Holiday Shopping: Tis' the Season to Shop Online

Today marks “Green Monday”, Cyber Monday’s lesser-known cousin describing the second Monday of December. Originally coined by eBay in 2007 to commemorate what it found to be one of the busiest shopping days of the year due to frantic last-minute gift shopping activity, many retailers still meet the occasion by offering deals and discounts to shoppers trying to meet the Christmas shipping deadline.

As the following chart shows, the holiday season really is the season to shop online. While it’s a long-established fact that retail sales move with the seasons, typically spiking in the holiday quarter, e-commerce sales follow the same pattern to an even larger extent. According to data from the U.S. Census Bureau, the share of e-commerce sales in total retail sales is significantly higher in the fourth quarter of each year than it is for the remaining nine months. In Q4 2022, for example, e-commerce sales accounted for 16.3 percent of retail sales in the U.S., compared to 14.4, 13.7 and 14.1 percent in Q1, Q2 and Q3 of the same year.

Our chart also illustrates the growing importance of e-commerce overall, with the share of e-commerce sales in total retail sales growing from less than 5 percent in 2010 to roughly 15 percent last year. The Covid-19 pandemic has accelerated this shift as online sales uncharacteristically spiked in Q2 2020 and remained elevated ever since. Interestingly the holiday season spike in online shopping’s share of total spending is less pronounced now than it was in pre-pandemic times. In 2021 and 2022 the fourth quarter e-commerce share was 14 and 16 percent above the Q1-Q3 average, respectively. Prior to the pandemic, the difference was typically 25 to 30 percent, indicating that e-commerce now plays a larger role throughout the year.