(NEW YORK) — Online holiday shopping soared to a fresh record high in 2024, driven by an array of e-commerce discounts and adoption of AI-fueled shopping assistants, according to data released on Tuesday by Adobe.
E-commerce sales topped $240 billion in November and December, climbing nearly 9% when compared with the gift-buying season a year prior, data showed.
The data indicated that three product categories accounted for more than half of the online holiday spending: electronics, apparel and home goods.
Spending on cosmetics totaled nearly $8 billion, jumping more than 12% compared to a year prior. That marked the largest year-over-year spending increase for any product category, the data showed.
Discounts helped drive strong sales for some high-priced items, Adobe said, pointing to a 20% jump in units sold for expensive goods.
The fresh data indicated a spike in use of shopping assistants powered by generative AI, suggesting the technology has seeped into the retail sector’s busiest time of the year.
Traffic to retail sites from generative AI-powered chatbots skyrocketed 1,300% over November and December when compared to the same period a year prior, the data showed.
The share of consumers arriving via AI shopping assistants remains modest, however, Adobe said. Shoppers arrived at retail sites via links shared by the chatbots.
“The 2024 holiday season showed that e-commerce is being reshaped by a consumer who now prefers to transact on smaller screens and lean on generative AI-powered services to shop more efficiently,” Vivek Pandya, a lead analyst at Adobe Digital Insights, said in a statement.
The e-commerce data comes weeks after initial indicators pointed to a robust holiday shopping season.
Overall holiday spending surged in 2024, blowing past expectations and outpacing customer purchases over the gift-buying season last year, according to data released by Mastercard SpendingPulse last month.
The end-of-year flex of consumer strength marks the latest indication of resilient U.S. buying power, which has kept the economy humming despite a prolonged stretch of high interest rates.
Gross domestic product grew at a solid 2.8% annualized rate over three months ending in September, the most recent quarter for which data is available.
The labor market has slowed but proven sturdy. The unemployment rate stands at 4.2%, a historically low figure.
Consumer spending accounts for nearly three-quarters of U.S. economic activity.
The increase in holiday spending coincided with an initial bout of relief for borrowers, as the Federal Reserve cut interest rates by a total of one percentage point over the final few months of the year.
However, interest rates still stand at a historically high level of between 4.25% and 4.5%.
Lower interest rates typically stimulate economic activity by making it easier for consumers and businesses to borrow, which in turn fuels investment and spending. But interest rate cuts usually influence the economy after a lag of several months, meaning the recent lowering of rates likely had little impact on holiday spending.
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