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US consumers driving strong e-commerce holiday spending

Published 02/12/2024, 11:12
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Investing.com -- The US e-commerce sector performed strongly during the Thanksgiving and Black Friday shopping period, Oppenheimer revealed in a new industry report.

Specifically, Data from Adobe (NASDAQ:ADBE) and Salesforce (NYSE:CRM) indicated year-over-year accelerations in consumer spending on Thanksgiving, while Black Friday also showed positive trends, with Adobe and Mastercard (NYSE:MA) SpendingPulse reports suggesting year-over-year accelerations.

Shopify (NYSE:SHOP) recorded a 22% increase in sales, consistent with last year's growth, and Salesforce noted a slight deceleration.

Citing data from Mastercard SpendingPulse, Oppenheimer reveals that e-commerce significantly outperformed in-store shopping, with a 15% year-over-year increase compared to just a 1% rise for in-store sales. This growth in e-commerce represents a jump from the previous year, where online sales grew by 9% and in-store sales by 1%.

The firm’s analysts said these robust sales figures are positive indicators for major e-commerce and digital advertising companies, most notably Amazon (NASDAQ:AMZN), Meta Platforms (NASDAQ:META), Google (NASDAQ:GOOGL), The Trade Desk (NASDAQ:TTD), and Pinterest (NYSE:PINS).

As for Black Friday specifically, shopping in US retail stores saw only modest growth this year, while online sales experienced a significant boost as shoppers chose the convenience of phones and laptops over physical stores.

Mastercard’s preliminary estimates show that in-store sales edged up just 0.7% compared to last year, with Facteus reporting even lower numbers. However, US e-commerce sales soared, rising 14.6% year-over-year according to Mastercard SpendingPulse, which combines transactions from the Mastercard network with cash and check payment estimates.

These figures do not account for inflation. "If you layer in inflation, in-store (spending) is even lower," noted Jonathan Chin, co-founder and head of data at Facteus.

The firm, analyzing trends in debit and credit card transactions, found that online spending grew 11.1% while in-store spending dropped 5.4%. When adjusted for inflation, online sales growth slows to 8.5%, and the decline in in-store sales deepens to 8%.

Mastercard SpendingPulse reported a 3.4% increase in overall Black Friday spending compared to the previous year. The metric, which excludes auto sales and isn’t inflation-adjusted, also projects a 3.2% rise in spending for the holiday shopping season running from Nov. 1 to Dec. 24.

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