The holiday shopping season kicked off with a busy five-day weekend that began on Thanksgiving and wrapped up on Cyber Monday. According to the National Retail Federation, roughly 197 million shoppers participated in the retail frenzy this year, exceeding expectations. The only year that saw more shoppers was 2023, with over 200 million participants.
A significant factor driving retail sales this season has been consumers taking advantage of discounts ahead of potential tariff-related price increases. However, the most notable change has been the acceleration of online spending. According to data, online retail sales this year saw a 14.6% increase on Black Friday, while in-store purchases grew by less than 1%.
On Cyber Monday, consumers spent $13.2 billion, slightly beating expectations. During the busiest hours that Monday evening, consumers were spending $15.8 million every minute. Several trends have contributed to the growth in online spending:
Shoppers used mobile devices to make 57% of online purchases on Cyber Monday, totaling $7.6 billion in transactions, a 13.3% increase from the previous year.
This demonstrates growing consumer confidence in making purchases via mobile devices—up from about one-third of Cyber Monday sales in 2019. Consumers are increasingly adopting buy now, pay later (BNPL) services to facilitate online purchases, with record levels of BNPL implementation seen on Cyber Monday. More than three-fourths of these BNPL transactions were conducted on mobile devices.
Holiday shoppers embracing online convenience
AI-powered chatbots have become a fixture this holiday season, significantly increasing retail site traffic and sales conversions on Cyber Monday compared to last year. Social media influencers have played a significant role, driving a considerable portion of purchases on Cyber Monday.
Influencers have proven to be six times more effective at converting shoppers compared to social media as a whole. One major benefit of online shopping is the ease of comparing prices. Discounts from peak prices are evident in categories such as computers (18%), toys (18%), consumer electronics (17%), TVs (17%), sporting goods (16%), and appliances (14%).
With planned tariffs expected to drive up prices, consumers are capitalizing on online holiday discounts. Online retail ETFs have shown strong year-to-date returns, capturing consumer shopping habits. Payment processors, transaction platforms, and fintech companies are also benefiting from the growth in online spending.
Additionally, ETFs focused on supply chain infrastructure, including warehouses and logistics hubs, provide exposure to the booming e-commerce sector. Record online retail sales are expected to drive U.S. e-commerce sales to $1.2 trillion in 2024. The maturation of online retail, combined with its return to pre-pandemic growth levels, signifies that online shopping will continue to capture market share and transform the retail landscape.
Clearly, holiday consumers are ready to spend, and the primary place they are doing so is online.
