October E-Commerce Sales Point to a Strong Holiday Shopping Season for Retailers

Consumers provided a positive start to the 2024 holiday season, boosting October online sales over last year. This is despite shoppers leaning on discounts and trading down for more affordable items to stretch their gift-giving budgets, according to holiday data from commerce protection provider Signifyd.

The October figures matched Signifyd’s earlier projection of a 5 percent year-over-year increase in e-commerce sales. The company’s analysis calls for a 7 percent annual increase for the holiday season overall, with November sales dropping 2 percent below November 2023 and December coming in 18 percent higher than the previous year.

The large disparity in the November and December figures owes itself to a quirk of the calendar: Cyber Week, the peak of holiday spending, fell entirely within November last year. This year, 40 percent of Cyber Week spending will take place in December. Cyber Week sales will be 8 percent higher than in 2023, according to Signifyd’s projection.

Looking at October online sales by vertical, the grocery (+20 percent), luxury goods (+13 percent) and apparel (+7 percent) categories all performed above this year’s average growth. Meanwhile, retailers selling holiday favorites, including beauty and cosmetics (+4 percent), leisure and outdoor goods (+1 percent) and electronics (-2 percent) saw their categories fall short of average e-commerce growth compared to a year ago.

“October was interesting," said Signifyd Senior Data Analyst Phelim Killough, who analyzed the sales figures. "Overall sales growth came in right at our 5 percent projection. But if you dig into sales by category, you’ll find that retailers in some categories had a disappointing start to their holiday season. That said, we’ve yet to reach Black Friday and we have several weeks to go in what we’re still projecting to be a promising season for e-commerce.”

October can be a tricky month to read. It’s a significant holiday shopping month, with nearly a third of consumers telling Gartner they would start their holiday shopping before November. The question then becomes: Is that October spending being pulled forward from later in the season or will shoppers continue to add to their purchases through the end of the quarter?

Besides the typical winners and losers by category, October was notable because while consumers spent slightly less (1 percent) they purchased significantly more items (15 percent) per order than they did a year ago. Killough says that generally indicates that shoppers are favoring cheaper alternatives, a trend that’s been visible in the data for months.

Shoppers also turned to discounts in bigger numbers in October than they did during October 2023. For the first five weeks of the fourth quarter, 34 percent of spending was done with a discount added to the order. Last year, the figure was 29 percent — not a huge difference, but enough to indicate that once again discounts will be crucial to attract buyers in 2024.

Beyond watching for signs in October that holiday shopping enthusiasm was waning among inflation-weary shoppers, merchants and analysts were keeping an eye on two other factors with the potential to disrupt sales — a shorter traditional holiday selling season and a presidential election.

We’ll have to wait to see how sales are affected by the truncated period between Thanksgiving and Christmas — historically the heart of the holiday shopping season. As for the presidential election, it created little distraction for shoppers in October. However, as in presidential election years past, it left its mark on and around Election Day itself.

Sales on Nov. 4, the day before the election, were tepid — up 5 percent YoY in the midst of significantly higher annual growth. On Election Day, sales dropped 2 percent from a year earlier, remarkable given the notable sales increases leading up to election week. (Online sales the week before the election were up 6.8 percent YoY.)

If history is a guide, the Election Day slump will have little effect in the long run. And given October’s performance, retailers in 2024 will have an opportunity to outperform last year’s holiday season.

Mike Cassidy is head of PR and storytelling at Signifyd, a commerce protection provider.