Holiday shoppers spent a record amount online, searching out deals amid economic anxiety

Consumers splurged last holiday season, lured by bargains even as they worried about growth and inflation.

Online shoppers spent a record $257.8 billion during the holiday season getting deep discounts on electronics, sporting goods and appliances, according to Adobe data.

The San Jose company, which analyzes online transactions on its Adobe Analytics platform, said Wednesday that online consumer spending from Nov. 1 to Dec. 31 jumped nearly 7% in the United States compared to the same period a year earlier. The data provides insight into the impact of the U.S. economy on e-commerce.

Amid anxiety over inflation, tariffs and layoffs, shoppers continued to open their wallets, especially on Cyber ​​Monday, the biggest e-commerce day of the season. Consumers spent $14.25 billion that day.

Many shoppers also expected deeper discounts on Black Friday and Thanksgiving.

“We’ve seen a real acceleration in growth during this time, especially in an environment where consumers are very price conscious,” said Vivek Pandya, director of Adobe Digital Insights.

Shoppers received discounts on higher-priced items such as electronics, furniture and appliances, boosting their total spending during the holidays.

Some bought electronics at 30% of the listed price and used payment methods that allowed them to buy gadgets such as smartphones but pay later.

The rise of chatbots, powered by artificial intelligence, and the popularity of social media shopping have led consumers to rely more on technology to find products and deals.

“We have a consumer who was still willing to spend this holiday season if they thought the price was right,” Pandya said.

Adobe has seen an increase in people using smartphones to shop and AI chatbots to research products and search for deals. Traffic from AI sources had a higher conversion rate than traffic from non-AI sources, he said.

Consumers might find AI more useful when researching more expensive products, such as electronics or appliances, which involve comparing various features.

Consumers spent more on items such as video games, smart watches, refrigerators and other expensive household items, while also purchasing less expensive items such as puzzles and Christmas decorations.

Some of the best-selling toys included Lego Icons sets and “Wicked” dolls, as well as game consoles and video games.

Cutting-edge tech products included the Apple Watch Series 11 and Ray-Ban Meta glasses, Adobe found.

Online e-spending totaled $59.8 billion, up about 8% from the same period last year.

Adobe doesn’t break down the data by state, but other studies predicted an increase in consumer spending in California. Accounting firm KPMG found that consumers planned to spend more because they feared having to pay later due to inflation.

Around 72% of consumers surveyed by KPMG in the Pacific region – which includes California, Oregon, Washington, Hawaii and Alaska – cited inflation as a major concern last year.

Meanwhile, economists have described the U.S. economy as “K-shaped” illustrating the disparity between the rich who have more money to spend and the poor who are more cautious about their finances.

In December, Bank of America released a report showing that higher-income households not only saw their after-tax wages increase, but also increased their spending year-over-year by 2.6%. Low-income groups increased their spending by 0.6%.

Historically, online shoppers have been wealthier, Pandya said. But some consumers also view online shopping as a way to find better deals because it’s easier to compare prices from different retailers without having to walk into a store.

He predicts that consumers might still consider spending during major events such as Valentine’s Day or Mother’s Day, when retailers offer discounts.

“It might encourage them to continue spending,” Pandya said. “We’ll see what the January data looks like as it starts coming in.”