Holiday Season Shoppers Turn to Discounts and Deals Early

Holiday Season Shoppers Turn to Discounts and Deals Early in the U.S.: Key Insights

• October Sales Growth: U.S. eCommerce sales increased by 3% in the first two weeks of October, driven by a 22% rise in discount usage as consumers seek value ahead of the holiday season.

• Impact of Discounts on Conversion: Small increases in checkout discounts can significantly boost the Add-to-Cart Rate (ATCR), highlighting the importance of discounts in enhancing conversion rates during the shopping journey.

• Market Performance Comparison: While the U.S. experienced a 7.2% decline in September, China's eCommerce sector grew by 26%, with projections indicating China will reach $2.02 trillion in revenue by 2024 compared to the U.S.'s $1.06 trillion.

Based on preliminary seasonal data from commerce protection provider Signifyd, U.S. eCommerce sales in the first two weeks of October saw a 3% increase compared to last year. Such news is necessary, as according to ECDB data the Chinese market has experienced explosive growth compared to the global eCommerce market, while the U.S. faced another decline in September. One of the main reasons the first weeks of October started so well is the large number of consumers already hunting for deals, along with the abundance of offers from various marketplaces and online retailers.

Shopping Days: Discounts Fuel eCommerce

In early October, the use of discounts increased by 22% compared to last year, indicating that shoppers are prioritizing value as the holiday season approaches. So how do discounts make such a difference? It’s all about the conversion funnel.

Every eCommerce business aims to turn visitors into buyers, but the journey is often hindered by drop-offs. The typical online shopping path involves clicking a product, adding it to the cart, checking out, and making a purchase. Yet, according to ECDB statistics, only about 2.3% of website visitors complete a purchase.

Even small changes in the eCommerce process can make a difference. For example, a 10% increase in checkout discounts boosts the Add-to-Cart Rate (ATCR) by about 0.831%. Increasing your discount rate by just 1% raises the ATCR by 0.083%. Higher discounts enhance the ATCR, which can lead to a higher overall conversion rate. In summary, increasing discounts at checkout positively impacts the ATCR and overall conversion rates.

eCommerce Markets: China vs. the U.S.

Discounts or not, September has historically been a poor month for U.S. eCommerce. Our September 2024 data shows a degrowth of 7.2% for the U.S. market, while eCommerce worldwide is growing. China is expected to maintain its position as the leading eCommerce market, projected to reach US$2.02 trillion in revenue by 2024. In contrast, the United States, ranked second, is projected to generate US$1.06 trillion. China's eCommerce sector achieved a growth rate of 26% in September 2024, the highest in the past year. The timing of the shopping seasons in the countries may affect the overall sales periods.

Shopping Seasons Differ

The shopping seasons in the U.S. and China differ significantly in timing, scale, and consumer behavior. In the U.S., the peak shopping period traditionally centers around Thanksgiving and the holiday season, highlighted by events like Black Friday and Cyber Monday, which happen end of November. For example, in 2023, U.S. consumers spent over US$9 billion online on Black Friday alone. In contrast, China’s shopping season culminates in Singles' Day on November 11, which has become the world's largest online shopping event – and it happens earlier.

In 2022, Alibaba reported that Singles' Day generated approximately US$84 billion in sales. While U.S. consumers often focus on discounts during holiday sales, Chinese shoppers are driven by a combination of promotional events and social commerce. Nevertheless, one rule remains: the higher the discount, the higher the ATC.