Yes the holidays are over, but consumers are still finding reasons to spend online, Signifyd data shows

Consumers continued to increase their spending in January, pushing ecommerce sales for the month up 7% over a year ago while continuing with spending habits that fueled an expectation-shattering holiday season, according to Signifyd’s Ecommerce Pulse data.  

The announcement of the month’s higher online sales comes amid key economic news regarding retail sales overall and the general health of the economy when it comes to inflation. 

Economists and investors were taken aback by the U.S. Labor Department’s report showing an increase in the Consumer Price Index — a sign that inflation might have a tighter grip on the economy than they had thought only last month. 

A clearer picture of the state of the consumer will come Thursday when the U.S. Census Bureau releases its retail sales numbers, which will look at both online and in-store shopping in January. 

And while the economic picture remains muddled — gross domestic product is up, hiring is robust and consumer confidence is rising — one thing remains clear: Consumers are willing to spend online.  

That’s a lot of guacamole

As has been the case in recent months, the grocery category saw one of the biggest increases in spending in January. Sales in the vertical were up 29%, adding to the good-news-bad-news nature of economic reporting this week. It’s possible shoppers were buying a lot more food online — after all Super Bowl Sunday is second only to Thanksgiving when it comes to holiday feasting. But January is a touch early to be stocking up for a mid-February feast and higher food prices undoubtedly contributed to the bigger sales numbers. 

Super Bowl bounce?

While nearly all the key retail categories saw a year-over-year increase in January sales, the Electronics category saw one of the most dramatic upward trends outside of Grocery and Household Goods. Online sales in the vertical were up 7%, perhaps not surprising for the month leading up to the Super Bowl, the United States’ most screen-worthy event. 

A record 123.4 million people tuned in to watch the Kansas City Chiefs beat the San Francisco 49ers in overtime, a growing number of them on tablets, mobile phones and smart TVs, including, apparently, on some devices that were brand new. 

How’s the resolution working out

January’s other obsession — resolutions and self-improvement — no doubt provided fuel for impressive growth in the Leisure and Outdoor category, which saw a 4% rise in online sales. 

Home Goods and Decor started the year off flat, compared to a year ago. Beauty & Cosmetics did slightly better, rising 2% for the month over January 2023. Only Fashion, Apparel & Luggage among key verticals experienced a decline in January. Ecommerce sales in the category were down 2% 

The gift that keeps on giving

Another sign of the season — or January anyway — made itself known in the way online consumers paid for things during the month. The use of gift cards was up 33% in January, calculated by comparing the value of items purchased with gift cards year over year.

The significant increase in gift-card redemption could be a sign that gift-card gift-givers were more generous during the recent holiday season than in 2022. Conversely, it could be that more gift-givers turned to gift cards during holiday 2023 in the face of high inflation. Rather than stretch the budget to give the gift of a $65 wallet that just last year cost $50, a gift-giver might have opted to lock in the cost of being a friend at $50 by purchasing a gift card instead. 

Bad operators never rest 

After a busy holiday season, the misguided among us kept at it in January, searching for ways to take advantage of retailers. Fraud pressure in January was up 13% year over year, based on the value of orders that Signfiyd’s AI-powered fraud protection models deemed risky and likely fraudulent. 

January also saw an increase in consumer abuse — for instance, false claims that a package never arrived or that a product was not satisfactory when it did arrive. Such abuse increased 6% compared to a year ago, based on a comparison of total sales that resulted in such claims. 

Photo credit: Getty Images

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