Buy Now Pay Later surged during holiday spending

According to the most recent Adobe Analytics report, online holiday sales in the United States reached a record-breaking 222.1 billion dollars between November 1st and December 31st, marking a 4.9 percent increase from the same period in 2022.

The surge in e-commerce purchases was significantly aided by the popularity of Buy Now, Pay Later (BNPL) financing plans, which reached an unprecedented 16.6 billion dollars for online transactions during the final two months of 2023, representing a 14 percent increase from the previous year's holiday season. November was the biggest month on record for the payment method (9.2 billion dollars, up 17.5 percent YoY), and Cyber Monday was the biggest day on record (940 million dollars, up 42.5 percent YoY).

Categories including sales of clothing and accessories experienced notable discounts to attract shoppers, with flexible payment plans a popular option as consumers adjust their spending habits. The report iterated consumers showed a strong appetite to shop online, with many are giving themselves greater flexibility with their budgets.

Holiday purchases made through smartphones accounted for 51 percent of total sales, the report said, surpassing desktop and laptop sales for the first time.

"In an uncertain demand environment, retailers leaned on discounting and flexible payment methods to entice shoppers this holiday season,” said Vivek Pandya, lead analyst, Adobe Digital Insights. “The strategy was effective, driving record spend online during big days like Cyber Monday and Black Friday, and a record 11 days that surpassed 4 billion dollars in daily spend this season.”

The prevalence of flexible payment plans contributed to a total of 75 billion dollars in online spending in 2023, a 14 percent increase from 2022, emphasizing the growing significance of alternative payment methods in the evolving landscape of online commerce.