The Economy

E-Commerce Posts 18.8% Holiday Season Gain

Retailers offered omnichannel sales earlier in the season, "meeting consumers’ demand for the best deals across all channels and devices."
Matthew HellerDecember 26, 2019
E-Commerce Posts 18.8% Holiday Season Gain

E-commerce sales posted another big gain this holiday shopping season as overall retail sales grew at a slower rate than a year ago.

According to Mastercard, online sales rose 18.8% year-over-year from Nov. 1 through Christmas Eve, topping last year’s 18.4% growth rate even though Thanksgiving came a week later.

Overall sales, excluding auto, increased 3.4% to nearly $880 billion compared to a growth rate of 5.1% a year ago. Online spending accounted for 14.6% of the total, with gains of 17% and 10.7% in the specialty apparel and electronics categories, respectively.

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“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,” said Steve Sadove, senior advisor for Mastercard, in a news release.

Amazon, meanwhile, reported a record-breaking holiday season as more online shoppers used its Prime service than in any previous year.

“The holiday season was challenging for retailers after Amazon expanded its free return policy to include products that were not previously eligible, giving consumers until January to return even small purchases bought on the website,” Reuters noted.

The National Retail Federation had forecast U.S. holiday retail sales over the two months to increase between 3.8% and 4.2%. That compares with an average annual increase of 3.7% over the past five years.

During the last shortened shopping season in 2013, retail chains and delivery companies scrambled to get packages to shoppers in time for Christmas but since then, retailers have invested heavily to provide same-day delivery, lockers for store pick-up and improve their online presence.

“Consumers also benefited from a low unemployment rate and rising wages, even as global uncertainty and trade tensions have hit business investment,” Reuters said.

Department stores saw overall sales decline 1.8% this holiday season but online sales grew 6.9%. At one retailer, Tiffany, comparable-store sales fell 2%.

Due to the growth in e-commerce activity, United Parcel Service is forecasting a record National Returns Day on Jan. 2, with 1.9 million returns expected.