The Decade’s Final Holiday Shopping Season Proved E-Commerce Dominates

Submitted by Market Crumbs,

As the last holiday shopping season of the decade is now in the books, we are getting a clearer picture of how retailers fared during the busiest shopping season of the year. 

Holiday retail sales rose 3.4% compared to 2018, according to Mastercard SpendingPulse, which tracks spending in Mastercard’s payments network while estimating cash and other payment forms from November 1 through December 24. Not surprisingly, online sales grew at much quicker pace, increasing 18.8% compared to 2018. E-commerce sales accounted for 14.6% of total retail sales during this year’s holiday shopping season.

“E-commerce sales hit a record high this year with more people doing their holiday shopping online,” said Steve Sadove, senior advisor for Mastercard.

“Due to a later than usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers’ demand for the best deals across all channels and devices.”

The growth in online sales this holiday season is hardly surprising. Market Crumbs previously detailed how Black Friday is becoming irrelevant as shoppers increasingly prefer to shop online. Black Friday shoppers spent $7.4 billion online this year, an increase of 19.6% from 2018. The total made it the second-largest online shopping day in U.S. history behind this year’s Cyber Monday, when shoppers spent a record $9.4 billion, an increase of nearly 20% from 2018’s Cyber Monday.

The ease of shopping online is even turning Thanksgiving into a popular shopping day. Online sales on Thanksgiving reached $4.2 billion, marking the first time online sales on Thanksgiving surpassed $4 billion. The total marks a 14.5% increase from Thanksgiving of last year.

Comparing year-over-year overall sales growth to online sales growth in various segments shows just how much consumer shopping preferences have changed compared to the beginning of the decade. The jewelry sector saw overall sales growth of 1.8%, with online jewelry sales increasing by 8.8%. Department stores saw an overall sales decline of 1.8%, while their online sales increased by 6.9%. Overall electronics sales increased by 4.6% as online electronics sales increased by 10.7%.

Along with the rise in online shopping comes an increase in returns. UPS expects to process 1.9 million returns, an increase of 26% from last year and the seventh-consecutive annual record. “This process is a change from years past, when consumers would rush to physical retailers the day after Christmas and stand in long lines to make returns,” UPS said in a statement.

The death of brick-and-mortar retailers, commonly referred to as the “retail apocalypse,” has been a theme for the better part of this decade. As countless retailers have closed thousands of stores, the next decade should see a continuation of this trend and possibly even see it get worse.