eCommerce Rocks December as Retailers Continue Digital Shift

December’s retail sales, released on Thursday (Jan. 16) by the Census Bureau, were a snapshot of consumer resilience, buoyed by end-of-year sales.

And beyond the month’s snapshot, looking back through the 12 months of a volatile year, eCommerce was a standout — even as shoppers went back into the physical aisles to touch the merchandise and transact.

Overall retail sales were up 0.4% in December as measured month over month, and while the “headline” data fell short of consensus estimates, it must be noted that the monthly change comes off an upwardly revised November reading that had seen an 0.8% gain over October’s levels.

Most categories saw increased spending — and it be may instructive to point out the few segments that saw dips, which indicates that consumers triaged their spending a bit during the holiday season in favor of gift-giving. Spending at building material and garden supply merchants dipped 2% in December, on top of a 0.8% decline in October. Spending at health and personal care stores was 0.2% lower, and dining out seemed to take at least somewhat of a back seat during the holidays, as sales at food and drinking places were off by 0.3%.

Drilling down into what we might term the key “gift giving” categories (on a seasonally adjusted basis), consumers spent 2.6% more in December on sporting goods, books and hobby-related items; there was a 0.4% boost in sales at electronics merchants. Home furnishings, as a category, got a 2.3% lift.

The December data marks the fourth consecutive increase in seasonally adjusted sales and highlights consistent growth throughout the fourth quarter of 2024. These figures reflect strong consumer activity despite broader economic uncertainties.

As for how consumers got what they got: Nonstore Retailers, which is a category that includes but is not limited to eCommerce and remote shopping, saw some continued momentum, with sales growing 6% year over year in December, and up 0.2% on a monthly basis. This growth reflects a continued shift in consumer habits toward online platforms, driven by convenience and seasonal demand.

The chart below shows the healthy year over year growth in several key, and discretionary, categories.

Total retail sales for the year 2024 rose by 3.0% compared to 2023, reflecting steady economic momentum. The holiday season contributed significantly to the October-December quarter, with sales growing 3.7% year over year.

The finish line, so to speak, has been crossed for 2024, and the momentum stands in contrast to the consumer mindset that had dominated the beginning of — and all through — the year. As PYMNTS Intelligence found through several reports chronicling trade-offs, trade-downs and pull-backs, many consumers found that wages were not keeping pace with inflation, and there’d been a gravitation toward private label and, in the case of groceries and other everyday items, less expensive merchants and goods.

A Shift Toward Paying Over Time

As noted above, the December data capped a multi-month opening of the wallets by individuals and households, as everything from back to school spending and promotional activity that lasted into November and December. Shopping for deals certainly was a hallmark of holiday spending. But there’s also evidence of a firmly entrenched shift in how consumers are paying for it all — namely, they’re paying over time. PYMNTS Intelligence had found at the end of last fall that roughly a third of individuals were eyeing buy now, pay later (BNPL) and installment options to help finance their spending.