The stage was set for a strong online holiday season, thanks to strong e-commerce growth, national consumer confidence and consumers' willingness to buy online. These are the results of Internet Retailer's analysis of the holiday season thus far, including Thanksgiving weekend sales, consumer purchasing habits and 2018 holiday season projections.

Consumer confidence

Consumer confidence, which is based on a survey that measures consumer sentiment on current economic conditions and prospects for the next six months, is at its highest level in 18 years, according to The Conference Board Consumer Confidence Survey. Generally speaking, when people believe the economy is doing well, they feel more secure and are more willing to spend. We expect consumer confidence to maintain at a high level through the end of the year.

 

2018 U.S. e-commerce sales growth

Through the first three quarters of 2018, online sales grew 15.5%, according to our analysis of U.S. Commerce Dept. figures. Growth year-to-date in 2018 is higher than the previous three years. Last year, sales were up 15.2% through the first three quarters, and up 14.6% during the same period in 2016.

More shoppers go online to holiday shop

60% of consumers plan to spend more than half of their holiday shopping online, according to an Internet Retailer and Bizrate Insights survey of consumers in November 2018. And more than 80% plan to spend at least a quarter of their holiday spend online.


Additionally, consumers are more comfortable purchasing gifts online, according to a March 2018 survey of consumers by Internet Retailer and Bizrate Insights. 76% of shoppers planned to purchase more than a quarter of their gifts online this year. That’s up from 73% in the same survey conducted in 2017.

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E-commerce’s performance during the Cyber 5

Internet Retailer estimates e-commerce sales during the five-day period from Thanksgiving Day through Cyber Monday grew 19% to $22.55 billion, up from $18.90 billion in 2017.

Growth exceeded our initial projections last month due to higher-than-expected growth on non-peak days, such as Thanksgiving Day. Based on our analysis of industry data and website traffic, the largest year-over-year gains were on Black Friday and Thanksgiving Day. The big jumps make sense, as the shift from stores to online is the biggest on these days. Black Friday was historically where shoppers headed to stores to snag the best deals. But now we’ve seen many retailers begin their Black Friday deals online as early as Thanksgiving.

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In fact, according to data from Hitwise, traffic and sales started to increase even before Thanksgiving Day, as retailers promote week-long “Black Friday” deals. The Wednesday before Thanksgiving saw daily transactions increase 40% compared with the day before Thanksgiving in 2017, according to Hitwise data. Traffic began increasing the Monday of Thanksgiving week (Nov. 21).

How does Amazon Prime Day stack up?

Amazon.com Inc.’s Prime Day is the retailer’s annual summer sales event held in July. The event began in July 2015 and has already ballooned to a more than $4 billion sales day, according to Internet Retailer’s estimates. Will Prime Day sales affect Cyber 5 sales? The data has yet to suggest that. It may be that the bulk of Prime Day shopping is consumers purchasing goods for themselves rather than holiday gifts. Here’s where Prime Day falls among the largest U.S. shopping holidays.

U.S. total retail sales during the Cyber 5

Internet Retailer estimates total retail sales, which includes sales in stores and online, grew 6% over the five-day period Thanksgiving weekend. That’s above the 4.5% growth of all retail year to date, according to U.S. Commerce Department figures. That suggests e-commerce penetration was roughly 15.2% during the Cyber 5.

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Holiday season 2018 projections

For the overall shopping period, which Internet Retailer defines as November through the end of December, we project shoppers will spend $122.0 billion with online retailers. That’s a 17.4% increase from 2017. Total retail sales will grow 5.9% over the same period. These projections are revised estimates from our holiday 2018 estimates published in September. Figures were revised after stronger-than-expected results during Cyber 5.

E-commerce will represent 16.7% of all holiday spending, according to our estimates, up from 15.2% in 2017. The 16.7% is higher than e-commerce’s usual share of total retail sales, which Internet Retailer estimates is around 13%. Gift-giving lends itself to online shopping, as shoppers may want to browse different sites for ideas and deals. In addition, online retailers increase digital marketing during peak season shopping periods, often leading to more sales online than non-peak periods.

Consumers plan to holiday shop on marketplaces

60% of consumers surveyed planned to purchase from online marketplaces during the holiday season, according to an Internet Retailer and Bizrate Insights survey. Additionally, three of the top 10 shopped sites Thanksgiving weekend were retailers that operate online marketplaces (Amazon, Walmart and eBay), according to a separate survey conducted by Internet Retailer and Toluna.

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