Initial holiday sales numbers reveal single-digit year-over-year growth driven by robust e-commerce activity. Total U.S. online sales during cyber week (Thanksgiving through Cyber Monday) rose by 8.2%, with a notable 7.3% increase on Cyber Monday alone, according to Adobe Analytics.
Mastercard also highlighted online strength with a 14.6% sales gain compared to just 0.7% growth for in-store sales. In contrast, Black Friday in-store traffic was muted, down 3.2% according to RetailNext. Despite this, Fiserv POS data shows that same-store in-store sales were up 2% year-over-year, while e-commerce grew by an impressive 11.7%.
The driving forces behind strong digital sales this season likely include advancements in artificial intelligence, enhanced convenience and a focus on value for consumers.
The AI effect
AI continues to revolutionize e-commerce, enabling businesses to provide more personalized and efficient customer experiences. According to Statista, retailers leveraging AI reported a 700-basis point increase in sales from 2022 to 2023, effectively doubling their profit growth. A key driver of this growth is higher sales conversion rates, which have risen by 2.5% to 3% on average, according to Shopify.
Additionally, nearly two-thirds of retailers have planned to incorporate generative AI features for their customers, according to eMarketer. Bloomberg Intelligence forecasts that this trend could elevate digital sales to 34% of U.S. retail revenue—excluding food services and gas—by 2030, up from 25% in 2023. This shift would translate to over $1.2 trillion in online sales.
As AI adoption expands, retailers with advanced digital capabilities will widen the gap over competitors, setting a new standard for convenience and user experience in e-commerce.
Convenience dominates consumer choices
Convenience continues to shape both online and in-store sales as customers increasingly prioritize seamless shopping experiences. For retailers, investing in customer experience enhancements is essential for driving long-term consumer demand.
For example, adopting AI-powered recommendation engines can create personalized and convenient shopping experiences, resulting in higher average order values and improved customer retention. Metrics such as increased average order value, higher satisfaction scores and repeat purchase rates demonstrate return on investment.
Retailers that successfully integrate convenience into their strategies—whether through mobile apps, in-store technologies or personalized online shopping—are likely to see measurable gains in sales and customer loyalty.
Digital wins over value-based shoppers
Shoppers seeking to stretch their dollars are gravitating toward digital channels where deals, size availability and quick shipping are more accessible. Online marketplaces like Amazon, Temu, and Shein have become go-to destinations for value-conscious consumers, making it increasingly difficult for brick-and-mortar retailers to compete.
By offering competitive pricing, efficient delivery options and an easy shopping experience, digital-first retailers are capturing a growing share of consumer spending during the holiday season.
The takeaway
To thrive in the evolving retail landscape, investments in AI, consumer convenience and value-driven strategies will be critical. Retailers that embrace these strategies will position themselves for sustained growth and long-term success.
This is the final post in our series on holiday season business insights. Check out additional retail business insights.
