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New Adobe Data Sheds Light on Digital Holiday Sales

Despite concerns about consumer spending amid the current state of the economy, the 2022 holiday season outperformed expectations, with total online sales increasing 3.5 percent year over year to $211.7 billion, Adobe reported Thursday.

Figures initially released in October forecast a 2.5 percent increase in e-commerce spending to $209.7 billion from Nov. 1-Dec. 31.

Apparel and accessories had a strong showing throughout the season, nearly doubling from October preseason levels at a 94 percent pace. The increase in sales was buoyed by the deep discounts that occurred throughout the two-month period, with apparel markdowns averaging 19 percent, an increase over the 13 percent discounts offered the previous holiday. In the case of clothing, retailers used promotions to offload all the stuff that piled up in their stores and warehouses last year.

“At a time when consumers were dealing with elevated prices in areas such as food, gas, and rent, holiday discounts were strong enough to sustain discretionary spending through the entire season,” said Vivek Pandya, lead analyst, Adobe Digital Insights. “The big deals drew in consumers and drove volume, helping retailers who were challenged with oversupply issues, particularly in categories such as apparel, electronics and toys.”

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The numbers came out a week after Mastercard SpendingPulse’s data showed that total retail sales (excluding automotive) across all channels increased 7.6 percent year over year while e-commerce sales jumped 10.6 percent and apparel sales rose 4.4 percent.

Cyber Week, which encompasses the five-day period from Thanksgiving to Cyber Monday, was a key contributor to growth in the two-month period, driving $35.3 billion in online spend and growing 4 percent year over year.

Thirty-eight days surpassed $3 billion in daily spend this holiday season, which equaled last year’s figure. For comparison, only 25 days in the 2020 season surpassed $3 billion.

The resilient holiday season was driven largely by demand for toys, where online sales grew 206 percent compared to October preseason levels. The next-strongest growth category was video games (up 115 percent). Additional sub-categories that saw strong demand include watches (up 108 percent), baby toys (up 101 percent), gift cards (up 98 percent), cosmetics (up 90 percent), outdoor grills (up 86 percent), speakers (up 76 percent), and smart home products (up 67 percent).

Predictably, discounting carried the workload for many of these categories as well, with toys also peaking at 34 percent off their initially listed price, a significant jump from the 19 percent discounts in 2021. Electronics markdowns were 25 percent, ahead of the 8-percent price cuts in the year prior. Discounts were strong across other categories including computers at 20 percent (vs. 10 percent), televisions at 17 percent (vs. 11 percent), appliances at 16 percent (vs. 4 percent), sporting goods at 10 percent (vs. 6 percent) and furniture at 8 percent (vs. 2 percent).

The Adobe Digital Price Index (DPI), which tracks e-commerce prices across 18 retail categories, indicated that prices online have been falling year over year since September 2022, in line with Consumer Price Index (CPI) numbers, which have decelerated for five straight months. This holiday season, Adobe says the strong online consumer spending has been driven by net-new demand, and not just higher prices.

Adobe and Mastercard say their figures are not adjusted for inflation. The Adobe Analytics data covers 1 trillion visits to U.S. retail sites across 100 million SKUs, while Mastercard’s findings are based on aggregate sales activity in its payments network, coupled with survey-based estimates for other payment forms, such as cash and check.

Mobile sales continue to tick up, with 47 percent of e-commerce sales coming through smartphones—up from 43 percent in 2021. Christmas Day set a new mobile record, driving the majority of online sales at 61 percent, an increase from 58 percent last year.

Beyond smartphones, shoppers are exploring adapting to new spending habits in other ways, with buy now, pay later (BNPL) orders up 4 percent compared to 2021. Revenue however, dipped 2 percent, indicating that shoppers are increasingly using BNPL for smaller shopping carts.

In a post-pandemic world, curbside pickup seems to have stagnated. The fulfillment method was used in 21 percent of online orders this holiday season for retailers that offer the service, down slightly from 23 percent in the year prior. However, more consumers used the service closer to Christmas. On Dec. 22-23, curbside pickup peaked at 42 percent of online orders.

The Adobe data also tallied how retailers leveraged their marketing channels to close out the year. Paid search remained the biggest driver of sales for retailers this holiday season (29 percent of online sales attributable to that channel). Direct web visits (19 percent), organic search (17 percent), affiliates/partners (16 percent) and email (15 percent) were also major contributors. Revenue directly attributable to social media remained at less than 3 percent of total sales this season, but that share has grown 24 percent year over year.