2024 Holiday Shopping Season Reveals New E-Commerce TrendsBy Dov Hertz

In the fall of 2024, the National Retail Federation predicted a strong surge in e-commerce activity during the holiday season, projecting an 8% to 9% year-over-year increase in volume–a remarkable dollar increase from $295.1 billion in 2023 to an estimated $297.9 billion in 2024. These numbers underscored the sustained importance of online shopping to consumers, particularly during the peak holiday shopping months.

So it is not surprising that Salesforce’s 2024 Online Holiday Shopping Report confirmed these projections, calling 2024 a record-breaking year for e-commerce. Leveraging data from over 1.5 billion consumers, the report highlighted key trends shaping the e-commerce landscape, with mobile shopping emerging as a dominant force. Notably, during the peak shopping weeks of the season, 69% of online orders were placed via mobile devices.

The convenience and speed of mobile wallets like Apple Pay, Google Pay, and PayPal played a pivotal role in this shift. Notably, the adoption of mobile wallets spiked by 16% immediately following Black Friday, reflecting a growing consumer preference for fast and seamless payment options. At the same time, generative AI enhanced the shopping experience by delivering personalized recommendations and accelerating product discovery, helping consumers navigate the vast array of online offerings with ease.

However, the growth in online shopping also brought challenges, particularly in the area of returns. An estimated $133 billion in online returns this season represented a more than 6% increase compared to 2023. For retailers, this trend underscores the need to streamline return processes to minimize costs while maintaining customer satisfaction.

Adding to these insights, a Mastercard report found that retail sales grew by 3.8% year-over-year from November 1 to December 24, supported by a resilient labor market and gains in household wealth. Consumers showed a willingness to spend but remained focused on finding value, concentrating their shopping during major promotional periods like Black Friday and the weeks leading up to Christmas. The last five days of the season alone accounted for 10% of all holiday spending, highlighting the importance of late-season promotions.

Key trends from the Mastercard report further illuminated consumer behavior during the season:

The Search for Value

Empowered by promotions, consumers sought value at every opportunity. This emphasis on deals was particularly evident during the November shopping period and Black Friday. 

Diverse Spending Patterns

Holiday shoppers balanced their spending between goods and experiences, with restaurant spending growing by 6.3% year-over-year. Gift-giving sectors such as apparel, jewelry, and electronics also saw notable growth, with increases of 3.6%, 4.0%, and 3.7%, respectively. 

Digital-First Shopping

Digital-first strategies continued to shape holiday shopping behaviors. E-commerce sales grew by 6.7% year-over-year, while in-store sales saw a more modest increase of 2.9%. Apparel emerged as a standout sector for online sales, achieving a 6.7% growth rate over 2023.

Regional Variations in E-Commerce Growth

Certain U.S. cities demonstrated exceptional growth in e-commerce sales. Tampa and Phoenix led the way with double-digit growth rates of 10.6% and 10.0%, respectively. Minneapolis (8.9%), Dallas (8.4%), Charlotte (7.9%), Orlando (7.8%), and Houston (7.6%) also outperformed the national average, reflecting regional enthusiasm for digital shopping platforms.

The Role of Promotions

Promotions played a crucial role in driving both online and in-store traffic. Value-conscious consumers responded strongly to deals, compelling retailers to adopt aggressive promotional strategies. By catering to this demand, retailers were able to capture attention across multiple channels, maximizing sales during the critical holiday period.

Looking Ahead

The 2024 holiday season provided valuable insights into the evolving retail landscape. With consumers demonstrating a clear preference for value, convenience, and personalization, retailers must adapt to meet these demands. By embracing digital-first strategies, refining return policies, and leveraging emerging technologies, they can position themselves for continued success in the dynamic world of e-commerce.