This year's holiday shopping season has seen a significant shift towards digitally savvy consumers, marking a pivotal change in retail dynamics. Data released by Mastercard indicates that total retail sales from November 1 to December 24 increased by 3.8%, while online shopping experienced a notable rise of 6.7%. These figures, reported in a press release dated December 26, are not adjusted for inflation, revealing a promising trend in eCommerce.
Michelle Meyer, chief economist for the Mastercard Economics Institute, highlighted consumer behaviour during this period, stating, “The holiday shopping season revealed a consumer who is willing and able to spend but driven by a search for value as can be seen by concentrated eCommerce spending during the biggest promotional periods.” She further noted that the strong spending during this holiday season reflects the broader consumer confidence observed throughout the year, bolstered by a robust labour market and increases in household wealth.
The shopping trend was particularly strong during promotional events, such as the Black Friday period, when consumers actively sought value. The final five days of the shopping season accounted for 10% of all holiday spending, showcasing a concentrated burst of purchasing activity.
In addition to online shopping, there has been a marked increase in demand for experiential spending, with restaurant expenditures climbing by 6.3%. This change indicates a possible shift in consumer priorities and preferences as they seek out activities beyond traditional retail purchases.
Complementing Mastercard's findings, Visa's preliminary insights showed that total retail spending in physical stores grew by 4.1%, with online shopping escalating by 7.1%. These figures corroborate the ongoing trend of digital transformation within the retail sector.
Furthermore, in an analysis by PYMNTS, the significance of optimising the payment process for online transactions was underscored. Mike Hanson, Vice President of Banking, Financial Services and Insurance at Quantum Metric, highlighted the critical nature of payment testing among retailers. “Payment testing has become mission critical for any retailer that wants to drive an impact on customer experience and brand loyalty,” he stated. With an average consumer visiting a webpage two to three times before finalising a purchase, retailers that prioritise the optimisation of checkout pages ahead of peak sales periods are likely to see improved conversion rates and higher customer satisfaction.
Hanson also pointed out that establishing trust through pre-purchase testing is vital, particularly during the busy holiday season, as it reassures customers that transactions will proceed without issues. Research by PYMNTS Intelligence further revealed that 70% of shoppers base their online shopping choices significantly on the payment options available, indicating that the failure to provide preferred payment methods can lead to cart abandonment.
As businesses adapt to these trends in consumer behaviour and expectations, the emphasis on enhancing the online shopping experience through improved payment processes is becoming increasingly apparent.
Source: Noah Wire Services