
Methodology
Signifyd’s Holiday Season Pulse Tracker data is derived from transactions on Signifyd’s Commerce Network of thousands of eCommerce retailers and brands. Commerce Network intelligence also supports Signifyd’s Commerce Protection Platform. This leverages AI-driven machine learning models and data from millions of transactions to detect and block fraudulent activity. Signifyd has seen more than 600 million unique shopper wallets globally.
Enterprise Times: What this means for business
The Federal Government recently announced better than expected unemployment rate at 3.7% with more than 216,000 jobs added in December. So Signifyd’s data indicating December’s 11% online sales growth over 2022 was astonishing. Analysts had given early season predictions that spending would lose steam through the fourth quarter. It was expected the year would end with December seeing 3% growth.
However, determined consumers have proved the analysts and experts wrong. Attracted by big discounts, online sales were pushed up 11% over a year ago. This powered a holiday season that demolished early expectations. Analysts will have to wait for the online sales data of the more established players like Salesforce and Adobe, though Adobe has just published its figures that showed a 3.7% rise year over year. Any robust data in their consumer data will only just support the resilience of US consumers.
