Sunday , March 3, 2024

Despite Headwinds, E-Commerce Remained a Juggernaut Throughout the ‘22 Holiday Season

E-commerce transactions for the 2022 holiday-shopping season bested predictions for growth, despite signs of a weakening economy, according to research from ACI Worldwide Inc. From October through December, online transactions increased 21% from the same period in 2021, besting pre-holiday shopping- growth estimates by six percentage points, says ACI.

In addition to strong e-commerce volume, gaming and travel both saw significant upticks in transactions, increasing 153% and 57%, respectively, from October to December compared to the same period in 2021.

With consumers looking to save money on shipping costs and avoid lengthy delivery windows, many online shoppers used  buy online pick-up in-store (BOPIS) options. BOPIS transactions increased 18% during the holiday season, while the average ticket value increase $26 for the period.

When it comes to payment methods, credit and debit cards remained the top payment choices. Credit and debit card transactions experienced an 8% increase, with the average ticket increasing by $49.

Buy now, pay later loans also remained popular with consumers, especially on Black Friday. BNPL volume for that popular shopping day increased 87% compared to a year earlier, and the average ticket for BNPL purchases increased $57.

“Consumers upped their spending this holiday season despite increasing economic pressures,” Basant Singh, head of merchant segment at ACI Worldwide, says in a prepared statement. “While inflation accounted for much of the year-over-year rise in holiday spending, our data shows a steady uptick in transactions, with many consumers buying goods and services via mobile devices, and in many cases using digital wallets as a preferred payment method. We expect to see these trends continue in 2023.”

The report indicates consumers actively used their smart phones to make purchases during the Thanksgiving weekend. Mobile devices drove a 17% increase in transaction volume during that period, with 36% of all transactions initiated using a mobile device on Black Friday. Cyber Monday played an equally significant role in the uptick in mobile usage, with transactions initiated through mobile devices increasing 43%, compared to a year earlier.

Digital-wallet transaction volume specifically saw a substantial increase, jumping 32%, during the 2022 holiday season, compared to 2021.

“Use of digital wallets during the last holiday season signals a broader trend that we expect to play out in the year ahead,” says Singh, in the statement. “Consumers, especially younger shoppers, are embracing digital wallets as a mainstream payment method. More than half of consumers (52.7%) used a digital wallet in 2021, according to our data. This represents a 33% increase over the last five years.”

Meanwhile, fraud attempts decreased by 0.5% during the season, while mobile fraud attempts declined 0.6%, and e-wallet fraud attempts declined by 0.8%.

One reason for the decrease, according to ACI, is that merchants are investing in better fraud-management and prevention capabilities, as many now look at fraud prevention as a revenue generator. Such security measures as biometric authentication and encryption by wallet providers were a key driver behind the decline in e-wallet fraud attempts, ACI says.

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