Strong December growth pushes online holiday sales up 7%

Higher-than-expected December e-commerce activity helped produce healthy 2023 online holiday sales results.

According to analysis from Signifyd, U.S. online sales for the entire 2023 holiday season rose 7% from the 2022 holiday season. A key driver was 11% year-over-year (YoY) online sales growth in December, breaking well past early season predictions that the month would only see a 3% YoY increase in online sales. 

The month’s surge was powered by a 27% YoY boost in grocery sales, a 19% increase in electronics spending, and a 14% rise in spending on leisure and outdoor goods. Signifyd data shows that heavy consumer use of discounts also appeared to play a role in holiday e-commerce growth.

Discount code use in December was up 14% over a year earlier, according to Signifyd data. In all, 23% of online sales in December were accompanied by a discount code. For the fourth quarter as a whole, consumers’ use of online discounts increased 20% over 2022, and 24% of all sales included a discount.

The overall increase in online holiday sales also surpassed early-season projections.

“Both we and our merchants were pleasantly surprised by the staying power of the consumer throughout what has typically been the peak holiday period,” said Signifyd chief customer officer J. Bennett. “This felt like a return to normalcy, with consumers waiting for better deals later in the season. When retailers ultimately offered those deals, consumers responded in a big way.”

Heading into the fourth quarter, Signifyd projected holiday season sales would increase 5% YoY. The analysis saw October sales rising 7% year over year before cooling to a 5% increase in November and a 3% jump in December. Instead, online sales in the last three months of the year were up 4%, 8% and 11%.

Grocery had the strongest holiday season, rising 24% YoY, in part due to higher prices. The category including alcohol and cannabis products was up 19% year over year, while leisure and outdoor, electronics and luxury also all had strong showings.

Analysis from Adobe also indicates the 2023 holiday season was a merry time for online retailers. The latest Adobe Analytics figures indicate that consumers spent $222.1 billion online from Nov. 1 to Dec. 31, up 4.9% year-over-year (YoY) and setting a new record for holiday e-commerce. 

Signifyd’s Holiday Season Pulse Tracker data is derived from transactions on Signifyd’s Commerce Network of thousands of e-commerce retailers and brands.