Americans spent a record online over 2020 holidays, and more e-commerce gains are expected

Finance news

An independent contractor to FedEx Corp. unloads packages from a delivery truck on Cyber Monday in New York, U.S., on Monday, Dec. 2, 2019.

Michael Nagle | Bloomberg | Getty Images

U.S. online purchases over the 2020 holidays grew 32.2% from 2019, totaling a record $188.2 billion as shoppers stayed home and shopped on the web during the pandemic, according to Adobe Analytics.

E-commerce sales during November, which included Black Friday and Cyber Monday, reached $100 billion for the first time, said Adobe, which tracks the web transactions of 80 of the top 100 internet retailers in the U.S. In another first, online spending exceeded $1 billion daily during the 2020 holiday season and 50 days topped $2 billion, Adobe said.

In light of the pandemic, digital has become the primary way for people to connect, work, be entertained and shop,” said Taylor Schreiner, director of Adobe Digital Insights. “Now, as Covid-19 cases continue to rise and more stringent lock-down measures return, online spending is expected to stay elevated, at least for the early part of 2021.”

Groceries, appliances and books surged in popularity around the holidays compared with October levels, Adobe said, while online sales of toys were up 50% from 2019, and the jewelry category was up 66%.

Internet spending during the week of Thanksgiving through Cyber Monday accounted for just 18% of the overall season, down from 20% in 2019, Adobe said. As retailers promoted deals earlier than ever, many Americans started their shopping in October in a bid to avoid crowded aisles during the pandemic.

Retailers like Target and Dick’s Sporting Goods that offer curbside and other convenient pickup options for online orders saw even stronger sales over the holidays, according to a separate analysis by Salesforce. Their digital sales were up an average of 49% from a year earlier, compared with growth of around 28% for the retail businesses that didn’t have curbside pickup and similar options, Salesforce found.

Shoppers also have been looking for ways to finance their purchases, and avoid running up their credit cards. The use of “buy now, pay later” for online orders grew 109% during the holidays, Salesforce found, with the biggest runup taking place the final week before Christmas.

Now, the surge in e-commerce activity is going to translate into a record returns volume, which could prove to be retailers’ next biggest headache in the new year. Salesforce expects $330 billion in global online purchases to be returned following the 2020 holiday season, representing about 30% of total purchases.

“We expect to see these new innovations remain in 2021 with holiday strategies becoming the new standard that consumers expect from their favorite retailers and brands,” said Rob Garf, vice president of Industry Strategy for Retail at Salesforce.

Read the full report from Adobe Analytics on the 2020 holidays here.