Online holiday sales nudged up 3.5% year over year, reaching $211.70 billion in web sales in November and December, according to Adobe Analytics.
This marks the largest ever online holiday season, but substantially slower growth than in recent years. By contrast, from 2018-2021 online holiday season sales increased year over year by an average of over 17%.
Of the 61 days in November and December, shoppers spent more than $3 billion online on 38 days, according to Adobe. This is the same as the 2021 holiday season but an uptick from 2020, when 25 days exceeded $3 billion in online sales. Adobe’s data is based on 1 trillion visits to U.S. retail sites that offer 100 million SKUs in 18 product categories.
The slight growth in online sales for the entire holiday season reflects the turbulent year across the retail industry, with shoppers pulling back on spending due to inflation and other economic concerns. Single-digit growth is a departure from the two previous years, especially early in the COVID-19 pandemic when U.S. ecommerce sales surged upwards of 40% each quarter.
According to ecommerce platform provider Salesforce Inc., online sales rose slightly more than Adobe’s estimates, at a 5% year-over-year growth rate. But the volume of orders was flat year over year, and the number of units per transaction decreased 3.2% year over year, according to Salesforce. Further demonstrating inflation’s impact, Salesforce finds that the average selling price of items increased 5.2% year over year in November-December 2022. Salesforce’s data is based on the activity of 1.5 billion global shoppers.
In some respects, retail growth is normalizing and consumers are returning to their pre-pandemic shopping habits, says Don Davis, editor at large for Digital Commerce 360.
“Comparing 2022 online holiday sales to 2019, we see that the compound annual growth rate comes in at about 14%. That’s just about what ecommerce was growing before the pandemic,” Davis says. “So, COVID-19 didn’t kill stores or accelerate online shopping by several years. Rather, online took market share from brick-and-mortar stores during the pandemic overall, though not in 2022, when consumers returned to stores in large numbers. That shift to online was occurring before the pandemic and likely will continue in the years ahead.”
‘Sigh of relief’ for the 2022 online holiday season
So, while 3.5% industry growth is modest, retailers should be happy that the season produced any growth, says senior consumer insights analyst Lauren Freedman.
“Ecommerce felt a big sigh of relief after the 2022 holidays,” Freedman says. “After bracing for a rough season, retailers are glad to have gotten through it on a somewhat positive note, though of course there was variation in the performance numbers. Now, they are shifting gears in hopes of jumpstarting 2023.”
That’s certainly the case at jewelry merchants The Pearl Source and Laguna Pearl, says Leon Rbibo, president of both online retailers. Online sales increased 12% year over year in Q4 at The Peal Source and 8% year over year at Laguna Pearl, he says.
“We did not see the doom and gloom that much of the industry predicted this holiday season,” Rbibo says.
Similarly, the holiday season had its ups and downs at GiftsForYouNow.com, says Jim Tuchler, president of parent company Techny Advisors LLC. The online gifting merchant did not face the product shortages that plagued it during the 2021 holiday season. Having more merchandise on hand, coupled with slower sales, allowed it to ship packages later into the holiday season.