US holiday retail sales 2024: what drove the unexpected surge?

December 26, 2024 10:32 PM PST | By Invezz

US holiday retail sales 2024: what drove the unexpected surge? — Image source: Invezz

US holiday retail sales 2024: online sales lead the way

According to Mastercard SpendingPulse, online sales surged 6.7% compared to 2023, significantly outpacing the 2.9% growth in in-store purchases.

Services like “buy online, pick up in-store” (BOPIS) and fast, free delivery played a critical role in driving e-commerce activity.

Salesforce data revealed that BOPIS orders doubled during the weekend before Christmas, making up nearly 40% of all online transactions.

Retailers like Walmart and Target capitalized on this trend, enhancing their digital platforms and advertising on TikTok and streaming services to engage tech-savvy shoppers.

Disciplined promotions, targeted strategies

Unlike previous years marked by deep discounts, retailers maintained a disciplined approach to promotions.

Companies like Walmart, Target, and Dollar General strategically reduced prices and increased advertising to remain competitive.

Target and Dollar Tree shares reflected these efforts, gaining nearly 3% during the peak shopping period.

Bernstein analysts noted that shoppers remained selective, focusing on needs-based purchases.

To entice cautious consumers, Walmart emphasized its rollback pricing, while Target intensified its promotional campaigns.

These strategies paid off, as the last five days of the holiday season accounted for 10% of all spending, highlighting a late surge in consumer activity.

US holiday retail sales 2024: popular categories

Laptops, TVs featuring new technology, and athleisure apparel were among the top-performing categories.

Jewelry and electronics also saw significant growth, with sales rising 4% and 3.7%, respectively, over 2023 levels, according to Mastercard.

Online sales of apparel grew 6.7%, far outpacing the 0.2% growth in physical stores.

Steve Sadove, senior adviser to Mastercard and former Saks CEO, told Reuters that consumer spending remained robust despite inflationary challenges.

“Promotions were controlled. Nothing was extra deep, and there were no panicked promotions. What we saw was real consumer strength,” Sadove was quoted as saying.

He credited low unemployment rates and higher wages for buffering personal finances during the holiday season.

With only 27 days between Thanksgiving and Christmas, five fewer than last year, retailers faced a condensed shopping season.

Many adjusted their strategies to attract shoppers, including increasing ad spend and emphasizing membership perks like quick delivery options.

Retail giants also leveraged lab-grown diamonds and innovative technology in products to appeal to value-driven consumers.

FedEx reported stronger-than-expected holiday delivery volumes, further reflecting the robust demand for online shopping.

The post US holiday retail sales 2024: what drove the unexpected surge? appeared first on Invezz

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