A retail research firm predicted there would be record discounts this past holiday season, and that prediction appears to have panned out. What they didn’t warn us about, was how these record discounts would result in record spending – and record regrets.
Adobe Analytics is out with its post-holiday shopping report, in which it found that both online spending and online discounts hit record levels this past year, while suggesting that many of us spent more than anticipated or more than we could afford.
And another survey found that many of us regret doing so.
Adobe’s report, which focused specifically on online shopping, found that spending during the 2023 holiday season grew 4.9% from the year before, reaching a record high of $222.1 billion. While inflation and financial uncertainty had many shoppers hesitant to spend too much, discounts apparently tempted them to buy. Discount levels fell short of the 35% off that Adobe predicted back in October, with discounts peaking at 31% off, which still wasn’t bad.
The best deals could be found among electronic items, with discount levels rising in nearly all categories as compared to the year before. The only category in which discounts were harder to find and less lucrative than in 2022 was toys. Discounts peaked at 28%, down from 2022’s 34%. And this was the very category Adobe had predicted would offer the greatest deals of all this past year.
In all cases, discounts peaked around Black Friday and Cyber Monday. Shoppers who held out for better deals later in the holiday season tended not to find them – discount levels began decreasing as December went on, with prices in some categories like clothing, sporting goods and computers bouncing right back to where they were before the holiday shopping season even began.
Notably, and perhaps troublingly, along with these record discounts came record use of “Buy Now, Pay Later.” $16.6 billion will be coming due in the months ahead, as use of the flexible payment method rose 14% from the previous year. Adobe chalked this up as a win for sellers – “In an uncertain demand environment, retailers leaned on discounting and flexible payment methods to entice shoppers this holiday season,” Adobe lead analyst Vivek Pandya said in a statement.
But was it a win for shoppers? A separate survey has found that many are second-guessing themselves as the holiday bills start rolling in.
WalletHub’s Post-Holiday Shopping Survey found that three-quarters of all shoppers said inflation affected their holiday spending more than they anticipated. Nearly half said they ended up spending too much, and a quarter regret some of their holiday purchases. A quarter of all shoppers believe they’ll need more than six months to pay off their holiday shopping debt.
The good news, perhaps, is that these shoppers are already looking for ways to do better next time. 60% said they plan to start their holiday shopping earlier in 2024, and half said they will keep their spending in check and spend the same or less next time around. Overall, more than two-thirds believe 2024 will be better for their finances than 2023.
So despite all the discounts, holiday shopping this past year turned out to be pretty pricey. But thankfully, financial optimism for the year ahead won’t cost you a thing.
Image source: micheile henderson on Unsplash
