Mastercard Inc. has announced that the shopping momentum during this year’s holiday season is stronger than last year’s, as retailers have increased their promotional efforts.
According to a report by Reuters, data from Mastercard SpendingPulse shows that online spending between November 1 and December 24 grew by 6.7% compared to last year, while in-store sales increased by 2.9%.
This resulted in a total spending growth of 3.8% in 2023, exceeding the previously predicted 3.2% increase and surpassing last year’s 3.1% growth.
Steve Sadove, a senior advisor at Mastercard and former CEO and chairman of Saks, told Reuters that consumer spending has increased even when accounting for price inflation.
Many retailers have intensified price cuts and promotions.
Walmart has stated that it will continue to lower prices through rollbacks, while its competitor Target has emphasized increasing promotional efforts to boost shopper engagement.
During the shopping season, Walmart and Target have ramped up their advertising on social media and streaming platforms to attract shoppers, highlighting their fast delivery and membership programs.
Some of these efforts seem to be paying off.
Salesforce estimates that the order volume for buy online, pick up in-store (BOPIS) may double over the weekend before Christmas, accounting for nearly 40% of all online orders placed by retailers. Delivery volumes have also been strong, with FedEx reporting holiday delivery volumes exceeding expectations last week.
Mastercard’s data shows that sales in clothing, jewelry, and electronic products have increased by 3.6%, 4%, and 3.7% respectively compared to last year. Particularly in the clothing category, online sales have surged by 6.7%, while in-store sales have only seen a marginal 0.2% growth.