After months of concern over whether inflation-weary consumers would be willing to spend when the traditional start of the holiday shopping season rolled around, consumers showed up — big time — for the stretch from Thanksgiving through Cyber Monday.

Online sales were up 8% for the five-day affair, with a big year-over-year increase in discount use fueling the shopping frenzy. Online orders with discount codes attached increased by 38% during the Cyber Five compared to last year, peaking at 46% higher on Black Friday and reaching 43% higher on Cyber Monday.

Sales were solid to strong throughout the long weekend increasing by 4% on Thanksgiving,  11% year over year on Black Friday, 7% on Saturday, 8% on Sunday and 7% on Cyber Monday. 

Consumers in survey after survey indicated that they would be looking for bargains this holiday season and online brands and merchants apparently delivered. 

“Consumers have been saying that value is especially important to them this holiday season,” Signifyd Chief Customer Officer J. Bennett said. “Merchants have heard that message and responded. And for their part consumers have said, ‘These discounts represent true value. Now is the time to buy.’”

Popular discounts were the key to Cyber Five success in 2023

A look at discounting by day indicates how important markdowns were to the success of Cyber Five 2023. Besides the big boosts on Black Friday and Cyber Monday, shoppers used 31% more discount codes on Thanksgiving than they did in 2022, 29% more on Saturday and 32% more on Sunday.

The traditional kickoff to the holiday shopping period (which now starts in earnest in October) provided some other encouraging signs. Holiday shoppers returned to categories that had traditionally been gift-giving favorites, but showed some weakness in October. 

Luxury goods, beauty and cosmetics, apparel, alcohol, tobacco and cannabis, and leisure and outdoor goods all experienced double-digit year-over-year percentage growth during the Cyber Five. Grocery was also up double digits. Electronics continued to struggle, with sales down 2% year over year. 

The 8% overall spending increase was double what Signifyd had projected in early October and dramatically outpaced the expectations of other experts as well. The question now becomes whether the expectation-shattering performance was the sign of things to come — or whether it means consumers’ gift-shopping budgets are now exhausted for the season. 

Did the big Cyber Five success merely pull December sales forward?

“I’ll be curious to see how much of the Cyber Five spending was a pull-forward from December,” Bennett said. “If I had to project right now, I’d say November is going to end stronger than we projected, and December will fall a little short of expectations. Consumers have said they have a set budget for the holidays. They’re just searching for the best value, the best place to spend that money.”

Whatever the case, it could mean online brands and merchants will need to keep offering discounts to keep customers coming back. There are any number of ways the data from the Cyber Five demonstrates just how important discounts were in the success of the annual festival of shopping.

For the whole of Cyber Five, consumers included discount codes with 29% of the orders they placed. That figure ranged as high as 32% on Sunday and never went lower than 25%, which is where it sat on Thanksgiving Day.

The markdowns had the effect of lowering prices during the Cyber Five. A Signifyd analysis that compared prices for 175,000 goods during the first half of the year to what they were during the Cyber Five. The study found average prices were 11% lower over the long weekend effectively neutralizing inflation. The average size of the discounts themselves ranged from a high of 19% on Black Friday to 3% on Sunday.

Fraud appeared to take a holiday break during the Cyber Five 

Among the weekend’s many bright spots: Fraud pressure — or the number of orders Signifyd deemed to be fraudulent — dropped by 20% over last year’s Cyber Five. The figure was a welcome one, given that U.S. merchants faced a massive fraud attack during holiday 2022. An organized fraud ring last year made off with an estimated $660 million in goods from online retailers nationwide while attempting fraudulent purchases of more than an estimated $3 billion in products. 

A deep dive into the Cyber Five’s daily numbers

Thanksgiving offered the slowest day of year-over-year sales growth during the five days.

Black Friday led in sales growth, as it should be for the day that historically has been synonymous with shopping until you drop.

*Fraud pressure is defined by the fluctuation in the number of transactions that Signifyd models deem very risky.

Saturday matched the sales growth of Cyber Monday, but remember the sales volume was not even close, meaning the growth was on a much smaller base. 

*Fraud pressure is defined by the fluctuation in the number of transactions that Signifyd models deem very risky.

Sunday showed strong growth, but see “sales volume” above. 

*Fraud pressure is defined by the fluctuation in the number of transactions that Signifyd models deem very risky.

Cyber Monday ensured that the Cyber Five 2023 finished strong. 

*Fraud pressure is defined by the fluctuation in the number of transactions that Signifyd models deem very risky.

Methodology 

Signifyd’s Holiday Season Pulse Tracker data is derived from transactions on Signifyd’s Commerce Network of thousands of ecommerce retailers and brands. Commerce Network intelligence also powers Signifyd’s Commerce Protection Platform, which leverages AI-driven machine learning models and data from millions of transactions to detect and block fraudulent activity. Signifyd has seen more than 600 million unique shopper wallets globally, meaning that 98% of the time when a shopper comes to a Signifyd-protected site, Signifyd’s machine-learning models recognize the shopper instantly. For a tutorial explaining the methods and meanings behind Signifyd’s Holiday Season Pulse Tracker visit Signifyd’s YouTube channel.

Photo by Getty Images

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Sales for the day, the once-traditional kickoff of the holiday shopping season, were up 11% over Black Friday 2022, with gift-friendly verticals, such as beauty and cosmetics, alcohol, and apparel leading the way.

Data from Signifyd points to the key role good deals played in the double-digit growth. The number of online orders placed with a discount was up 46% over last year. In all, 26% of online orders on Black Friday were marked down by discount, compared to 21% last year.

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With an estimated 25% of Black Friday sales in the books, Signifyd Holiday Season Pulse Tracker data showed daily sales falling just short of the current season average, which has sales up 6% between Oct. 1 and Black Friday over the same period last year. 

The good news for retailers is that Black Friday sales show consumers are prepared to spend on holiday gifts and related items as long as they can find a good deal. Signifyd Data Analyst Phelim Killough said the promising start to Black Friday might ultimately mean that the Cyber Five — Thanksgiving through Cyber Monday — would outperform Signifyd’s projection of a 4% increase in sales. 

Discounts appear to be the key. In fact, 28% of Black Friday ecommerce orders were accompanied by discount codes by mid-day, up from 22% a year ago. Those discounts averaged a savings of more than 29% for shoppers, up from 24.5% last year. 

“Consumers have been telling us for weeks that they would be looking for deals this holiday season. What we’re seeing on Black Friday and on Thanksgiving is that they are true to their word,” Killough said. “We’re also seeing that retailers who really understand their customers are providing significant value during what for many of them is the most important quarter of the year.”   

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The slower-than-expected start to the crucial fourth quarter prompted Signifyd to lower by a percentage point its initial projection that the three-month holiday shopping period would finish with sales 5% higher than holiday 2022.

Online spending in the U.S. was up 4% over a year ago in October, according to Signifyd data. That’s significantly short of Signifyd’s initial projection of a 7% sales increase. Signifyd analysts noted that robust apparel sales failed to materialize and that early-season promotions — including Amazon Prime Day — didn’t ignite the same level of buying enthusiasm that experts expected.

Key takeaways from Signifyd’s October holiday ecommerce sales data

For a look at how October’s numbers provide a snapshot of a holiday season that continues to defy expectations, consider the following conclusions drawn from Signifyd’s monthly Pulse report: 

• Disappointing ecommerce sales in October will temper the year-over-year increase in online holiday sales this fourth quarter. Signifyd’s latest projection calls for ecommerce sales to increase by 4% during Q4, rather than by 5% as it originally forecast.
• Amazon Prime Day did provide a halo effect for retailers other than Amazon. Unfortunately for those retailers, the boost lasted about 24 hours, rather than providing the multi-day sales increases that Prime Day had provided in the past.
• Apparel sales were flat in October compared to a year ago. That was far below the 9% increase Signifyd had predicted for the month.
• Consumers more enthusiastically embraced discounts this year, increasing the portion of orders accompanied by discount codes from 22% in 2022 to 25% this October. That two percentage point increase in deals contributed to tamping down overall revenue.

“When I talk to retailers, what they saw with consumers, was that the pull-ahead with Amazon and the early-days-kind-of-sales, there was some success there, but not nearly as much as they projected,” Signifyd Chief Customer Officer J. Bennett said. “What we saw was that Prime Day actually had a really good halo effect across the ecosystem, but it was only about 24 hours. In previous years, that halo effect actually wasn’t so concentrated.”

Prime Day’s ‘halo effect’ was not so shiny in October 

Amazon’s Prime Day typically prompts other merchants to offer competing promotions and creates a national buying event across ecommerce, whether Amazon is doing the selling or not. Prime Day, Oct. 10, did see the month’s largest daily increase in year-over-year sales on Signifyd’s Commerce Network, but the upswing lacked the staying power of Prime Days past. By October 11, sales had fallen back to where they were earlier in the week, an indication that consumers weren’t as anxious to buy early as retailers expected.

“We didn’t see that as much this year,” Bennett said. A portion of consumers appear to have said, “I’ll wait,” Bennett added. “There’s no reason to buy right now.”

Signifyd downgraded its forecast for the holiday season in light of October’s miss. It’s now projecting that online sales from Oct. 1, through December will be up 4% rather than the 5% it predicted in early September. Signifyd bases its projections on recent transaction and growth trends and seasonality factors. When those elements change, the projections do, too.

Slow apparel sales a major culprit in Signifyd lowering its holiday sales expectations

Slow apparel sales contributed significantly to the gap between Signifyd’s October projection and actual sales. While Signifyd’s forecast predicted a 9% increase in apparel sales for the quarter over last year, sales were in fact flat for the month.

“We actually projected that apparel would have a breakout year this holiday season,” Bennett said. “I’m still projecting that for November. It’s just not happening in the earliest part of this holiday season.”

The holidays will play out differently by retail vertical

But as always, the story will vary by retail vertical. While apparel had a disappointing month, online grocery sales were up 26% year over year — owing in part to stubbornly high prices. Sales of products in the alcohol, tobacco and cannabis category increased 19% and leisure and outdoor goods sales were 14% higher than last October.

Was Singles Day weekend a sign of better things ahead?

For the glass-half-full crowd, data from online sales over Singles Day weekend — Nov. 10 through 12 — provides evidence that consumers are still ready to buy for special occasions. That’s only right given that Singles Day is a declaration of optimism and happiness in the face of those who believe being a couple is a requirement on the road to fulfillment. 

While momentum for Singles Day sales has been building in the U.S. in recent years, the China-born shopping holiday celebrating the romantically unattached clearly made a mark in 2023.

Online sales of “treat yourself” items in the beauty and cosmetics vertical and the luxury vertical had strong showings during the Singles Day weekend, according to data from Signifyd’s Live Holiday Season Pulse Tracker. Sales in both verticals from Nov. 10 through Nov. 12, were up 9% over last year’s Singles Day weekend.

Singles Day, celebrated on Nov. 11, originated in China in the 1990s and has grown globally into the largest shopping day of the year. Nov. 11, which is also Veterans Day in the United States, has been growing as a prominent shopping day in the U.S. In recent years, more U.S. retailers have offered promotions linked to Singles Day.

Singles Day bounce was in full force

This year, overall online sales in the U.S. increased 5% over the Singles Day weekend compared to a year ago, Signifyd data shows. That boost was in keeping with higher sales for the holiday season, which are also up 5% year-over-year. However, when compared to a typical holiday shopping season weekend, the Singles Day bounce was evident — sales were 10% higher than the first weekend in November and 22% higher than the second weekend in October. 

Bigger Singles Day basket sizes also matched the overall holiday shopping season, which began Oct. 1. Average order values for the season so far and for the Singles Day weekend, both came in at up 1%.

Interestingly, AOV in the beauty and cosmetics category declined 3% over a year ago, as shoppers turned to discounts to stretch their shopping budgets. Maybe when buying for oneself, money is indeed an object. The share of sales accompanied by discount codes reached 57% in the beauty and cosmetics category over the weekend, Signifyd data shows. Last year only 31% of sales in the category were rung up with a discount code attached.

Luxury sales were a different story, with discount codes increasing only 5% over last year, while average order value in the luxury category soared by 32%.

Singles showed themselves to be bargain hunters

Overall, one-fifth of all online transactions arrived with a discount code over the Singles Day weekend. And those deals were good ones. In fact, the size of the discounts provided by merchants over the weekend increased by 6% over last year. For all of November so far, the discount size was up only 2% over a year ago.

Despite the flurry of shopping activity over Singles Day weekend, fraud pressure — or the measure of orders deemed very risky by Signifyd — declined by 25%. That’s in contrast to fraud pressure during the overall holiday season so far, which is running 10% higher than a year ago.

The nature of the fraud threat did shift over the weekend — with criminal fraud claims taking share from first-party fraud claims. Criminal fraud claims gained 4% in their share of claims.

 More on Signifyd’s methodology and data

Signifyd’s Holiday Season Pulse Tracker data is derived from U.S. transactions on Signifyd’s Commerce Network of thousands of ecommerce retailers and brands. Commerce Network intelligence also powers Signifyd’s Commerce Protection Platform, which leverages AI-driven machine learning models and data from millions of transactions to detect and block fraudulent activity.

The platform also recognizes and approves legitimate customers, ensuring their orders are fulfilled rapidly. Through its network, Signifyd has seen more than 600 million unique digital wallets[1] globally, meaning that 98% of the time when a shopper comes to a Signifyd-protected site, Signifyd’s machine-learning models recognize the shopper instantly.

For a tutorial explaining the methods and meanings behind Signifyd’s Holiday Season Pulse Tracker data visit Signifyd’s YouTube channel.

[1] A digital wallet is a distinct combination of signals present in an online transaction.

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Luxury goods were the biggest loser in August with sales falling 66% compared to August 2022, Signifyd data shows. Meanwhile, spending on groceries led the upside, rising 22% year over year.

The two categories tell the tale of the state of the consumer in August.

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Cost tackled the Shopify universe, explaining Rainbow Shops’ strategy: It’s not about which apps to use, but how they’re integrated. Highlighting the tricky terrain of performance impact, he drove home the need for brands to keep their online storefronts agile and clutter-free.

Payment methods? Another minefield. Cost shared insights on integrating Rainbow’s checkout software with Klarna, pointing out that while such platforms might be shiny and new, and popular among existing customers, they aren’t necessarily magnets for new customers. He said he saw a similar trend back when PayPal was a new option.

Nathan Liu waded into the challenges of balancing digital conveniences with real-world immediacies. Think buy online, pick up in store – sounds simple, right? Not when burdensome fraud checks create unintentional bottlenecks.

Sridhar’s take? Ecommerce is a relentless game of adapt or perish. Consumer behavior isn’t static; it’s an ever-shifting terrain, and brands need to be nimble-footed.

In the whirlwind world of ecommerce, the goal is clear – keep it seamless; keep it customer-centric. Brands need agility, adaptability and a touch of foresight to truly ace the game.

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Retailers brought their A-game: Walmart offered a genius marketing lure that let us glimpse into the shopping carts of NFL player Patrick Mahomes, singer Becky G and Barbie. Who knew Mahomes has shopped at Walmart since he was a kid?

It was hard to look away.  

Ecommerce data came with surprises in July

In July overall, electronics led all verticals with a 20% increase year over year, followed by sporting goods (up 15%), health and beauty (up 10%), apparel, accessories and footwear (up 6%) and home goods (up 4%), Signifyd data shows.  

“Amazon had plenty of competition for Prime Day this year with both Target Circle Week and Walmart Plus Week happening simultaneously, giving consumers several options for the sales they shop,” Koen Looijmans, executive vice president of Retail PX at Productsup, told Retail Dive by email. “Something that stands out, however, is that both Target and Walmart held longer sales (seven and four days) compared to Amazon’s sought-after two-day shopping extravaganza. Perhaps, as an attempt to capture customers who missed Amazon’s short window.”  

Spending less for more (what a concept!)

Sporting goods sales soared to 15% in July, year over year, boosted by a 47% sales increase in outdoor camping items, according to Signifyd data. Discounts apparently played their part, with the number of transactions up 32% from last year while the average order value (AOV) was down 12%. 

Sales in the apparel vertical also showed a year-over-year increase in transactions (4%)  and a lower AOV (-2%). Home goods also saw a year-over-year transaction increase (3%), but no movement in the AOV (0%), Signifyd reports.

But other verticals didn’t fare so well. 

Ecommerce shopping statistics yield a mixed bag

Sales of health and beauty items rebounded significantly in July from its recent lackluster performance to rise 10% year over year, but consumers still paid more for those face creams – transactions rose 5% while the AOV rose 12%, year over year, Signifyd data shows.  

This ongoing trend of spending less money on more items, or looking for cheaper alternatives or smaller quantities, continues to be indicative of the savvy shopper navigating the ongoing inflationary and uncertain economy. 

Growth of online shopping beyond Amazon

“In an event typically dominated by electronics, we instead saw many shoppers stocking up on everyday essentials like pet food or pantry staples,” Numerator analyst Amanda Schoenbauer said of Prime days in a statement to Digital Commerce 360. “It seems many used the event to save on their standard purchases or held off on buying larger-ticket items until the sale came around.”  

Amazon’s July shopping event also no doubt fueled the shopping enthusiasm that spilled over to retailers not named Amazon, resulting the strong mid-summer sales.

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This was all good news for retailers because honoring that all-important guy seemed to boost sales across most verticals. The leaders in June sales were electronics, up 7%, and sporting goods, up 6%, year over year, Signifyd data shows. Even the beleaguered home goods vertical, in which sales growth from last year has been in negative territory all year, finally broke through and rose 2% in June from last year. Perhaps it was those dad gifts of home improvement tools.

Ecommerce stats: June was better to some verticals than to others

Sales growth in the apparel, accessory and footwear vertical hit a year low in June, but still rose 3% from a year ago. This was helped by increases in fashion (12%) and luggage (40%).  Jewelry sales plummeted in June to -17% from a year ago, and shoe sales, which have been strong this year, declined from last month but still rose 5%, Signifyd data shows.  Who needs shoes in the summer anyway. 

But a closer look at Signifyd’s ecommerce growth statistics shows that, overall, consumers had to pay a lot more for less than a year ago. In June, the average order value (AOV) increase continued to hover in the low single digits, up 3% in June from last year. But coupled with a slight 1% increase in the number of transactions and with product volume taking a dive at -12%, there were fewer products in the shopping cart and fewer dollars in the wallet. 

Apparel finally cools

This trend of paying more for less was exemplified in the apparel vertical, where the June AOV was up 2% from a year ago, but the number of transactions and product volume plummeted 15% and 21%, respectively. In health and beauty, the only vertical in June to decline in sales growth, at -2%, the AOV was up 10% but transactions and product volume were down, 9% and 10%, respectively.  

Interestingly, in a complete reversal, June sales growth of sporting goods showed an entirely different trend, this one of consumers paying less to purchase more items. 

For the second consecutive month, Signifyd online ecommerce statistics show the change in transactions and product volume of sporting goods sales in June far exceeded the change in AOV, perhaps due to savvy shoppers who track sales or buy off-brand or low-ticket items in smaller quantities. In fact, June’s AOV in sporting goods declined by 13% from a year ago, while the number of transactions rose 23% and product volume was up 7%.  That’s a lot of fishing rods.

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It was a point Axios cybersecurity reporter Sam Sabin made at Collision 2023 when she sat down at the Toronto techfest with Signifyd CEO Raj Ramanand and Tailscale CEO Avery Pennarun to talk about bots in the real world.

It’s AI vs. AI in protecting the enterprise

It turns out, of course, that bots can do a lot of good, particularly when it comes to protecting businesses from some of the very stuff of our dreams.

“That’s where AI is starting to get interesting,” Ramanand said from the Collision stage. “It’s not a human versus AI anymore. Companies like ours and others have built AI products for a while. It’s now AI versus AI.

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