Seema Shah · December 2023
Ongoing Growth in Digital Commerce Buoys Early Holiday Sales
The start of the holiday shopping season saw increased mobile app downloads and MAUs for top retailers, although growth has slowed considerably compared to last year. Consumers are focused on value and deals, indicating that increased traffic and engagement may not translate to overall profit growth. The top categories during Cyber Week were consumer electronics, apparel, and marketplaces/mass merchants. Many retailers increased their US ad spend before the holidays, utilizing keywords related to "Black Friday" and "deals" to attract shoppers.
Key Takeaways:
Sensor Tower data indicates that MAUs for the retail cohort on Black Friday and Cyber Monday rose 12% and 10% YoY, respectively, driven by strength in beauty, home and mass merchants/marketplaces, in line with Adobe Analytics data; per Adobe, Black Friday online sales were up 7% YoY (excluding inflation), while Cyber Monday sales jumped nearly 10% YoY (excluding inflation)
Holiday sales events and shopping continue to start earlier, prompted, in large part, by the pull-forward of promotions and deals into October. Oct’23 downloads and MAU for the retail cohort rose 42% and 26% YoY, respectively, while Nov’23 downloads and MAUs grew <1% and 20% YoY, respectively
However, download and MAU strength are not necessarily indicative of revenue or margin growth, given the likely discounts provided to drive conversion; the focus on value was corroborated by Sensor Tower’s new and proprietary shopping conversion data that indicates that Target outperformed Walmart and Amazon in conversion percentage, up 89% on Black Friday compared to its 60 day average
Beauty, a consistently top performing category, continues to drive both downloads and MAUs, led by Sephora and Ulta; conversion data also supports this trend with Bath & Body Works seeing conversion events soar 4.8x over the holiday weekend
Retailers struggled to maintain consumers’ interest, given the flood of promotions and deals hitting shoppers’ inboxes. This had a negative impact on engagement on retailers’ apps, with time spent for the cohort falling 1.6% YoY to 25 minutes/wk in QTD 4Q23. On a positive note, session counts rose slightly, up 1% YoY to 14 sessions/wk
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