Consumers are becoming increasingly focused on getting more value for their money this holiday season, with early data showing a growing reliance on discounts and a shift toward lower-priced items, according to Signifyd’s initial holiday season report.
U.S. e-commerce sales for the first two weeks of October 2024 were up 3% compared to the same period last year, though performance varied significantly by retail category, as highlighted by Signifyd’s Holiday Season Pulse Tracker.
Throughout the holiday season, Signifyd’s new Pulse Tracker will provide ongoing updates on online sales by sector, along with insights into order values and fraud trends, including first-party fraud. The early October boost in sales, along with an 8% year-over-year increase in September, suggests that consumers are willing to spend but remain highly price-sensitive.
Key Findings from Signifyd’s Latest Ecommerce Pulse Report:
- E-commerce sales for the first two weeks of October rose by 3% year-over-year, with grocery and apparel leading the charge. Electronics, however, experienced a notable decline in sales.
- Discount usage increased by 22% compared to October 2023, indicating that consumers are prioritizing value as they shop this season.
- September e-commerce sales were up 8% over the previous year, with luxury goods performing particularly well, though electronics sales remained weak.
Balancing Discounts and Profitability
The early data underscores the importance of discounts this season, as retailers must balance staying competitive on price while protecting their profit margins. In the first half of October, 32% of online sales involved a discount code, representing a 22% increase from the same period in 2023.
“Consumers are actively hunting for bargains as the holiday season begins, with a dramatic increase in discount code usage,” noted Signifyd Senior Data Analyst Phelim Killough. He emphasized that retailers can expect value-oriented shoppers throughout the holidays, seeking deals and opting for lower-cost alternatives.
Retailers Adapt to Value-Driven Shoppers
The rise in discount usage reflects both the consumer demand for promotions and merchants’ recognition that they need to offer attractive deals to drive sales. September’s sales figures reveal a similar trend, as the average order value dropped by 1% compared to last year, while the number of items per order increased by 13%. Consumers are clearly spending more but on lower-priced products.
September E-Commerce Sales by Category (2024 vs. 2023):
- Grocery: 32%
- Luxury goods: 16%
- Leisure & outdoor: 9%
- Fashion, apparel & luggage: 8%
- Home goods & decor: 7%
- Business supplies: 1%
- Auto, parts & tires: -2%
- Beauty & cosmetics: -2%
- Alcohol, tobacco & cannabis: -6%
- Electronics: -9%
- All sales: 8%
The grocery category continues to lead sales growth, while luxury goods also performed well, with the average order value for luxury items rising by 18%. However, the electronics sector struggled, with a 9% drop in sales in September.
Early Holiday Season Winners and Losers
In the early days of the holiday season, grocery sales jumped 24% and apparel sales increased 8% compared to the first two weeks of October 2023. However, electronics and categories like alcohol, tobacco, and cannabis saw a decline in sales.
Holiday E-Commerce Sales (Oct. 1-15, 2024 vs. 2023):
- Grocery: 24% growth, 83% of sales with a discount code
- Fashion, apparel & luggage: 8% growth, 36% with a discount code
- Leisure & outdoor: 5% growth, 19% with a discount code
- Electronics: -16% decline, 8% with a discount code
- All sales: 3% growth, 32% of sales with a discount code
Signifyd projects that total e-commerce sales will rise by 7% for the full holiday season, with October sales expected to increase by 5% compared to the previous year.
About Signifyd
Signifyd provides an end-to-end Commerce Protection Platform that helps retailers maximize conversions, enhance customer experience, and prevent fraud. The platform, powered by AI-driven machine learning, ensures secure transactions and reduces the risk of consumer abuse. Signifyd serves top retailers globally and is headquartered in San Jose, CA, with locations across the U.S., Latin America, and Europe.
